Spirited Stock: Non-Alcoholic Beverages and the Bottom Line

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From Dry January to Sober October, a modern, non-alcoholic revolution is afoot. In truth, it’s been quietly building since the early 2000s, but today, the abstinence/moderation movement has gained steam thanks in particular to the emerging viewpoints of Gen Z, bar culture’s newest—and soon to be greatest number of—patrons.  

According to analysis from CGA by NIQ, a data-driven industry, on-premise consultancy, “Gen Z’s health-conscious habits continue to drive growth in the no/low alcohol category.”  With this evolving perspective, bars and brands have the opportunity to build a new bar culture that serves both those who want to imbibe and those who don’t.

Before the no-alcohol trend truly took off, the low-alcohol scene garnered almost immediate appeal, encouraging a “session-able” approach to drinking. The terminology emerged during War War I when pubs could only serve for a short window of time, once in the afternoon and once in the evening. Workers turned to lower alcohol “session beers” because they could enjoy more and get less inebriated in each drinking “session.” Low-alcohol cocktails took center stage some years back with the popularity of the Aperol Spritz and its cousins. 

Modern low-alcohol and no-alcohol trends play into this “session-able” philosophy in many ways. While many bar patrons and drinkers in general are now opting for low or no-alcohol products, others are simply more focused on balance. One of the most popular ways to drink among today’s consumers is “zebra striping,” which alternates an alcoholic beverage with a non-alcoholic one. The reasoning is simple: less alcohol and more time to enjoy the experience without getting drunk. 

Nick Kennedy, the Food & Beverage manager for Lady Madison at Le Méridien DC, The Madison, has seen this phenomenon at his establishment. “In the past, non-alcoholic cocktails were typically chosen by individuals who didn’t drink, were highly health-conscious, or were pregnant,” he notes. “However, today’s typical guests include younger generations, those spacing out their drinks—particularly earlier in the day or on weekends—and people who want to enjoy a night out socializing but still remain productive the next morning.” 

non-alc cocktail
The Cloud 9 non-alc cocktail at Lady Madison. (Photo: Lady Madison at Le Méridien DC, The Madison )

When Lady Madison started to incorporate non-alcoholic selections on the menu, the team felt it was essential not to label them as "mocktails."  “We list them as 'Free-Spirited' in the Specialty Cocktail section,” says Kennedy. “This name reflects our belief that, although these beverages are alcohol-free, they are crafted and created with the same care and attention as their traditional alcoholic counterparts.”

This opinion of crafting these drinks as sensually as standard cocktails is shared by many other bar managers. With regard to the mocktail concept, Wayne Christian, executive resort chef at Westgate Park City in Utah, says, “We strive to show guests they can have a thoughtfully crafted drink that’s presented with the same level of pride as a traditional cocktail.” The team does this by considering every element “from glassware to garnish.”

As the appreciation of and desire for non-alcoholic drinks grows, there is a natural tendency to look at the bottom line. Historically, when a guest ordered something without alcohol, it was likely a fountain drink, juice, or similar. Christian, whose proportion of mocktails to cocktails served is one non-alcoholic to every 15 alcohol-based drinks, has observed that, “With guests now opting for multiple mocktails versus ordering a refillable soda or tea product, this helps the bottom line by increasing revenue on drinks sold.” 

Adds Kennedy, “In years past, we’d be surprised if more than two or three non-alcoholic cocktails were ordered in an entire day. However, it’s now common to serve well over a dozen per shift, with certain times far exceeding that number.” 

Naomi Schimek, beverage director at the Everly Hollywood, has a slightly different take when it comes to the bottom line. Her menu includes alcohol-free (AF) wines, adaptogens, and mocktails. For her, the choice to include certain n/a products means accepting the small margins on some of them. “Often an AF wine costs just as much, if not more, than traditionally made wines,” she says. “Same goes for AF RTDs; the wholesale cost can be quite high. So, we take the hit to be able to have them on offer. AF Cocktails we make from scratch will generally have the same pour cost as traditional cocktails and are more profitable.”

non-alc cocktail recipe
The Functional Spritz non-alc offering at Everly Hollywood. (Photo: Naomi Schimek, Everly Hollywood)

The potential profitability of single-serve, housemade mocktails is growing not only because the newest bar-going generation is more interested in health and moderation, but also because they don’t mind paying more for a specialty experience whether it’s alcohol-based or not. 

In a feature from CGA by NIQ, client solutions manager Caroline Lakryc noticed a Gen Z drinks trend in Brazil that was also reflected in a large portion of the spirits world. For consumers who choose to go non-alcoholic, “7% are likely to trade up to premium categories… this readiness to spend more for premium alternatives represents a valuable window for suppliers to position their offerings as both health-conscious and high-end to appeal to this discerning consumer base.”

The mere presence of terms like “Mindful Drinking” and “Sober Curious” in the boozy lexicon demonstrates how mocktails are becoming a menu necessity. To keep these non-alcoholic offerings profitable, they benefit from having their own dedicated menu section, showing they hold equal weight with the alcoholic offerings. And, in order to ensure their success, care must be taken to create unique flavor profiles and enhance visual appeal. Not only are these drinks a healthy alternative, but they also offer the non-imbibing patron a sense of inclusiveness because they can enjoy something as impressive and satisfying as a regular cocktail.

Since the start of the modern cocktail renaissance, consumers have grown more and more discerning, and demanding, about what goes into their drinks and how they are presented. This trend continues whether a cocktail or mocktail is ordered. 

From the on-premise perspective, the mocktail movement provides bars with an opportunity to demonstrate their commitment to their customers’ evolving needs, while also creatively helping the establishment’s bottom line: a more exciting alternative drink with a price commensurate to a standard cocktail. As the bar world continues to evolve, the mindful drinking movement, which was once a bit of a gimmick, will likely be embraced as part of the new normal.

non-alcoholic cocktails
The Lavender Sparkle non-alc cocktail at Westgate Park City. (Photo: Westgate Park City)

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