What Will Be the Spirits Giant Diageo's Next Move?

Earlier this month, Diageo, the world's largest distiller sold off 19 of its lower-end spirits for $550 million to focus on its premium lines.

The company has managed to reverse revenue declines over the past five years and according to Diageo, the company is on track to have a 5 percent sales increase in 2018.

With an expansive portfolio of spirit brands including Smirnoff, Baileys, Guinness, Johnnie Walker, Cîroc, and Tanqueray– what does the future hold for the spirits mogul?

There could be some challenges considering the "Brexit negotiations, currency volatility, trade disruption brought about by the actions of the Trump administration, and other countries' retaliatory measures," according to "Just Drinks."

But the company has consistently made smart moves to remain slim and trim like it's recent move to sell off the underperforming spirit brands. In 2015, the company sold most of its wine assets.

Diageo is also one of the many beverage companies looking to get into the cannabis market in Canada.

According to a recent report by "Bloomberg," Diageo was allegedly in talks with at least three cannabis producers based in Canada.

The spirits producer also has been focusing on nurturing new brands by funding Distill Ventures, which is an incubator for spirit start-ups.

"In early-2018, Diageo bought Berlin vermouth maker Belsazar - its first acquisition from Distill Ventures. The move is a sign that the company will look to use Distill Ventures to facilitate its entry into key growth areas such as, in this case, the aperitif occasion in Europe," writes "Just Drinks."

Not to mention, Diageo will be investing significantly in new product development. The company is building a new tech hub in Scotland to research and create new innovations within its spirits portfolio.

Read more about the future of Diageo at "Just Drinks."

We recently covered how Diageo was selling off 19 of its brands to focus more on the trending craft spirits market. Watch the recent episode of The Barron Report where host Paul Barron analyzes the company's latest move.

Ryan Reynolds-Backed Aviation Gin Will Now Be Available on Virgin Atlantic Flights

The British airline Virgin Atlantic will now be serving Aviation American Gin in its clubhouses and onboard its flights.

The gin has caught the attention of actor, comedian and film producer Ryan Reynolds, who invested in the company for an undisclosed stake in February.

In a comical video, Reynolds teams up with Sir Richard Branson to announce that the gin will now be available on Virgin flights.

In the ad, Reynolds jokingly says that the two companies will merge and be called "Aviavirgination." Branson corrects him by saying, "actually, Ryan, this is more of a partnership announcement."

Since purchasing ownership interest, Reynolds has emerged as the face of the brand.

"I've tried every gin on the planet and Aviation is, hands down, the best. Also, I don't recommend trying every gin on the planet. Stick with this one, said Ryan Reynolds, Owner, Aviation American Gin, according to the company's website.

Andrew Chrisomalis, CEO of Aviation Gin’s parent company Davos Brands said that Reynolds will be involved in the “entire creative process for Aviation, including Aviation’s marketing and strategy."

Davos Brands also owns Astral Tequila, Sombra Mezcal, and Tyku Sake.

Apparently, the marketing initiatives involving Reynolds have paid off.

According to Foodable Labs data, Aviation Gin tops the category this summer as the most loved Gin in America, with a 93.4 score in overall sentiment.

Reynolds is one of the many celebrities to team up with alcohol brands. George Clooney's tequila business was sold to Diageo last year for $700 million. Jon Bon Jovi co-owns the winery Hampton Water.

Read more about Aviation Gin at "CNBC."

Speaking of gin, want some cocktail recipes featuring this spirit? Check out the video below to see Foodable’s resident master mixologist, Oscar Castaneda, demonstrates a few craft cocktail recipes featuring American-made spirits!

Artisan Wine And Beverage Trends

Artisan Wine And Beverage Trends

Your beverage program can make or break your business. A well-run program can grow profits, as well as subsidize other initiatives within your operation that may be more costly. And yet, many bar programs are still underdeveloped. What does it take to elevate your program to the next level? Foodable gathered top beverage minds to discuss what makes a bar program great.

Success in this business comes down to the value you provide for your customers. Defined by the quality you provide for the price you charge, there are many ways to provide and build upon value.

The first thing Dan Pilkey of Paul Hobbs Winery reminds operators is that a beverage program can’t be contained in a rigid box. The lines between beverage and culinary can, and should, blur. At the very base, you need to provide the basics your customers can fall back on, but you should really strive to go beyond that.

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How To Better Profit From Crafted Cocktails

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Crafted cocktails are not a new invention, but from the days of the good old “Harvey Wallbanger” to today’s gastronomy driven “Old Fashioned,” they have evolved to complex, costly, and labor-intensive items.

“What is a crafted cocktail?,” you may ask. First off, nothing pre-made out of the bottle mixes—Fresh, fresh, oh did we mention you need freshness in your drink? That would consist of using real fruit juice made to order or prepared the day of. Please keep lime-in-the-bottle out of the bar and remember to use fine liqueurs with no artificial flavors and opt for natural flavored syrups. Fine spirits stay away from the well brands. You just can’t make it work, this is not the way to save or cut costs on the main showpiece.

So, many barmen and women think they should just stay behind the bar, but this is wrong. Today’s crafted cocktails are full of exciting ingredients from spices to fresh herbs, and use co-kitchen ingredients like pork fat, tomatoes, and fruit and vegetable scraps.

Here are some tips to keep it crafty and profitable:

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  1. Pick fine spirits for your cocktail. A little goes a long way here. A one ounce fine whisky pour in a cocktail will standout versus a two ounce well whisky. People ordering crafted cocktails are becoming more knowledgeable and will seek a small batch liquor when selecting. Yes, a fine liquor will cost more than a well brand, but lower pours will aid your costs.

  2. Batch make some of the more labor intensive items like fresh juices, and syrups during prep. They should be stored in glass not plastic. This will save labor and timing and you can control your usage throughout the day. You can also calculate your yields from your raw ingredients.

  3. Know your COSTS! Use measuring tools like jiggers to calculate costs. Set a cost goal that you are comfortable with and gives the customer value. Many times, owners are surprised to find out their cocktail list is costing them 40 percent just in products.  Know before you pour.

Formula:

Total cost of ingredients divided by the sale price equals the cocktail cost percentage per menu item. 

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  1. Keep all cocktail production under three minutes each. This has been one of the biggest speed bumps for many bar programs. Time is money, and customers don’t want to wait until their meter is out. How to make a crafted cocktail within a reasonable time? Train bar staff and know what items can be prepped beforehand and still be fresh within the given shift. You can pick off mint leaves and precut some garnishment. People still want to see the whole process, but if the bartender is making cocktails for a table away from the bar, this will not matter, as the taste and level of freshness will be the same; so saving the show for the bar top is not short changing anyone.

  2. The kitchen has a wealth of free ingredients you can use to make syrups and garnishments from just scraps. Ask the chef what he is throwing out—peels, herb, stems and more. Michelin star restaurant, Providence, in Hollywood uses many kitchen scraps in their cocktail program daily, and bar manager Kim Stodel had no previous cooking knowledge but has learned from on-staff chefs how to best utilize ingredients. It would also be great to include your chefs on your cocktail creations, as they will give you insight on which free kitchen scraps you may be able to exploit.

  3. Ask your supplier what crafted spirit specials they have. Many times you can work out a deal for case discounts and/or refunds if you just place the liquor brand name on your cocktail list. We have more small batch spirit companies than ever, and they are thirsty for business and willing to give a break in cost for a spot on your list and sales. ASK ASK and ASK and you will find a fitting brand willing to invest in lowering spirit costs. Spirit companies are willing to do joint promotions, which will also aid you in costs. Ask for package deals being offered with other items, like ginger beer. Also remember that many times your sales rep will be forgetful in offering, so you have to keep asking every week.

  4. Changing up the menu and keeping it seasonal will also keep costs down, as many of the fresh items, such as citrus and herbs, will rise in costs as they fade out of season. Use the seasons as your guide for refreshing your cocktail menu; it’s a great way to keep your cocktail menu from going stale.

When creating crafted cocktails, the end goal is to make a refreshing beverage that will leave a lasting memory on your guest.  So many bar programs end up with a list of ingredients longer than a French cookbook; don’t get caught up in making it complicated, and just keep the glass full of value and quality.
 

Foodable.io Session Film: Raising the Bar in Spirits Strategy

Foodable.io is the latest foodservice event made by industry leaders for industry leaders. Executives, master chefs, restaurateurs, mixologists, and filmmakers gather for a day of Food Theory: collaboration, education, and entertainment. Attendees participated in interactive panel sessions, where custom films preceded an expert-panel Q&A. Missed out? Never fear! Enjoy this featured panel film below and get ready for Foodable.io 2017.

More than drinks, today's mixologists are shaking and stirring things up in the industry and raising the bar when it comes to reinventing cocktails. What are the latest ideas giving consumers a refreshing perspective on their favorite sips? The bar is one of the most profitable centers of a restaurant, and if done right, leaves a culinary experience like none other. Done wrong, it is the potential contributor to a failed operation.

According to Foodable Labs, the Top 100 Spirit Brands have an average sentiment rating of 82.9 out of 100, compared to the Top 100 Craft Beer Brands with an average sentiment of 71.2, followed by the Top 100 Wine Brands with an average sentiment rating of 68.4. Needless to say, consumers like their spirits.

Of the demographic leading spirits consumption, the Millennial generation leads the pack. What does this mean for promising bar and spirits operators? The bar business must continue to innovate to attract this highly creative, nonconforming group.

"[We're] Always kind of thinking about how you eat and how you drink as more than just eating and drinking, so we like to add other elements. We like to add touch or sound or sight. Things that are just beyond the experience of drinking a cocktail. Looking at ingredients like you would at a traditional bar or restaurant, but always looking for new ways to present things. ...It's more of an experience, more of a theater, if you will," Micah Melton, beverage director at The Aviary, said. 

Demand is pushing the limit. Soon, innovators in the bar scene will make beverages as enticing and alluring as the dishes prepared by master chefs. While consumers may have their habitual drinks, the new-age consumer is more open to exploring unconventional creations, such as an alcoholic cocktail that also consists of chopstick-needed noodles. The bar of the future may very well be the cornerstone of tomorrow's foodservice establishments.