Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Alcohol Sales Remain High Despite Ongoing Recession

Local Georgetown alcohol establishments have seen their profits remain afloat in recent months despite the ongoing economic recession, keeping proprietors in high spirits.

Though the alcohol industry is more recession-resilient than most industries – alcohol is a comparably affordable commodity – U.S. alcoholic beverage companies and vendors have seen slightly decreased revenues over the past six months. But it seems the Georgetown area has been dealt a cushioned blow – one that reflects the economy’s effects on the alcohol industry as a whole.

According to Old Glory Bar-B-Que bartender Erin Seaboyer (COL ’08), the M Street restaurant and bar “has actually been beating all of [its] numbers.this spring.”

“I definitely haven’t seen a decrease in sales. Definitely not,” Old Glory hostess and waitress Stephanie Strianese said.

Capital Restaurant Concepts Ltd., which owns Old Glory, J. Paul’s and Paolo’s Ristorante – both within a five-minute walk of Old Glory – has seen a decrease in beverage sales, according to CRC Chief Financial Officer Martin Craft.

“We are finding that [this decrease] is caused mostly by a shift in the type of alcohol purchased – shifting from purchasing a bottle of wine to purchasing two glasses of wine or shifting from premium liquor to a house liquor or beer,” Craft said in an e-mail. “Old Glory’s alcohol sales have always been strongest for beer, so we are seeing much less sales shifting from one category to the other at Old Glory.”

Nate Ferguson, manager of Wisconsin Avenue’s The Third Edition – restaurant and bar by day, dance club by night – reported a similar “decrease in [restaurant] sales, especially over the winter.”

“I don’t see [a decrease] as much in bar sales, though,” he said. Just as it did before the economic downturn, The Third Edition charges $10 for entry on Friday and Saturday nights, but Ferguson notes that the bar now offers more weeknight drink specials “to bring people in.”

“[Bar] business has picked up since I started working [in February],” bartender Ricky Lewis said. “We’re just fighting for the lunch crowd.”

Across the country, it’s not just restaurants that are suffering; Americans on the whole are leaving their Manhattans at the bar and buying their own bourbon with a new do-it-yourself attitude.

According to the Distilled Spirits Council of the United States’ 2008 Industry Review, while on-premise spirits volume – the amount of alcohol customers buy in restaurants and bars – decreased by 2.2 percent in 2008, off-premise spirits volume – alcohol purchased in liquor stores – increased by 2.9 percent. U.S. liquor revenue altogether increased by 2.8 percent in 2008, well below the 6.0 percent average annual growth since 2000, the report said.

According to Reuters, industry giant Constellation Brands, Inc., which owns Corona Extra, Corona Light, Twin Fin, Monkey Bay and Black Velvet Canadian Whiskey, made less-than-optimistic profit projections for 2009, despite reporting a slight increase in 2008 fourth-quarter profits in North American wine sales. In 2008, the sale of Constellation-owned beers dropped 6 percent. The New York-based corporation said the recession is causing many Americans to buy lower-end, cheaper drinks, a development that might cut Constellation’s sales this year.

Back in the District, Georgetown liquor stores reported mixed revenue fluctuations since last September.

Inside Wisconsin Avenue’s Towne Wine & Liquors last month, bright orange “SALE” signs covered dozens of boxes of wine bottles. New Harbor wine was marked down from $14.99 to $12.99; the Oyster Bay and Rosemount brands featured similar specials. While some bottles of vodka and cases of beer were offered at reduced prices as well, wine appeared to be the overwhelming sale item. According to employee Eder Zetiyenga, though Towne has always offered specials like these, they are more necessary now.

“It’s not just here. . [Liquor store owners] around here are complaining business is slow, slow, slow . because [customers] go cheap now, they don’t buy as much expensive stuff,” Zetiyenga said.

But other Georgetown liquor stores – particularly Potomac Wine and Spirits and Dixie Liquors, both located on M Street – don’t seem to be having the same problem. “Everything just seems the same,” Potomac owner Steve Seldman said. “I’ve seen no dramatic changes in our numbers since this recession started. . Right after the inauguration [of President Obama], sales picked up, then dropped again. It was kind of a false hope.”

The Distilled Spirits Council of the United States attributes the alcohol industry’s partial resilience in a weak economy to the continuation of Americans’ “fascination with [the] cocktail culture . [as an] affordable luxury.” Or, for the majority of Americans who are cutting back altogether, DISCUS posits that consumers might see liquor as having “good value relative to other beverages” – that is, consumers need to drink less to achieve the same effect, thus making spirits comparably inexpensive.

According to DISCUS, liquor has remained notably resilient in most recent recessions, not just this one. The notion of alcohol as an affordable luxury is not uncommon, either, and is strikingly reminiscent of the candy industry. Candy giant Cadbury reported a 30 percent increase in profits last year, while Nestle saw a 10.9 percent increase; similar corporations, notably Hershey’s, thrived during the Great Depression. The reasoning for both industries’ resilience is similar: Grabbing a beer and a candy bar is not only comforting during stressful times, but it won’t break the bank, either.

“I think that in times of economic recession, [customers] need an outlet; they’re just worried,” Old Glory’s Seaboyer said.

Strianese attributed Georgetown’s softened economic hit to nearby colleges, including Georgetown University and The George Washington University.

“We’re in a college town, so I feel like kids spend their parents’ money, not their own,” she said.

More to Discover