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SUSTAINABILITY & EFFICIENCY

With many establishments closing down, it’s important to differentiate yourself and acquire that extra market share. The major patterns we can see involve a move towards sustainability and a general awareness of health and wellbeing across the industry. We also expect a growing reliance on technology, data collection and analysis in order to make better decisions and achieve higher operational efficiency.

Startups Disrupting the Drinks Menu

INDUSTRY TRENDS

DRINKS

TRADITIONAL ALCOHOLIC DRINKS

Classic Cocktails: DrinkUp London, organizers of the London Cocktail Week, predict a resurgence of classic cocktails. This comes at the expense of more complex and time-consuming options that slow down service and require more expertise. So unless you specialize in cocktails, think about reducing your selection and focus on classics like Mojitos and the Old Fashioned. This will require fewer resources on bartender training and speeds up the service so it’s a win-win for your customers and your operations.

Spirits: These startups produce spirits, ranging from mezcal with El Silencio, to a Greek liqueur called mastiha with Kleos Spirits, to direct-to-consumer aperitif brand Haus. The vast majority of companies here are craft brands, meaning they are independently owned and produce lower volumes of spirits than the brands owned by large spirits companies, such as Diageo or Pernod Ricard.

Wine: Companies in this category are making it possible to “adopt” some vines to produce your own wine (Cuvée Privée), order champagne directly from producers (EPC), and support charitable causes by buying wine (ONEHOPE).

Beer & cider: This category includes smaller beer and cider brands, with most of them being independently owned and producing lower volumes, thus qualifying as craft. With the increasingly crowded craft beer space, some brands are betting on sustainability to differentiate themselves. This includes Toast Ale, which brews beer with bread that would otherwise go to waste.

Barrel Aged Beer: Barrel aging is a process formerly reserved for wine and spirits, in which alcohol is left to age inside a wooden barrel. Over time, the liquid becomes infused with the natural flavors of the wood. This was originally used as a convenient storage method, but when it was discovered that the wood barrels added richness and complexity to the spirits, it became a standard process. Beer makers have been using this method as early as the 1990s, but it’s recently become common to see barrel aged versions of popular craft beers. Barrels that have been used to age spirits like whisky, bourbon, or brandy can be reused to impart unique flavors to beer. This is a popular technique to use with winter beer styles like barleywines, imperial stouts, and porters.

EMERGING ALCOHOLIC DRINKS

Hard seltzer: Hard seltzer is a low-alcohol, low-calorie, flavored, carbonated water-based drink that has been popularized by the White Claw brand in the US. Its popularity is attributed to the intersection of a couple different consumer trends. Products with low ABV (alcohol by volume) percentages. Spiked seltzers low ABV (alcohol by volume) percentages hover around 4.5% to 5% ABV, which puts them in line with a light beer to appeal to customers who prioritize wellness but still want to enjoy an alcoholic beverage

Hard tea & coffee: These companies offer alcoholic tea and alcoholic coffee drinks. KPMG reports that sales of low-alcoholic wines, beers and spirits are on the rise. In addition, low-calorie hard seltzer is expected to hit $2.5 billion in revenue by 2021. This indicates a growing preference for healthy alternatives, largely fueled by millennials looking for new and unique offerings. Mixologists are looking for exciting, new ingredients to use in cocktails, with blends of beer, tea, or kombucha. You’ll find unique concoctions that incorporate hop-forward beers with spirits, fresh juices, and bitters. The tart, fizzy flavor of the fermented beverage kombucha works well as a drink mixer and is thought to provide health benefits.

Canned wine & cocktails: This category is centered around convenience by offering canned alcoholic beverages such as wine and cocktails that are easy to carry around. Social, for instance, offers canned sparkling wine blended with super-food extracts and flower essences, while Ohza produces ready-to-drink mimosas.

NON-ALCOHOLIC DRINKS

Mocktails: According to Mintel, orders for alcohol-free mixed drinks grew by 35% between 2016 and 2019. The craze over low ABV drinks has now evolved to 100% virgin cocktails that are as finely crafted as the alcoholic kind. Consumer awareness of cocktails has changed from the basic mixed drink to an intricate, meticulously crafted production. Non-drinkers want to socialize with their friends in a bar environment and enjoy a carefully prepared drink with complex flavors. So it comes as no surprise that numerous alcohol-free bars are opening doors across the country. In addition, traditional bars are also updating their menu with mocktails and other zero-proof drinks.

Mixers: This category includes non-alcoholic beverages that are meant to be mixed with alcohol. Just as coffee enthusiasts are happy to pay double or more for a brewed coffee, premium mixers with zero calories are also on the rise in the bar industry. The high quality ingredients are valued by the market and so you can enjoy high margins on certain cocktails and mixed drinks. So if you’re not doing this already, stock up on more expensive mixers and update your recipes to improve your bottom line.

Cannabis-infused drinks: With more states legalizing cannabis, the cannabis-infused beverages category is emerging to compete with alcoholic drinks. This category focuses on cannabis-infused beverage brands, such as Cann, that specifically target social drinking occasions.

Alcohol-free drinks: Riding the low- or no-alcohol trend, these startups offer alcohol-free alternatives to replace beer (Athletic Brewing Co), wine (Tost), cocktails (Mocktail Beverages), and spirits (Stryyk). Among them, UK-based Crave targets party-goers with a canned caffeinated virgin mojito.

BUSINESS

1. Microdistilleries

Microdistilleries, also called craft distilleries, are operations that specialize in producing small batch liquors. Just like the rise of craft beers, we are seeing an increased demand for craft spirits as consumers are looking for distinct, artisanal products. Because the bar industry has seen this shift before with microbreweries, it’s been much easier to anticipate the trend by stocking craft spirits from local microdistilleries.

As to what type of distillery qualifies as a micro or nanodistillery, the American Craft Spirits Association has listed three defining characteristics:

  • A distillery who values the importance of transparency in distilling, and remains forthcoming regarding their use of ingredients, their distilling location and process, bottling location and process, and aging process.
  • A distillery that produces fewer than 750,000 gallons annually.
  • A distillery that is independently owned and operated, with more than a 75% equity stake in their company and operational control.

2. Upscale Dive Bar

Every town has a local dive bar where comfort and familiarity are prioritized over style. Cheap drinks, dim lighting, and a jukebox full of old favorites are part of the charm of the classic dive. The not-so-charming side of dive bars might include poor sanitation, lack of menu variety, and sometimes a rough crowd.

Bar owners are elevating the concept of the dive to create an atmosphere that feels like the bar down the street but with improvements. Welcome to the upscale dive, where you can still buy a Pabst Blue Ribbon but also get a refreshing cocktail made with top-shelf liquor. Yes, the bathroom is still full of kitschy decorations, but it’s also spotlessly clean with updated fixtures.

3. Self-Pour Beer

Self-pour beer walls are a new type of dispensing system that gives customers direct access to beer taps. Each tap is activated by swiping a prepaid beer card or wristband, allowing customers to pour as they please. The self-serve technology used to create these taps includes safety measures like government ID verification and automatic shutoff when a customer has reached their limit of beer in ounces that has been prepaid. It cuts down on labor costs for bar owners and eliminates the risk of a bartender overpouring.

While there isn’t much official data about self-service in bars, it seems like a growing number of establishments offer self-pour beer, alcohol vending machines and cocktails on tap.

4. Cocktails on Tap

Serving cocktails on tap is just another way for bartenders to streamline their service and attend to more customers in one shift. It also ensures the consistency of the product so that every drink tastes the same, no matter which bartender is pouring.

On busy nights, it takes mere seconds to pour a cocktail from the tap. This equates to labor cost savings that can be passed onto the customer. If your drinks are more affordable, there’s a greater chance your guests will purchase more than one. Choose a few popular cocktails to offer on draft on busy nights and save the more involved mixology for one special drink.

5. Alcohol Vending Machines

Just like self-pour beer, alcohol vending machines provide another way to serve customers quickly and eliminate long lines. The Beer Box is a vending machine that serves cold beer and even opens the can before dispensing. These types of vending machines provide alternative points of access for customers in busy environments like nightclubs or festivals. They also make great photo ops for your business’s Instagram page.

You can find a new Moet & Chandon champagne vending machine at the Lexington Hotel in New York City. To operate the machine, guests must first purchase a $25 gold coin from the hotel’s 1920s themed bar, the Stayton Room. The coin is used to dispense a chilled 200 ml bottle of champagne and a complimentary flute.

6. Alcohol Delivery

There’s no question that delivery is at the forefront of foodservice trends. New technologies that help restaurants deliver food more quickly than ever have been popping up continuously in the last year. Third party delivery services like Uber Eats and Postmates are some of the fasting growing businesses in the country. But what about alcohol delivery? Today, when the average person orders takeout, they aren’t just sticking to entrees. They want appetizers, desserts, and a six-pack of beer to go with their meal.

Alcohol delivery is primed to become one of the biggest trends of 2020, as long as bars and restaurants can jump through a few hoops to make sure they are abiding by state and local regulations. Pizza Hut started testing alcohol delivery in 2017 and plans to expand the service to locations in seven different states. In preparation for the expansion, they trained their employees to verify customer IDs and handle the product appropriately.

7. Sustainability

According to Diageo, almost half of consumers are willing to pay a 10% premium for goods produced and sold in a sustainable way. But in 2020, this goes beyond using organic ingredients or avoiding single-use plastic and disposable napkins. Many bars are now looking for environmentally responsible vendors and equipment manufacturers as a way to comply with regulations, meet market demand and play their part in building a more sustainable future.

8. Operational efficiency

For many bars and nightclubs, losing employees despite heavy investment in training is simply a part of the day-to-day. As employee wages go up, it’s even harder to attract and retain good talent that can double as bartenders and servers too. The key thing you can do today to boost your bottom line immediately and running a successful bar is creating and maintaining strict operating procedures that everyone must follow. Still, the biggest shift in efficiency usually comes from technology.

9. Data and technology

Technology now plays a crucial role in running a successful bar and we expect this trend to grow into better data collection and analysis. It’s great to know your best sellers, most profitable drinks and other market information so you can make better decisions in the future.

 

Source: CBinsights.com, Nightclub.com

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