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[20 comments]

White Castle Considering Alcohol Sales

December 27, 2011

White Castle, known for its square "slider" burgers, is testing the sale of beer and wine. The 90-year-old chain is already selling glasses of wine for $4.50 and beer for $3 at a location in Lafayette, IN.

The Lafayette location is a dual-concept restaurant that houses a White Castle and a Blaze Modern BBQ, one of three new concepts being tested by the company. The burger joint is also testing an Asian food concept, Laughing Noodle, in Springfield, IL and Deckers, selling grilled sandwiches, in Lebanon, TN.

"This was something that customers had been suggesting," Jamie Richardson, a spokesman for White Castle System Inc. told the Chicago Tribune. "They thought that beer and wine might go nicely with the barbecue that was available at Blaze. We're certain that we might have some customers who might enjoy some sliders and a beer or wine as well."

Other fast food restaurants also are dabbling with alcohol. Earlier this year, Burger King opened its first Whopper Bar concept in South Beach selling beer and now has six across the country. Sonic began serving beer and wine this summer in two of its Florida locations. Chipotle Mexican Grill, one of the first large scale fast food restaurants in the U.S. to obtain a liquor licenses for a majority of its locations, is said to benefit not only from sales but from longer visits.

In Europe, alcohol sales in fast food chains are common. The first McDonald's to open in Munich in 1971 was the first worldwide to sell beer.

Sales at fast food chains have been flat over the last few years, partly due to heightened competition from sit-down restaurants like Applebee's and Chili's, as well as from coffee houses such as Starbucks, which now sells craft beers in its Northwest locations.

"Fast-casual restaurants have done well during these times as fast-food restaurants have struggled," Bonnie Riggs, an analyst with NPD Group, told the Columbus Dispatch. "So you're seeing fast-food companies trying to compete by raising the bar to meet a wider variety of needs."

One challenge for fast food chains is that much of their workforce is under 21. Given its in-and-out nature, some also see a higher chance of drunk driving. Christopher Muller, dean at Boston University's School of Hospitality Administration, told USA Today earlier this year, "You don't want someone downing a quick beer, then getting into their cars and driving off. It's a delicate balance of risk and reward."

Discussion Questions:

Discussion questions: What do you think of alcohol sales at White Castle and other fast food chains? Is beer and/or wine an option they should provide customers to remain competitive? Are there higher risks with alcohol sales at fast food chains versus other food establishments?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Are the risks of selling alcohol at fast food chains higher than at other food establishments?

Comments:

I believe that in the stand-alone sites, not adjacent to the BBQ, the risks associated with serving alcohol outweigh the advantages. And then there's the image of White Castle as a destination for kids on their own.

Do I offer this next factoid proudly? As a teenager my husband won a bet by downing 50 White Castle hamburgers in less than 1/2 hour. He also got the nick name of "Piggy." Can't say it was cute or healthy, but adding alcohol opportunities to the mix is scary.

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Joan Treistman, President, The Treistman Group LLC

Here in Texas we have several fast feeders who offer beer, wine, and margaritas with their fare. It's certainly a profitable add-on but also a bit risky on the liability end. As the article points out, there's a delicate balance that must be struck for it to be worth the headaches.

As for White Castle adding alcohol to their menu; why not? A nice bordeaux to wash down that four pack of sliders beats a Diet Coke any day!

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Marge Laney, President, Alert Technologies, Inc.

White Castle has pointed out that the beer and wine menu items were to meet the interest of Blaze Modern BBQ clientele. Meeting the needs of select locations, or co-branded restaurant sites could offer upside to QSR feeders, but this is a limited interest and opportunity.

Not likely that we'll see operators -- either company stores or franchisees -- rushing to add alcoholic beverages. Their more youthful crews, the way that the franchisor is structuring buildings, equipment packages, store volumes by daypart, etc., don't lend themselves to mixing liquor and a QSR feed.

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Roger Saunders, Managing Director, Prosper Business Development

I remember being stationed in Munich in 1971 and how thrilled we were to go to a McDonald's and once there found out were could order a beer with our burgers. The sale of alcoholic beverages has some different pluses as pointed out in the article. The negatives include the potential impact on brand image as a family place -- a place to take your young children, on the family perception of a cost of a meal ($4.50 for a glass of wine could almost be the average ticket), etc.

Alcoholic beverage sales also bring a lot of control issues. Certainly most laws will prohibit their sale at the drive through, which means more people will come inside to eat. Not sure if that's ultimately a good thing or not.

In a youth oriented restaurant, the issue of a person who is 21 ordering a beer(s) and then taking them to a remote table and sharing with their underage friends might not mean just losing your license to sell beer but being closed down. It also brings drinking and driving liability issues into play. I would suggest QSRs approach the sale of alcoholic beverages in their locations very carefully.

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Steve Montgomery, President, b2b Solutions, LLC

It was only a matter of time until a "slider" would be accompanied by a "shooter" somewhere. With the higher margin in liquor than in burgers, this is the likely extension in the current fast food paradigm. The risks of disturbance will likely rise when burgers and booze mate ... and thus is such a marriage's fate.

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Gene Hoffman, President/CEO, Corporate Strategies International

White Castle already has a unique image and reputation but adding beer and wine with the belly bombers will create almost a completely new business image, for better or worse.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

The first question is, is it contrary to the overall image of the chain? Next, can it be executed operationally? If there are no problems with these questions, why not?

Am I kidding myself that a beer is healthier than a Diet Coke?

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Gene Detroyer, Professor, Independent

Risks will be higher at the stand alone fast food operations because of the staff working at the locations.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

This just increases the chances of more drinking and driving, plain and simple. I don't welcome it at all, but I'm not sure it can be stopped.

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

Go to any airport first thing in the morning and you're sure to see barflies downing beers and Bloody Mary's while watching CNN. I'm not sure that I'm excited about replicating that vibe in the White Castle that kids frequent after class....

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Cathy Hotka, Principal, Cathy Hotka & Associates

They are obviously confused about their brand promise.

White Castle is where you go AFTER you've been drinking.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Funny pun in the article -- raising the bar to meet a wider variety of needs -- aren't needs being met elsewhere? Who assumes that White Castle burgers aren't being consumed with beer to begin with by the after midnight party crowd? Just responding to demand and under the "cover" of an adjacent BBQ concept -- cute. For young families looking for an appropriate setting to have a meal, an eat in experience at White Castle isn't exactly the Ritz. I personally enjoy a beer with my carnitas burrito at Chipotle, but it is a hassle for the associate at the register to call over an "at age" associate to pull the Corona from the cold case. Your local burger joint can't be happy about this trend. One more layer of calories to add on to our waistlines for a society heavily beset by obesity.

David Slavick, Director, Loyalty & Retention, FTD.com

To expand on Ed Rosenbaum's excellent point, the employees at fast food chain are usually under 21 or if they are over 21, not exactly the model of mature and social responsible adults that can manage an alcohol serving establishment.

No responsible local municipality giving out liquor licenses is going to allow this to happen as this is a huge magnet for youth drinking and driving as well as abuse by teenage employees. We haven't discussed the insurance and liability potential if something happens as a result of serving alcohol at these establishments.

Ed Dunn, Founder, (Stealth Operation)

I guess it's no different than taking the kids to Chili's and having a beer or drink. But, since White Castle was the place I went to eat and somber up during late nights in my younger years, I would put an early "last call" into effect at that particular chain.

'rwhittington'

Brand strategy aside, this is going to boil down to execution. Are all health and safety standards as well as state and municipal regulations being respected? What paper (hopefully electronic) trail exists to ensure that alcohol is being dispensed safely and responsibly? Having an owner/operator sell alcohol is one thing. Scaling the sale of alcohol to a multi-unit QSR environment is quite another. Make sure the training and checks are in place.

Fabien Tiburce, CEO, Compliantia, Retail Audit & Task Management Software

Just because something is possible does not make it a good idea. The restaurant needs to consider which customers it wants to attract, what choices are consistent with its brand image, and how the decision will impact HR policies and liability issues. Then they can decide whether the decision fits their strategy.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Reading the quote, it seems the presence of Blaze was key to deciding to test there. Makes sense.

To me, the more interesting question is what happens as the lines continue to blur between casual dining and fast food. Alcoholic beverages are clearly a staple of casual dining, and margins on alcohol are critical to casual dining economics. To date, I don't think they are a critical part of fast casual economics, but they could be...burgers and beer isn't exactly a new pairing, and selling beer could help keep a lid on "better burger" prices, making them more price competitive with QSR.

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Jonathan Marek, Senior Vice President, Applied Predictive Technologies

The control issues are somewhat of a red herring, since all businesses that sell alcohol have to meet the basic requirements; the question really is whether fast food, given it's nature -- high proportion of take-out, youthful staff/clientele, minimal staffing -- CAN meet them (the implied answer here seems to be "no"). That brau is sold in Mickey D's Deutschland, or le vin in France, is just further evidence how America and Europe are "different"...something not to our credit in this case.

'notcom'

Beer and wine in fast-food chains? Fast food and fast drinking. That's not a good combination in an establishment where most of the workers are under 21 years of age and where kid-oriented promotions are frequent. This is not a business issue. It's a common sense issue.

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John Karolefski, Editor in Chief, CPGmatters.com

No I would not like to see alcohol sales at fast food restaurants! I would like to see fast food chains keep their establishments family oriented. If we start serving beer and wine, let's also dim the lighting and put bouncers at the doors.

Somehow beer and a Happy Meal don't make sense at the same table! Burger King's royal mascot is already crazy enough, can you picture him waddling around with a wine glass in his hand?

The only toasts I want to see in these restaurants is a Diet Coke in a paper cup.

Doug Mason, Director, University Store - BYU-Idaho

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