Kids’ brews yield monster markups

The market for kids’ let’s-pretend beer is large and lucrative.

You can’t argue with point-of-sale data showing craft beer to be the fastest-growing beverage category in foodservice. But faux “artisan” beers targeted at kids may hold as much or more revenue potential for many operators—especially when you consider the margins they command.

Numbers from Leesburg, VA-based hospitality data firm GuestMetrics show that craft beer grew at a double-digit rate in 2012, while all other beer categories declined.

That’s a lot, but it’s nonalcoholic beer lookalikes aimed squarely at the kids’ market are where eye-popping growth is taking place.

Consider the success Universal Orlando has had with Butterbeer. First introduced in June of 2010, it’s available only within the confines of the Wizarding World of Harry Potter, located at the theme park’s Island of Adventure. Universal has already increased the number of outlets that sell this drink from one to four because it has proven popular with park visitors.

How popular? Early last December Universal held a celebration to mark the sale of its five millionth portion of Butterbeer. At $12 apiece and served in a Harry Potter-themed souvenir mug, the beverage has become a moneymaking machine. That’s $60 million in sales from one drink sold in one place over a two-and-one-half year period.

The Butterbeer recipe is a closely held secret. Universal describes the drink’s flavor as reminiscent of shortbread and butterscotch. Online recipe sites guess that Butterbeer is cream soda topped with a whipped dairy base that’s flavored with a splash of butterscotch syrup. It’s a very sweet drink, but it looks much a like well-poured craft beer. It’s served either cold or frozen at Universal.

Butterbeer is an easy drink to reproduce, but it’s not necessary to faithfully replicate the flavor to make money from it. The big attraction of Butterbeer—aside from its Harry Potter connection—is its appearance. Which may be why the foodservice brain trust at Disney World in Orlando put a differently flavored nonalcoholic beer lookalike on the menu of the just-opened Gaston’s Tavern in the new Fantasyland part of its park. The Disney concoction is called LeFou’s Brew. It costs $9.99 when served in a souvenir stein or goblet, $4.49 in a regular cup.

LeFou’s Brew consists of frozen apple juice flavored with a hint of toasted marshmallow. It’s topped with a passion fruit-mango foam that gives the finished product the appearance of a grown-up beer. The beverage is available only at Gaston’s Tavern, a quick-serve concept themed to a character from Disney’s Beauty and the Beast; LeFou was Gaston’s wingman.

One takeaway for operators who cater to families at non-theme-park operations is that the market for nonalcoholic kids’ “beer” is much larger than anyone would have guessed. Also, the price points these beverages command—very high in a tourist setting—should still be operator-friendly in a regular restaurant or bar.

In particular, kid-friendly fake beers would seem to be a natural for microbrewery restaurants and brewpubs. Data from NPD Group supplied by Kraft Foods Group shows that having family-friendly food and drink options matters more than you might think in this segment.

NPD found that parties with kids now account for more than one-third of the patron base for operators in the microbrewery restaurant/brewpub segment. Also, when these establishments offer kid-friendly menus, per-party checks can increase up to 22 percent higher than average, according to NPD’s data.

These operations are a natural for nonalcoholic “craft beers” that look just like what the adults are drinking. But any restaurant that caters to families should think about getting in on this trend. Just Google “Butterbeer” to get an idea of how you can get started.