Restaurant Industry Shifts as Younger Consumers Prioritize Experiential Dining Over Alcohol
Carbone CEO says younger customers spending less on drinks but more on high-end dining experiences, as alcohol stocks face pressure
Quick Look
- Mario Carbone, CEO of Major Food Group, says younger consumers are drinking less but spending more on experiential fine dining.
- Major alcohol stocks have declined significantly over the past year, with Constellation Brands down 16.8% and Diageo down 28.9%.
- Carbone's restaurants like Carbone, Torrisi and Parm focus on theatrical dining experiences with tableside preparations, helping offset softer alcohol consumption trends.
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Why It Matters
The shift toward health consciousness among younger consumers has been building for several years, with alcohol companies reporting slowing volume growth. Major Food Group has capitalized on this trend by positioning its restaurants as experiential destinations rather than traditional dining establishments.
The restauranteur behind New York's famed Carbone said there's been a big shift in consumer behavior with younger customers spending less on alcohol but more on high-end dining experiences.
"They're definitely health conscious. There's certainly been a trend of drinking less," Mario Carbone, the CEO of Major Food Group, said on "Mad Money" on Friday. "But what they're also saying is we're willing to spend a disproportionate amount of money on experience … travel, dining."
Over the last few years, alcohol stocks have been under pressure, as major brewers and spirits makers grapple with slowing volume growth, weaker demand among younger consumers, and a broader shift toward moderation. Modelo brewer Constellation Brands and Johnnie Walker distiller Diageo are down 16.8% and 28.9%, respectively, over the last year.
"It's a pendulum. It will swing back and forth," he said, describing how consumer attitudes toward alcohol tend to shift over time. Right now, though, that shift is playing directly into Major Food Group's strategy.
The company, known for restaurants like Carbone, Torrisi, and Parm, has built its brand around what Carbone describes as "theatrical, experiential fine dining" — a model that treats restaurants more like a performance than a meal.
"Theater is the greatest comparison," he said. "At the same time every night the curtain goes up…we're putting on this show, this performance, every night."
At its flagship Carbone in New York City's West Village, servers prepare Caesar salads tableside, while other locations feature desserts flambéed in front of diners. Major Food Group's focus on experience, rather than just food or drink, Carbone explained, is helping offset softer alcohol consumption trends across the industry.
While fewer drinks might typically pressure restaurant margins, Carbone said customers are making up for it by spending more overall on memorable outings. "If you give me an experience, give me something intangible … I will be free with my cash," he said.
The strategy appears to be working. Major Food Group has expanded rapidly, with new locations opening in cities including Mexico City, São Paulo and Tokyo, while also growing its consumer products business to reach customers beyond its limited restaurant footprint.
Open Questions
- Will the pendulum swing back toward higher alcohol consumption?
- How will alcohol companies adapt their strategies to attract younger consumers?
- Will experiential dining continue to grow or reach market saturation?
