Foodservice Alcohol Trends: Incl Impact of COVID-19 - US - October 2020
Overview
 
What you need to know
Foodservice alcohol sales fell significantly in 2020, while retail alcohol sales skyrocketed as a result of the COVID-19 crisis and subsequent recession. Foodservice alcohol sales face a long road to recovery as many consumers are still not comfortable drinking and dining indoors in the latter portion of 2020, and the recession results in further discretionary spending cuts. To recover alcohol sales, operators must focus on alcohol takeout and delivery where available, budget-friendly adult beverage options and innovations such as alcohol subscription programs, clubs and virtual engagements.

Key issues covered in this Report
●	The impact of COVID-19 on consumer behavior and the foodservice alcohol market.
●	The recessionary impact on foodservice alcohol sales.
●	Consumer interest in and opportunities for alcohol takeout and delivery.
●	Innovative ways for operators to recoup alcohol sales, including subscription and virtual programs.

Definition
This Report covers consumer attitudes and trends relating to all alcoholic beverages consumed from any foodservice location (eg bars, restaurants, nightclubs, sport arenas). While retail alcohol data is cited in this Report, retail alcohol (ie alcohol purchased from a grocery store, mass merchandiser, liquor store) is not a focus of this Report. For more information on alcohol from a retail perspective, please look to Mintel’s Drink Report library.

This Report builds upon the previous year’s Report (see On-premise Alcohol Trends – US, October 2019). Due to COVID-19 implications, this year’s Report is renamed to Foodservice Alcohol Trends: Incl Impact of COVID-19 to better reflect the current foodservice alcohol market, which spans on-premise, takeout and delivery alcoholic beverage orders.

For the purposes of this Report, the market size covers alcohol sales from restaurants, bars/ pubs, clubs and other entertainment venues, concessions.

The following terms are used throughout the Report:

On premise: Refers to any alcoholic beverage consumed at a restaurant or bar, whether indoors or outdoors.

Off premise: Refers to any alcoholic beverage purchased from a restaurant or bar for off-site consumption, including for takeout/pickup, drive-thru or delivery service.

Retail: Refers to any alcoholic beverage purchased from stores (ie grocery store, mass merchandiser, liquor store) or for delivery (not from restaurants/bars) for at-home consumption.

Foodservice: Refers to any alcoholic beverage purchased from a restaurant or bar, whether it is for on-premise or off-premise consumption.

Third-party delivery company: Refers to any company that delivers meals from a restaurant to the consumer or enables pickup through online or mobile app ordering. These companies typically partner with restaurants and provide a platform (eg website, app) from which consumers can order food. Once the consumer orders food online, it is delivered by a contracted courier or can be picked up by the customer. Examples of these companies include Grubhub, Uber Eats, Postmates, Caviar, DoorDash, Ritual and others.

COVID-19: Foodservice alcohol context
The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April, remaining in place through May, and in some cases June. During this time, referred to as lockdown, restaurants and bars across the nation closed or shifted to remote operations. Many states quickly adopted laws temporarily allowing the sale of adult beverages for takeout and/or delivery.

During re-emergence, all 50 states have relaxed stay-at-home orders and allowed restaurants and bars to operate with varying levels of social distancing measures and capacity restrictions in place, although some major markets kept bar service closed. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans, such as reversing dine-in capacity allowances or indoor dining allowances completely. Mintel anticipates the US will remain in a state of flux through 2021, until a vaccine is available.

Economic and other assumptions
This forecast and subsequent Report assumes that:

●	Consumer expenditure on hotels and restaurants is estimated to decline 12.8% in 2020 but rebound 8% in 2021 and continue to grow through 2025.
●	Personal disposable income will decline an estimated 0.3% in 2020 but is forecast to rise 4.3% in 2021.
●	Working age population changes are estimated to be flat (0%) in 2020 and forecast to remain relatively flat through 2025.