Booze Blues

By BILL BAROL/LAS VEGAS

It turns out that the old saw about people drinking their troubles away in bad times--and boosting bar business--isn't true. Liquor sales lately have moved in step with the economy, which explains why so many attendees are driven to drink here at the annual bar-industry trade show in Las Vegas. With business stagnant at nightclubs, taverns, and restaurant and hotel bars, this is an industry thirsty for a new sensation.

Next Big Things come and go--remember dry beer, "malternative" beverages and low-cal cream liqueurs?--but the industry has very high hopes for one ongoing craze: from chocolate vodka to tequila-and-lime-spiked rum to sour-raspberry schnapps, flavored spirits are multiplying like empty shot glasses on a 21st birthday. Flavored rums rose from 18% of total rum sales in 1998 to 39% last year. Flavored vodkas are similarly flush. Even Martin Friedland of Jenkintown, Pa., an importer of fine spirits for more than 50 years, won't call flavored liquors a fad; the worst he'll call them is a "fling."

To be fair, the bar show doesn't look like a gathering of the troubled. This may have to do more with the gallons of free liquor being dispensed at dozens of booths than with statistics, like the one from the National Restaurant Association indicating that bar revenues barely kept pace with inflation in 2002. In part, the sluggishness can be traced to a post-9/11 shift in leisure tastes. After the terrorist attacks, business dropped off at upscale restaurants and clubs. "People would still go out, but not to spend as they did before," says Michael Harrelson, editor of the trade publication Nightclub & Bar.

For the past decade, through good times and bad, Americans have drunk less but better, boosting superpremium liquors like Grey Goose vodka and Patron tequila, which cost $3 to $4 more a drink in bars than house brands. Profit margins on such brands are higher all the way from distillery to bar, but they barely balance out the industry-wide drop in volume.

It's clear that today's young bargoers--the industry's cherished 21- to 28-year-old core customers--aren't much interested in old-school labels like Dewar's or Wild Turkey. Catching their eye means selling at bars; bars in turn influence retailers. That's why the bar show is a must for firms like White Rock Distilleries of Lewiston, Maine, which flogs such novelties as schnapps in flavors called Poison (Wild Berry) and Sting (Sour Raspberry). Because the slogan for the new line is Have You Had Your Shots Today?, samples are served by statuesque blonds in white-vinyl nurse uniforms and thigh-high stockings. The visual becomes even more apt after a slug of Poison, which tastes almost exactly like paregoric.

Classic spirits are represented at the bar show, as is beer. But in the race to tempt the palates of a generation brought up on mocha frappes--and maybe even, in some cases, grab the sweet-toothed fake-ID crowd--what chance does, say, a fine vodka like the venerable Russian Magadanskaya have against Ciclon, the tequila-and-lime-spiked rum, or Coco coconut-flavored rum, both getting big play at the Bacardi booth? ("There's not another 70-proof coconut rum out there," says Steven Messer, a Bacardi assistant marketing manager.) Or against Atomic X's cloying, vaguely tropical, nonalcoholic energy drink being touted as a bar pick-me-up?

Magadanskaya, the vodka served by Stalin to Truman and Churchill at Potsdam, is smooth and bracing. A sip makes Robert Plotkin of BarMedia, a well-known consultant, say, "Oh, my goodness." But it tastes like ... vodka. Its importer, Sylvia Scherer, of West Import & Export in Kenai, Alaska, is marooned near the back of the hall, far from big corporate booths pushing Stoli Cranberi vodka and Tarantula Azul tequila. Scherer struggles to nail down distribution beyond Alaska, California and Georgia. "One of these days everybody's going to discover us," she says. For now, she swims against a purple, berry-flavored tide. --With reporting by Julie Rawe/New York

With reporting by Julie Rawe/New York