Do you want to take your bar to the next level?
Staying on top of industry trends is one of the best ways to adapt to market changes and get ahead of your competition.
As the dynamics in hospitality shift, acquiring that extra knowledge is key if you want to move quickly and always stay ahead of the curve.
This is why we compiled a list with some of the top bar industry trends to watch in 2020.
We’ll cover a range of topics, from menu ideas to trends in bar design and operations technology.
Ready? Let’s go.
Industry snapshot at a macro level
Before we dive into individual trends, let’s take a look at how the industry at large is doing.
Looking at the bigger picture, alcohol sales are expected to increase by 3.2% to just over $259 billion nationwide. More than half of this revenue will be generated in venues such as bars, nightclubs and restaurants.
Revenue share of at-home consumption compared with out of home consumption.
And while revenue growth will probably outpace US inflation (currently at 2%), the number of establishments is likely to go down, considering the data we have from 2003 until 2017.
Number of bars and nightclubs in the US 2003-2017
So what does this mean for the industry?
The average revenue per establishment is likely to grow. That’s great, but it will come at the expense of businesses that close down.
As fewer establishments take a bigger cut of the market, there’s a lot at stake this year – whether you’re looking to grow and expand or simply keep the doors open.
So what can you do to maximize your chances of success? A good start is to learn about the trends in the bar industry and adapt to market changes.
Let’s dive in.
Current trends in the bar industry
Now that we’ve had a look at the numbers on a macro level, it’s time to drill into the specific trends shaping the industry today.
1. Demand for healthier drinks is increasing
KPMG reports that sales of low-alcoholic wines, beers and spirits are on the rise. In addition, low-calorie hard seltzer is expected to hit $2.5 billion in revenue by 2021.
This indicates a growing preference for healthy alternatives, largely fueled by millennials looking for new and unique offerings.
So how can you take advantage of this trend? Consider building up a healthy selection of drinks like kombucha and plant-based waters (if you’re not doing this already).
Of course, make sure your bartenders are trained up and ready to offer these as healthy alternatives to soft drinks and beer.
2. A taste for local beers
In 2018, there were over 7,000 craft breweries in the US alone.
And 4,522 of these were classified as Microbreweries.
Back in 2010, this number was 620. A 7x increase in just 8 years.
Source: Brewers Association
So we’ve seen a surge in microbreweries in response to the rise of craft beer consumption.
But along with that, we’ve also seen a spike in Brewpubs and regional breweries, indicating a preference for local, authentic beers.
So if you haven’t already, look up the breweries near you and try out their products. A local selection and some good storytelling from your staff is likely to keep your customers coming back for more.
While there isn’t much official data about self-service in bars, it seems like a growing number of establishments offer self-pour beer, alcohol vending machines and cocktails on tap.
These are all innovative ways to reduce service times and achieve higher efficiency. Similar to self-checkouts in supermarkets, customers can pay and pour their own drink without lining up at the bar.
The installation may be costly but it offers several key advantages including:
- Reduced keg waste (as much as $142 saved per keg)
- Better customer experience.
- Reduced strain on overworked bartenders.
Investing in a solution like this isn’t for everyone but it’s a good choice for high-volume bars that sell lots of beer and often lose employees due to workload.
4. The rise of mocktails and zero-proof drinks
According to Mintel, orders for alcohol-free mixed drinks grew by 35% between 2016 and 2019.
So it comes as no surprise that numerous alcohol-free bars are opening doors across the country. In addition, traditional bars are also updating their menu with mocktails and other zero-proof drinks.
The margins here are particularly attractive since you can use cheaper ingredients and still charge a price close to that of a standard cocktail.
So if you’re not already serving zero-proof drinks, think about the type of crowd you want to attract and whether it makes sense to introduce them in your bar. Mocktails are especially popular with young women so it might be a good strategy for this demographic.
5. Higher demand for premium mixers
Just as coffee enthusiasts are happy to pay double or more for a brewed coffee, premium mixers with zero calories are also on the rise in the bar industry.
The high quality ingredients are valued by the market and so you can enjoy high margins on certain cocktails and mixed drinks.
So if you’re not doing this already, stock up on more expensive mixers and update your recipes to improve your bottom line.
6. Focus on sustainability
According to Diageo, almost half of consumers are willing to pay a 10% premium for goods produced and sold in a sustainable way.
But in 2020, this goes beyond using organic ingredients or avoiding single-use plastic and disposable napkins.
Many bars are now looking for environmentally responsible vendors and equipment manufacturers as a way to comply with regulations, meet market demand and play their part in building a more sustainable future.
So if you’d like to reap the benefits of this trend, think about the different ways to optimize your supply chain in line with the global move towards sustainability.
7. A comeback for classic cocktails
DrinkUp London, organizers of the London Cocktail Week, predict a resurgence of classic cocktails.
This comes at the expense of more complex and time-consuming options that slow down service and require more expertise.
So unless you specialize in cocktails, think about reducing your selection and focus on classics like Mojitos and the Old Fashioned.
This will require fewer resources on bartender training and speeds up the service so it’s a win-win for your customers and your operations.
8. A move towards operational efficiency
As employee wages go up, it’s even harder to attract and retain good servers and bartenders.
And for many bars and nightclubs, losing employees despite heavy investment in training is simply a part of the day-to-day.
So with these developments in mind and the competitive nature of the industry, we expect an even bigger push towards operational efficiency.
We already touched upon solutions like self-pouring and alcohol vending machines, but there are things you can do today that can boost your bottom line immediately.
For example, many bars double their bartenders as servers too.
And one of the keys to running a successful bar is creating and maintaining strict operating procedures that everyone must follow.
Still, the biggest shift in efficiency usually comes from technology.
9. Data and technology will play an even bigger role
Lastly, there is no denying that technology now plays a crucial role in running a successful bar.
We expect this trend to grow and specifically go into better data collection and analysis. It’s great to know your best sellers, most profitable drinks and other market information so you can make better decisions in the future.
Software like Glimpse also lets you track compliance rates within your bar, helping you catch inconsistencies, revenue loss and areas where better operational policies should be enforced.
So there you have it – our list of the top bar industry trends to watch in 2020. With that in mind, it’s time to go out and capitalize on them.
While there are no major industry shifts expected when it comes to the market at large, you need to create the best possible position for yourself in order to stay ahead of the competition.
With many establishments closing down, it’s important to differentiate yourself and acquire that extra market share. How do you do that? By keeping up with changing market demands and adapting accordingly.
The major patterns we can see involve a move towards sustainability and a general awareness of health and wellbeing across the industry.
We also expect a growing reliance on technology, data collection and analysis in order to make better decisions and achieve higher operational efficiency.
In any case, educating yourself about the market and taking action one step at a time is the first stage in streamlining your bar and making 2020 your most successful year to date.