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InterContinental Hotels Seeking Beverage Growth Through Innovation

June 29, 2011

InterContinental Hotels Group is one of the world’s largest hospitality groups, with a presence in 100 countries. In the Americas, InterContinental operates 100 full service hotels, with brands including Crowne Plaza, Holiday Inn, and Hotel Indigo, as well as InterContinental Hotels & Resorts. In its most recent quarterly results ending March 31, 2011, the company’s U.S. revenues were up 8.4%, the highest U.S. growth since the second quarter of 2006. This year is estimated to be slightly better than 2010. SND recently interviewed InterContinental’s vice president, food & beverage, Americas, Jean-Pierre Etcheberrigaray.

SND: How are you maximizing opportunities for spirits at InterContinental?

Etcheberrigaray: At all our hotel concepts, we’ve brought in world-class mixologists to create new cocktail menus. And at many of our bars, we’ve centered on a specific spirit. Bar 888 at the InterContinental San Francisco is the nation’s premier grappa bar, with a menu featuring grappa cocktails developed by mixologist Francesco LaFranconi. Those grappa-based drinks dominate our specialty cocktail sales there, and total grappa selections number more than 200. While grappa and grappa cocktails comprise only about 10% of our spirits sales, Bar 888 has created buzz. We also have other specialized spirits bars around the country, including the XO Bar (in Atlanta) for Cognac, RumBa (in Boston) for rum, and Sushi-Teq (also in Boston), for Tequila.

SND: Overall, what are the biggest new F&B trends at your hotels?

Etcheberrigaray: Number-one is a growing tendency for hotel guests—and locals—to eat in the bar. Improving the bar menu brings in increased beverage sales. I’m not downplaying the importance of our restaurants, especially for wine sales. Restaurants aren’t our biggest source of beverage sales, but they’re the primary source of full-bottle wine sales, and so their beverage role is critical. We’re seeing strong growth in non-mainstream varietals like Shiraz, Malbec and Tempranillo. That and the ongoing growth in cocktails and craft beers is an extension of a trend we’ve seen in food—the quest for more intensity of flavor.

SND: How do you structure your wine program, and what do you offer as a house wine at your hotels?

Etcheberrigaray: Most of our hotels feature Stone Cellars Culinary Collection, which is exclusive to the on-premise and has done very well for us. Our more upscale venues also have Champagne and domestic sparkling house wines. InterContinental’s core list has about 50 wines, but selection depends on the hotel brand. Luce Wine Restaurant at the InterContinental San Francisco, for example, offers well over 200 selections. For our by-the-glass range, prices range from $8-$16. Pricing is always market-specific, and there is quite a range between markets. We continue to pour a six-ounce wine by-the-glass portion, and to pour from the bottle in front of the guest.

SND: How important are the profits generated by beverage alcohol to your bottom line?

Etcheberrigaray: I look at what I call the Beverage Penetration Index—beverage sales per each dollar of food sold. The company average is about 30 cents. We recently evaluated our selections and made quite a few changes to ensure that we had a sufficient number of high-value products. We’re working harder and smarter to manage costs. We’re monitoring distributor pricing more carefully than ever and encouraging hotels to take a strategic approach to deal opportunities.

SND: Are there any ways in which beverage alcohol wholesalers and suppliers can better serve your needs?

Etcheberrigaray: The products they want to sell aren’t always the products we need. The most effective suppliers study us and try to find ways to improve our offerings. The very best wholesalers teach us something that we didn’t already know.

 

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