July 20, 2020

Alcohol to go might be magic potion for struggling restaurants

The trend toward restaurant alcohol delivery was increasing before the coronavirus began. The virus only accelerated the trend.

When COVID-19 first took hold in the U.S. earlier this year, most bars and restaurants had to either close temporarily or transition to takeout and delivery only. As restaurant sales plummeted, state governments sought to throw operators a lifeline. They responded with temporary executive orders to permit the sale of sealed, unopened bottles of wine, beer, and spirits to go.

In May, National Restaurant Association research found that because of the coronavirus, the industry lost $120 billion during March, April and May. That downward spiral continues, especially in states where there’s been a resurgence of the virus. Some restaurants that reopened are again looking at closing again, and returning to takeout and delivery only. The ability to sell alcohol with those off-premise food orders, while not a cure-all, could help recoup some lost revenue.

The trend toward restaurant alcohol delivery was increasing before the coronavirus began, says Hudson Riehle, vice president of research. In fact, the Association’s 2019 Restaurant Delivery Survey found that 56% of all adults said they would order drinks with their food delivery order from a restaurant, if permitted.

The virus only accelerated the trend, says Mike Whatley, the Association’s vice president of state and local affairs, who notes that alcohol sales are creating essential revenue for many struggling restaurants.

“When the pandemic forced in-restaurant dining to temporarily close, operators couldn’t sell the beverages on the premises, so a bipartisan group of lawmakers expanded regulations to accommodate the sale during the crisis,” he says. “The new regulations have proved popular with both operators and customers.”

However, there is still a lot for restaurateurs to consider when selling alcoholic beverages, such as keeping their liquor licenses, liability issues and reputational damage. Even though rules and regulations around the to-go sales are primarily temporary and vary by state, they also are subject to change.

For example, many states allowing the sale have mandated that restaurants ensure the beverages are sealed in securely covered containers. They’re also typically sold as part of a food order; only a few states allow the sale of alcoholic beverages alone.

To help operators stay on top of and in compliance with the rules, the National Restaurant Association’s ServSafe Training and Certification Compliance team has compiled a State Alcohol Delivery Laws/Orders/Regulations tracker.

“We noticed a state-by-state trend of consumers wanting to have alcohol delivered with their food orders,” says Kate Piche, director of the team. “Since they couldn’t go into bars or have alcoholic beverages with their favorite meals in a restaurant dining room, demand for alcohol delivery started to grow. Restaurants in states that had laws allowing alcohol delivery quickly realized that adding beer, wine and even cocktails to their offerings could help them stay in business.”

Piche says the team updates the tracker every couple of weeks with the latest changes and additions. It offers information on whether or not operators can sell the beverages and how, including:

  • If restaurant alcohol delivery is allowed
  • If third-party delivery is allowed
  • If a food purchase is required with the alcohol order
  • Whether customers can purchase beer and wine only
  • What the container requirements are
  • Whether the rule is temporary or permanent
  • The date the rule was enacted and expires
  • If the states allowed alcohol to be delivered prior to the pandemic; and
  • If there are any additional requirements to follow

Whatley says the Association’s state-level polling indicates that support for making off-premise alcohol delivery permanent today ranges between 70% and 85%.

“For restaurants, the road to recovery is going to be a long one,” he notes. “Expanded off-premise alcohol regulations are one of several policies restaurant operators will need going forward.”