In the restaurant industry, where margins are razor thin even in the best of times, there is one product that always sells and is always profitable: alcohol.
Most restaurants aim to make about 30 percent of their revenue from alcohol sales. With lower labor costs and inventory that has a long shelf-life, even the most sophisticated cocktail yields larger profits. Plus, while guests typically will order just one meal, they’ll often order multiple drinks.
So it’s not surprising that alcohol sales have emerged as one of the major ways restaurants with beer and wine or liquor licenses are staying afloat during the COVID-19 shutdown. By the end of March, more than 30 states had made legal changes that allow restaurants to sell alcohol with takeout or delivery orders.
Even before the crisis, guests showed a desire for alcohol delivery. According to the National Restaurant Association, 56 percent of consumers over the age of 21 said they would be likely to order alcoholic beverages if they were offered as part of a food delivery order from a restaurant.
Taking advantage of off-premises alcohol sales has the potential to be the difference between the restaurants that survive and those that don’t. It’s no question that the pandemic will change the restaurant business model forever. As restaurants look to reopen, they’re likely to see fewer people eating on premise—whether due to enforced occupancy limits or general fear and anxiety—and more guests looking for variety in the meals they can bring home.
Knowing that the future of the industry will grow more and more reliant on takeout and delivery, the restaurant meals of the future will need to travel well—something that most fine dining and even casual full-service eateries will struggle with. The restaurants that don’t typically sell alcohol—quick-service and fast casual joints—are already well-positioned for this new reality, but the full-service restaurants will need to get creative.
The beauty of a drink is that it travels easily in a bottle or a can, and many bars have seen success selling DIY cocktail kits. The premiere fine dining restaurants of 2025 may have a takeout menu that features a build-your-own cocktail, prepared sides and a seasoned steak to be seared at home.
Fortunately, there is a market for these restaurant-enabled alcohol sales. It’s not just liquor stores that are benefitting from Americans’ drinking habits during quarantine: direct to consumer wine clubs have seen drastic spikes in new memberships, and alcohol delivery service Drizly saw its sales triple when stay at home orders were put in place. As anxious as consumers are to return to some semblance of normalcy, many are also fearful—and that fear is likely to keep people out of bars and restaurants for the foreseeable future.
Unlike recessions past, the impact on alcohol sales in response to COVID-19 has so far been uneven, with canned beverages seeing the greatest increase in sales during a weeklong period in mid-March. Canned cocktails were up 93 percent for the week ending March 21 and canned wines were right on par at a 95 percent increase. This suggests that consumers are looking for something they don’t typically have at home—standard bottles of beer, wine and liquor—and what better way to shake up the at-home beverage menu than with a unique craft cocktail from the restaurant down the street?
To truly capitalize on off-premises alcohol sales, restaurants will need to make it a matter of both convenience and value. Consumers will need to see the restaurant as a one-stop shop that provides a hot meal and something to imbibe; but that drink will also need to represent something they can’t get elsewhere, just as restaurant alcohol sales have always been.
When restaurants are allowed to reopen, they’ll see diminished on-premise capacity, and that business may not be enough to make ends meet. The restaurants that used this time to experiment with their off-premise experience percent from the cocktails to subscriptions percent will be the ones who emerge from today’s crisis the strongest.
Optimize Online Alcohol Sales
While alcohol delivery is a critical lifeline for restaurants, it hasn’t come without its own set of challenges. Here, we’ve compiled a list of considerations for optimizing online alcohol sales.
Know the laws. Before doing anything, consult the state and local liquor laws. They vary across the country. State-by-state information can be found here.
Focus efforts on unique cocktails. To compete with liquor stores and delivery services like Drizly, restaurants will need to focus on unique offerings such as a signature cocktail mix (“Just add tequila!”), a build-your-own kit, or a fully mixed beverage.
Don’t forget IDs. Any business that is selling alcohol will still have to ID the consumer. To make this process as frictionless and safe as possible for guests, remind them they will need to present ID throughout the ordering process and consider a touchless ID check at the time of pickup or delivery. This is as simple as instructing employees to look at or scan the ID without taking it from the guest’s hand.
Take advantage. Relaxing state alcohol laws was intended to be a lifeline for restaurants, and all restaurants should be taking advantage of the new rules while they last. Most alcoholic beverages are (almost) nonperishable, and they are much friendlier to travel than most meals.
Michelle Tempesta is head of product and marketing at Paytronix Systems, Inc., provider of the most advanced digital guest engagement platform, which includes full order and delivery capabilities.