Covid-19 sparked major changes in sales strategies at the retail tier, as well as beverage alcohol industry emergency regulations nationwide. On-premise cocktails-to-go has gained the most visibility and traction, with 16 states and Washington, D.C. making drinks carryout permanent and 14 states allowing it at least into 2022. During the pandemic peak, the measure gave struggling restaurants a lifeline. Now some retailers are concerned about long-term consequences.
“We helped pass cocktails-to-go with the understanding it wouldn’t become permanent,” says Ryan Maloney, president of the Massachusetts Package Store Association and owner of Julio’s Liquors in Westborough, Massachusetts. “If you want drinks carryout to be permanent, changes are needed in how the law is written.”
In all, 39 states enacted temporary laws last year to allow cocktails-to-go, and the Distilled Spirits Council of the United States (DISCUS) has been one of these measures’ biggest proponents. “A lot of restaurants typically get 25%-30% of their revenue from alcohol,” says David Ozgo, senior vice president of economic and strategic analysis for DISCUS. “If you’re limited to carryout food, you’re cutting a revenue stream. Now we are trying to make or have made drinks carryout permanent in a number of states.”
In Massachusetts, the measure was extended to May 1, 2022, but advocates want an additional extension. “It’s not just pre-made cocktails, but also wine and beer, and substantial quantities as well,” Maloney says. “If the current scheme is made permanent, I can come up with a great new business model where I can sell drinks-to-go until bars close at 2 a.m.”
In New York, retailers opposed making cocktails-to-go permanent, and the measure expired on June 24. Elsewhere, store owners have mixed feelings because to-go prices are significantly higher than retail. “It doesn’t hurt us much because they are so expensive,” says Jack Backman, owner of Cheers Liquor Mart in Colorado Springs, Colorado. Prices, however, can change. “The prices are high now, but when do they decide the prices don’t need to be so high?” Maloney asks.
Like restaurants, some store operators faced financial challenges during the pandemic peak. “Any retailers who rely on tourists or aren’t set up for online ordering or curbside pick-up were at the mercy of in-person clientele,” Maloney notes. “We were happy we got to stay open, but the cost of doing business went up. We were selling half gallons of vodka, 30-packs of beer, and bag-in-the box wines. We have increased costs and we’re trying to keep all our employees, with low-profit items going out the door.”
Overall, many retailers experienced double-digit sales growth fueled by online orders, curbside pick-up, and home delivery. Cheers teamed with City Hive in February of 2020 to launch live shopping carts for its store website and app and initiated curbside pick-up when lockdown started in March 2020. “We were doing 40-50 curbside orders each day and now it has dropped to 20 or 30,” Backman says. “For home deliveries, we went from one truck in 2019 to three trucks in 2020. In 2019, we averaged about 30 deliveries a week and now we average 130-150 deliveries per week.”
Julio’s in Massachusetts fulfills hundreds of curbside orders a week and did 150 in one day during the last week of July. “Curbside pick-up has a huge convenience factor,” Maloney notes. The latest Buffalo Trace Kentucky Straight Bourbon barrel release ($32 a 750-ml.), the 2017 Raeburn Russian River Valley Chardonnay ($17 a 750-ml.), and Fiddlehead IPA 12-packs ($19 a 12-pack of 12-ounce bottles) led sales because they were new to market. Online orders remain crucial. “Through the pandemic, we saw 50% of our business online,” Maloney says. “We are still around 40%-50%. It was virtually non-existent before the pandemic.”