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Beer stages comeback amid hard times

By   /   Sunday, April 5th, 2009  /   Comments Off on Beer stages comeback amid hard times

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People drink when they’re happy, and people drink when they’re sad.

In today’s economy, plenty of people are still drinking — they’re just buying the cheaper stuff, and they’re going out for drinks slightly less often. Restaurants, bars, clubs, pubs and beverage distributors across the region say booze is flowing pretty freely in the Tri-Counties but they are not sure whether the glass will be half full or half empty as the recession proceeds.

“In reality now, people are buying beer. Beer is holding up pretty well in this economy,” said Jeff Jordano, president of Pacific Beverage, which distributes Anheuser-Busch products and wine to restaurants and grocers throughout the Tri-Counties. “We’re actually up on beer this year. Within beer, people are trading down from imports to domestic and domestic to value brands.”

To make up for lost sales, some bars, like the Santa Barbara Brewing Co., have extended the length of their happy hours. Others are pumping up their food menus while deflating the prices.

“We have a new slider menu where we have items from a dollar to $3,” said Janelle Henderson, co-owner of the Paradise Grill & Sports Bar in Ventura. “Since times have gotten a little bit skimpier, we added a whole menu of them.”

She said the sliders have been selling very well as patrons look to save a few bucks when eating and drinking out.

The Sandbar, a Mexican-style bar and restaurant in downtown Santa Barbara, has even begun offering $1 drinks, such as mimosas and sangria, before noon on the weekends.

“I don’t know how much that has to do with the recession — it’s just we do so many other things that our breakfasts hadn’t picked up yet so we wanted to make a bolder statement,” said Managing Partner Aron Ashland.

Ashland said overall, the Sandbar has done pretty well despite the recession. By diversifying in food, he said his business isn’t solely dependent on beverage sales. And because it’s not a high-end restaurant, people looking to cut back may throw down some cash for a good deal.

“We don’t try and gouge people,” he said. “I think sometimes in a recession, people are going to drink anyways, but they might drink somewhere that’s a little more affordable.”

Diversity has also helped The Graduate, a nightclub in San Luis Obispo that is a popular hangout for not just college students but also high school students during its 18-and-over nights, known as “Minor Madness.” By charging a cover fee, the club can still bring in a steady stream of cash without selling a drop of alcohol.

“So we’re not really dependent as much on drinking whereas the bars downtown, that’s all they do,” General Manager Bob Kuntz said.

Kuntz said in recent months, he’s seen a significant dropoff in the number of students from California Polytechnic State University, San Luis Obispo, hitting up his bar. “That’s where we’re noticing it most,” he said. “They’re more dependent on their parents, and their parents are taking a hit.”

As a result, sales are down between 15 and 25 percent this year and the club has been forced to reduce the hours of many of its employees to save costs.

But have those college students given up drinking altogether just because of the recession? That’s unlikely, said Jordano, because sales of alcohol at grocery stores have swung up.

“We’re benefiting from people going to the grocery store and buying something to drink,” Jordano said. Regardless of which supermarket you go to, there’s always some variety of alcohol on sale — and always at a fraction of what a customer would pay at a bar or restaurant.

Nonetheless, sales of high-end alcohols seem to be on the decline lately while happy-hour sales hold steady.

“We have a lot of really nice tequilas that I don’t see moving as quickly as they were this time last year,” Ashland said of the Sandbar. “I’ll tell you the one thing we notice is less tips.”

He said instead of tipping on average $2 for a regularly priced drink, customers are increasingly just forking over a dollar. And instead of working its way up to management, the buck stops at the bartender.

“The bartenders are eating it a little bit,” Ashland said.

Not everyone agreed that tips are down. At Old Kings Road — a British pub on the same block as the Sandbar — manager Zelie Burchall said its reliance on dedicated locals and curious tourists has made it mostly resilient to the downturn. As a result, tips are about what they’ve always been.

Regardless of how business is today, many of those in the beverage industry are cautious about how business will be in the next year or two. However, most remain somewhat optimistic.

“There are always those concerns, but I think people drink just as much if not more during the recession,” said Cayton Erhard, a bartender and manager at the Santa Barbara Brewing Co. “They may even want to drink more to get through it.”

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