The Science of Happy Hour [Kicking Back with Jersey Joe]

It’s those few magical hours, when your favorite watering hole drops their prices, enticing you through their door. This marketing ploy to lure in thirsty drinkers has been going on for centuries. There’s more involved than just getting you to belly up to the bar.

“Happy hour” refers to a certain amount of time set aside for restaurants or bars to offer a select menu of discounted food and drinks to gain customers.

In the United States, most happy hours occur Monday through Thursday, when patronage at these establishments is often lower. In the beginning happy hour was only that – an hour. In recent years, it has been extended to “happy hours” often going on for the majority of an afternoon.

A bar advertising their happy hour(s).

The United States Navy may be the first to thank for establishing a happy hour as early as the 1920’s. No, sailors on ships weren’t getting crocked, but the term “Happy Hour” was used for scheduled entertainment such as movies or sporting events. It was basically a scheduled rest time for those on board to blow off some steam.

When Prohibition hit the United States and bars were legally prevented from serving booze, thirsty Americans would host cocktail hours in the home or at a speakeasy before dinner, thus becoming ‘happy hours’. In order to get into a speakeasy, you had to know someone, or know the password, for fear that you could be the law, wanting to shut the place down.

The now closed O'Shea's Casino in Las Vegas, Nevada had an 18 hour happy hour special. O'Shea's is scheduled to reopen after relocating to the upcoming Project Linq.

While happy hours are well known across the country: Massachusetts and Utah have completely banned them, as have clubs on military bases. In June 2012, Kansas ended their 26 year ban. A couple of year ago, Pennsylvania extended the amount of time a bar can market their happy hour from two to four hours. In Alberta, Canada, happy hours have been restricted to ending before 8pm. In Ontario, the words “happy hour” may not be used in any advertising.

Both Ireland and the Netherlands have banned any forms of happy hour. Glasgow, Scotland is one of the largest cities in the world to place a ban on them as well.

Spike TV has been producing a reality show (which is now shooting another season) that gives a sneak peak into the science of bar management called Bar Rescue. On the show, bar expert John Taffer, travels the country helping under performing and debt ridden bars from closing.

Bar Rescue shows there’s more than just grabbing a bunch of buddies and opening a place. Everything from the positioning of the bottles behind the counter, to feature the top shelf liquor, to having kegs of beer that pour more glasses per keg without foam and waste, which hurts an owners profits, is part of the successful operating equation.

One marketing term featured on the show is ‘loss leader’. That means a bar will take an item and purposely charge less for it, taking a loss in profit, just to get you in. They hope that you will then go for an expensive drink, or perhaps order additional items.

A giant beer served as a happy hour special in Seattle, Washington.

Food wise, a bar will often drop the price on a burger as a happy hour special. If you order the simple burger, it will cost the bar more to make it in labor and supplies, than they charge you for it. Adding a slice of cheese for $1 or bacon for another $1 can help return some of the bar’s loss. It doesn’t cost the place $1 to buy the individual slice of cheese or bacon, it may cost only a few cents, and what they get in return from you is profit.

Bars do the same for happy hour drinks. They may charge you only $2 for a Bud Light during happy hour, but they’re hoping to make that money back by either having you order food, a more expensive drink later, or have you stick around after the special has ended. They are also hoping that not everyone in your group will go for the special and they can earn a return on that.

Bar owners work out deals with their suppliers as well. Some suppliers will offer discounted booze that may be new or under performing in exchange for some free marketing. Which in turn, the bar may offer as a happy hour special or feature promotion. In some cases, the company will even send promo items and marketing teams to the individual bars to get patrons hooked. During football season this year, Coors Light and Miller Light had teams out and about offering t-shirts and discounts to those ordering their product. It’s all part of a marketing pact between the distributor and the bar.

At the end of the day, bars are a business and they’re in business to make money. It may be a fun place for you, but if they can’t pay the bills — they’re gone!

Look how happy she is enjoying her happy hour beer.

THE 411

Name: Happy Hour
What: selected times when bars and restaurants will offer discount specials on food and drink
Where: banned in Massachusetts and Utah, available in most other states

JERSEY JOE RECOMMENDS:

Take advantage of your local bar’s specials when you see them. They can greatly lower the cost off your night out on the town. Sure, you may not prefer Admiral Nelson over Captain Morgan rum, but when your mixed drink is several dollars more, it can add up.

Image credits: digital_shutterbug, John_Brennan, voorism, Nonsequiturlass, and geekgirl24

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