The surgeon general’s warnings about alcohol come to restaurants at a complex time

The U.S. Surgeon General’s recent initiative to warn consumers about the link between drinking and cancer comes at a precarious time for restaurant owners trying to estimate profits that depend on alcohol sales.

Food and labor costs have risen, and some Americans weary of inflation continue to rise cut back on eating out. Sales decreased by 1.7 percent between November 2023 and November 2024, according to the National Restaurant Association.

When people go out to eat, some people don’t drink as much. In particular, they include representatives of Generation Z by controlling how much they consume and helped popularize terms like “sober curious” and “California sober,” in which cannabis replaces alcohol. According to the research firm, a September study found that 32 percent of all consumers who drink at least a few times a year were drinking less frequently in 2024 than before the pandemic. Necessary data.

“We are entering a recent era of non-alcoholic drinking,” said Renee Wege, the company’s trends expert and publishing manager.

Surgeon General Vivek Murthy warned Friday that alcohol is a preventable cause of cancer and called for a reconsideration of the federal government’s guidelines on how much alcohol Americans can safely drink. He said that, as with cigarettes, warning labels already on alcoholic beverages should mention the cancer risk.

For restaurants that are constantly trying to offset rising rent, food and labor costs, selling alcoholic beverages has long provided a reliable source of income. A 2023 report from the National Restaurant Association found they had reconciled approximately 21 percent of total sales in full-service restaurants. In some restaurants, this percentage was close to 30 percent.

It is too early to know whether the report, which comes after years of warnings about the health risks of drinking alcohol and the increasing employ of GLP-1 drugs that may reduce the desire to drink, will further sluggish down alcohol sales in restaurants. But owners are preparing for this and many have already started offering more tender drinks.

“This news we just received will probably have an impact on the situation,” he said Tracy Vaughtwho, along with her husband, a chef, owns five restaurants in Houston Hugo Ortega.

Alcohol sales in its restaurants are dwindling. In 2015, they generated 31.5 percent. company revenues. Last year, this share dropped to 27.5%. “It doesn’t seem like much, but it really makes a difference,” she said.

Although alcohol generates much less revenue for restaurants than food, the profit margins on beverages are much greater and the financial risk for owners is lower. Unlike a refrigerator filled with perishable food, the bar is stocked with non-perishable supplies. It is also easier to manage labor costs in the bar.

At a restaurant in Atlanta Gun showsales of alcoholic beverages account for about 30 percent of total revenues but provide about 80 percent of profits.

“Over the last four years, food margins have declined so significantly that without a stalwart beverage program, restaurants are unable to cope,” he said Kevin Gillespieowner of Gunshow and a restaurant with a tasting menu Nature. “But there are artistic paths out of it.”

Customers may not want alcohol, but many still want a cocktail. Making sophisticated tender drinks as appealing as their alcoholic counterparts is a challenge, but if you do it right, they’ll be priced almost identically, Gillespie said.

Ryan Schmied, the company’s director of food and beverage Amway Grand Plaza Hotel in Grand Rapids, Michigan, took action a year ago after noticing dwindling sales of alcoholic beverages, especially beer and wine.

Some changes were simple, like adding no- or low-alcohol beer and wine and expanding bottled water offerings at six of the hotel’s eight bars and restaurants. He took advantage of growing customer preferences for quality over quantity. For years, inexpensive wines by the glass have been bestsellers. “Now we’re selling more and more $20 and $30 glasses,” he said, “and remember we’re in Grand Rapids.”

However, alcohol-free cocktails made the biggest difference in improving his profits. Copa verde with non-alcoholic spirits, honeydew-almond cordial, pandan and Sanbitter can be purchased at the hotel’s Spanish restaurant for $15 MDRD — at the same price as most of the other specialty cocktails on the menu.

Gentle drinks now account for approximately 15 percent of all beverage sales in hotel restaurants and bars. “It sounds like a tiny number, but 10 to 15 percent can make or break a place,” he said.

In Manhattan and parts of Brooklyn, alcohol is indispensable to running a successful restaurant business, especially given recent increases in the costs of ingredients, rent, insurance and labor, said Chase Sinzer, owner of Claud and Penny in the East Village.

“If you can sell more alcohol than the next person, you have a better chance of economic survival,” he said. “The world is a very scary place without it.”

It’s easier to plug holes in your budget by charging more for drinks. Customers have set ideas about how much menu items should cost, but there is more flexibility in how they spend on cocktails, beer and wine.

“They’ll say, ‘Is this how much I pay for a piece of chicken?'” he said. “When chicken costs 75 percent more than it used to and we can only raise the price by 25 percent, you better sell some alcohol. No one spends more on chicken than the next table, but people make different choices when it comes to alcohol.”

Not all restaurants are seeing a decline in alcohol sales. John Ragan, president of fine dining restaurants on the street Union Square Hotel Group in Fresh York found that guests are looking for lower-alcohol wines, but not drinking noticeably less.

Over the course of 18 years, he has seen drinking trends come and go. When “60 Minutes” aired a segment in 1991 suggesting that red wine was the reason why the French had a low rate of heart disease despite their high fat intake, sales of red wine soared.

The surgeon general’s report may cause some ripples, Ragan said, but is unlikely to cause a seismic shift in drinking habits. “There may be some ebbs and flows, but I think whatever your favorite couple at the table is, I don’t see it changing much,” he said.

On Twisted Soul Cookhouse & Pourin Atlanta, more customers are “pre-game” with a drink or two at home, said artistic director and owner Deborah VanTrece. More and more people order non-alcoholic cocktails. But she and her team haven’t seen a decline in alcohol sales.

That’s partly because customers are willing to spend $30 or more on specialty cocktails containing high-priced spirits, such as Beyoncé’s hard-to-find SirDavis American Whiskey.

But if the Surgeon General’s warnings gain traction and Gen Z continues to drink less, alcohol revenues could decline.

“For the most part, things are stable,” she said, “but at some point people will generally jump on the bandwagon, so I’m not saying it won’t happen.”

Pete Wells contributed reporting.

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