TL;DR
The bar industry is experiencing growth despite pre-existing challenges and pandemic-related closures. Three significant trends have emerged:
- Healthy drinks are in demand, with a preference for low-alcoholic and low-calorie options. Consider offering kombucha and plant-based beverages to cater to health-conscious customers.
- Customers are showing a preference for locally-produced drinks, including craft beer and regionally-made gins. Explore local breweries and incorporate their products into your offerings.
- Zero-proof and mocktails are on the rise, appealing to those seeking alcohol-free options. These drinks are profitable and cater to the growing demographic of health-conscious individuals. Incorporating mocktails into your menu can be a smart strategy.
Trends in the 2023 Bar Industry
The alcohol industry is thriving this year, with total revenue amounting to approximately USD 284 billion in 2022. It is projected to experience an annual growth rate of 7.45%. We already wrote a similar guide for wine merchants, but bars, nightclubs, and restaurants contribute to more than half of this revenue, while online marketplaces account for a tiny 1.5% of the total sales.
Despite the robust figures, bars, and nightclubs were facing challenges even before the pandemic. In fact, The Economist reported that the number of nightclubs in the US had already declined by around 10% in the decade prior to Covid-19.
As anticipated, the industry encountered further difficulties during the pandemic. Fortune revealed that around 110,000 food and beverage establishments closed their doors at the peak of the crisis.
How has the industry changed since then? Well, the average revenue per establishment is likely to increase in the immediate future. With fewer establishments vying for a larger share of the market, the stakes are higher this year. That’s why you should have your eye on three significant trends in the industry we’ve seen in the last year with the help of companies like Evidnt.
Healthy Drinks Are In Demand
Sales of low-alcoholic wines, beers, and spirits are on the rise, a post-pandemic data indicates that there is an increasing interest in low-calorie drinks in the coming years. This highlights a preference for healthier alternatives, driven primarily by millennials seeking new and unique options.
To leverage this trend, consider expanding your offering to include a variety of healthy drinks such as kombucha and plant-based beverages. Ensure that your bartenders are well-trained to present these alternatives as healthier options to soft drinks and beer.
Customers Want to Drink Local
Microbreweries, which produce limited quantities of specialty and craft beer, have gained popularity. In the US alone, there were over 7,000 craft breweries in 2018, with 4,522 classified as microbreweries. This represents a remarkable 7-fold increase in just eight years from 2010.
The surge in microbreweries aligns with the growing consumption of craft beer. Furthermore, there has been a rise in Brewpubs and regional breweries, indicating a preference for locally-produced, authentic beers.
If you haven’t already, explore the breweries in your area and introduce their products to your customers. Offering a selection of local drinks accompanied by engaging storytelling from your staff is likely to keep customers coming back for more.
A recent offshoot of this trend is the emergence of internationally-made gins that incorporate local flavors. Examples include the India-based Jin Jiji brand, the Four Pillars Bloody Shiraz Gin, and the Vietnamese Song Cai.
Zero-Proof and Mocktails Are Still a Thing, Apparently
There has been a 35% increase in orders for alcohol-free mixed drinks between 2016 and 2019. It’s no surprise that alcohol-free bars are popping up nationwide, catering to the growing interest in these beverages. Traditional bars are also jumping on board by incorporating mocktails and other non-alcoholic options into their menus.
The appeal of these drinks lies in their profitability. They can be made using inexpensive ingredients while still being priced similarly to regular cocktails. This is especially appealing in the aftermath of the pandemic, as many establishments are still recovering from the financial setbacks caused by the Covid-19 lockdowns over the past couple of years.
Mocktails, in particular, are highly popular among young women and the growing demographic of health-conscious individuals who prefer zero-alcohol options. This demographic has emerged due to the unique circumstances of the Covid-19 pandemic. Incorporating these beverages into your menu could be a smart strategy to cater to their desires.
