By Amelia Lucas | FRI, MAY 28 20217:00 AM EDT | LINK TO CNBC
To-go cocktails won’t be a pandemic fad.
Nebraska joined 14 states and the District of Columbia on Wednesday in approving measures allowing restaurants to sell cocktails to go permanently after the success of the program during the health crisis. Six other states have approved extending the temporary measure until at least 2022. At least 15 states are considering active bills to keep to-go cocktails around longer, too, although the legislation faces some opposition from the liquor store industry.
Before the pandemic, states and localities largely forbade bars and restaurants from selling cocktails to go, with a few notable exceptions, like New Orleans. But when lockdowns began last year, restrictions against in-person dining devastated the restaurant industry. Pivoting to takeout and delivery helped to recoup some lost sales, but not nearly enough. Most eateries were also still missing out on alcohol sales, which generally are the highest margin items on the menu.
New York Gov. Andrew Cuomo issued the temporary order to allow bars and restaurants to sell their cocktails to go on the same day he closed dining rooms across the state. Dozens of other states followed his lead, pushed by lobbying from the restaurant and spirits industries. As of Wednesday, 39 states and the District of Columbia allow the sale of to-go cocktails.
“The Distilled Spirits Council jumped into this very early in the pandemic because we saw it was a way we could advocate for our restaurant and bar partners,” said Lisa Hawkins, senior vice president of public affairs for the trade group. “We saw this as a very critical revenue stream at a time when they needed it most.”
Westport Cafe in Kansas City, Missouri, was one of the restaurants that turned to cocktails as a lifeline during the crisis. Before the pandemic, alcohol accounted for about 40% of its sales. Last summer, the French bistro invested in a frozen drink machine to make its own takes on craft cocktails. It also created special meal deals that included a mimosa package or a bottle of wine to help drive sales.
“It’s not the reason why we’re still here, but it helped a lot,” co-owner Nicolas Mermet said.
The cafe plans to resurrect the frozen drink machine in June as the weather heats up. Missouri’s legislature recently passed a bill to make to-go cocktails permanent, and the bill is just waiting on a signature from the governor.
“The businesses may be less reliant on it, but it will still be an important offering for them,” Hawkins said.
According to Marbet Lewis, founding partner of Spiritus Law, the pandemic helped change legislators’ minds about the idea of selling cocktails to go and restaurants’ ability to comply with alcohol laws.
“There is precedent and history that this concept isn’t the evil that everyone perceived it to be prior to the pandemic,” Lewis said. “Before the pandemic, I think there was a lot of concern about compliance.”
Lewis said that states are primarily adding more controls and parameters when they permanently allow to-go cocktails to keep restaurants from operating like liquor stores. Among states’ top concerns are preventing underage drinking and drunken driving.
So far, the biggest opposition has come from trade groups representing liquor stores. For example, Robert Mellion, executive director and general counsel of the Massachusetts Package Store Association, wrote in a Boston Herald column that altering alcohol laws would impact public safety and hurt brick-and-mortar retailers. On Wednesday, the Massachusetts Senate rejected extending the cocktails to-go program, which is set to expire on June 15.
The vast majority of states that allowed to-go cocktails during the pandemic are planning on keeping the programs around. But there are several without any active bills to support it.
“A lot of the places where we’re seeing that the executive order just expired on its own terms,” Lewis said. “It just wasn’t likely interest there, or the program didn’t result in that much profit or sales in that particular area or region for the restaurant industry to make a big push.”