Why Premium House Spirits Elevate the Bar: A Case for Quality over Cost

what's on your bar

Many bars and restaurants default to inexpensive, low-quality spirits for their well or house offerings. This strategy, often driven by cost-cutting motives, prioritizes short-term savings over long-term benefits. However, research shows that using premium spirits for house pours can significantly improve a venue’s reputation, profitability, and customer loyalty. In this article, we’ll examine how offering higher-quality vodka and gin as house spirits can yield better returns than relying on low-quality alternatives.

1. Customer Perception and Brand Differentiation

A key factor in bar and restaurant profitability lies in customer perception. When patrons experience better-tasting drinks, they are more likely to associate that quality with the establishment, leading to repeat business. A study by the International Journal of Hospitality Management found that the quality of ingredients in cocktails directly influences customer satisfaction. Higher-quality spirits provide a smoother finish and richer flavor, which are easily detectable, even when mixed with other ingredients. Patrons who recognize a commitment to quality in well or house spirits are more likely to order again and recommend the venue to others.

Moreover, by offering premium house spirits, a bar or restaurant can differentiate itself from competitors who use cheaper, low-quality options. This brand positioning can attract a clientele that values quality, establishing the venue as a premium destination rather than a generic choice. Since word of mouth remains a powerful marketing tool, creating an exceptional experience with well-crafted cocktails enhances a venue’s overall reputation.

2. Increased Profit Margins on Premium Cocktails

While it might seem counterintuitive, higher-quality well spirits can increase profitability. A 2021 report by the Distilled Spirits Council found that consumers are willing to pay more for cocktails featuring premium or super-premium spirits. By charging slightly more for house cocktails with quality ingredients, establishments can increase margins without needing to source and maintain a vast inventory of luxury spirits. Upselling house cocktails with quality ingredients thus becomes easier, especially for customers who are already inclined to pay a little extra for a superior experience.

Additionally, the incremental cost of using a premium spirit for a house pour is often offset by higher sales and customer satisfaction. The price difference between a low-quality and a higher-quality vodka or gin may be minimal in the grand scheme of the cocktail’s overall price, especially when averaged over hundreds of servings. However, the perception of quality and the enhanced drinking experience can lead to a noticeable increase in sales volume, effectively covering the slight increase in cost.

3. Reducing Waste with Premium Spirits

Cheap spirits often lead to waste due to customer dissatisfaction. Customers may choose to discard or return drinks made with low-quality ingredients, resulting in increased costs and inefficiencies. By contrast, premium house spirits lead to fewer complaints and increased enjoyment, reducing wastage and the need for replacements.

For instance, a bar study conducted in New York found that establishments using premium house spirits saw a 15% reduction in drink returns. This drop in waste can offset the initial costs of higher-quality spirits, contributing to both environmental sustainability and cost savings. It’s also worth noting that using premium house spirits minimizes the need for heavy mixers to mask harsh flavors, leading to a more straightforward cocktail-making process with fewer ingredients and potential waste.

4. Enhancing Staff Confidence and Engagement

Bar staff are often more enthusiastic and engaged when working with high-quality ingredients. Training programs often stress the importance of product knowledge and quality ingredients, making it essential to provide staff with products they can proudly stand behind. A survey of bartenders by the American Bartenders’ Guild revealed that 78% of respondents feel more confident selling premium house spirits, believing that the overall customer experience improves as a result.

When bartenders take pride in the quality of house spirits, they are more likely to promote them, making upselling easier and more natural. This positive dynamic between staff and product fosters a sense of loyalty among patrons and enhances their overall experience, creating an environment where staff feels supported and customers feel valued.

5. Elevating the Brand Experience with Authenticity

Today’s consumers, especially younger demographics, are drawn to authentic and transparent brands. Using premium, often locally sourced or organic ingredients for house spirits aligns with consumer demand for authenticity. According to a Nielsen report, over 60% of consumers in the 21-34 age bracket prefer products that align with their values, such as sustainability and quality. For instance, offering a premium organic sugarcane vodka like Felene can position a bar or restaurant as a thoughtful, quality-driven establishment.

This sense of transparency can foster an emotional connection with patrons, making them feel part of a conscientious, upscale experience. As a result, they are more likely to become repeat customers, fostering loyalty and increasing revenue. Establishing a brand identity rooted in quality enhances the venue’s image and makes it more attractive to discerning patrons who seek value beyond price.

6. Positive Online Reviews and Social Media Appeal

Today’s patrons often share their experiences on social media and review platforms, where mentions of quality are highly influential. Studies by the Online Review Association reveal that positive reviews citing quality ingredients significantly improve a venue’s online reputation. Patrons who discover that a bar’s well drinks are made with high-quality spirits are more inclined to leave positive feedback, which can improve ratings and attract new customers.

On platforms like Instagram and Yelp, where visual and experiential content is shared widely, the appeal of cocktails made with premium ingredients adds social value to a bar or restaurant. High-quality cocktails not only look more visually appealing but also contribute to a positive perception that can attract new business through organic social sharing and favorable reviews.

The Takeaway: A Strategic Investment in Quality

Using premium spirits for well or house offerings should be seen as an investment rather than an expense. While the immediate cost of quality ingredients is higher, the long-term benefits outweigh the initial outlay. Patrons appreciate and respond to a dedication to quality, leading to increased customer satisfaction, loyalty, and brand differentiation.

For bars and restaurants seeking to elevate their brand, premium house spirits provide a clear path to both improved customer experience and profitability. By prioritizing quality in house pours, establishments can create a memorable experience that resonates with today’s quality-conscious patrons, ultimately driving growth and enhancing the venue’s reputation in an increasingly competitive market.

Kim Laderer

Kim Laderer-Veiga is the President of Felene Inc. Kim's unique and close-up knowledge of the on and off-premise alcohol business has given her a look into the trends and staples of the liquor industry. In the Kim Factor blog, Kim shares her expertise, her discoveries and her observations of the spirits business.

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