Mike Ryan is the founder and principal of Noetica Group, a bar and beverage consultancy. Before founding Noetica, Ryan was with Kimpton Hotels & Restaurants for several years, most recently as director of bars. We caught up with him to discuss industry trends and how the pandemic continues to affect the on-premise sector.

What trends were on-premise operators seeing before/during the pandemic? 

There’s been a big shift towards health and wellness over the last few years, whether real or perceived. This is why the hard seltzer phenomenon has taken off—it’s the idea of the Vodka-Soda, but with a wide range of flavor options, eminently portable, and consistent. During the pandemic we saw bottled and canned cocktails take off somewhat, but I don’t see that being an on-premise trend with longevity.

How is the cocktails to-go phenomenon impacting the on-premise?

This is still unraveling. Some municipalities are making those changes permanent, some aren’t. I think in the long term the cocktails to-go will end up being about even, positive and negative, for restaurants.

When someone is ordering a meal at home it’s an opportunity for incremental revenue. However the margins aren’t really there, when you consider that in a restaurant the guest is renting the glassware, but for in-home consumption the vessel has to be disposable while also being robust enough to hold liquid.

What does the rise of at-home mixology means for bars and restaurants? 

I think the rise of at-home mixology, like the rise of home cooking, is a good thing. People will either try it and give up, committing to bars and restaurants for their mixed drink fix, or they’ll get good enough at it to know the basics, so they’ll appreciate quality more when they do go out.

Overall I don’t see this stopping traffic to the on-premise—people will go out or not, whether they can make a drink or not. But I do see it raising the bar for the on-premise.

What are some of the other post-pandemic issues facing the on-premise? 

Even in cities where Covid restrictions are a distant memory, I’m still seeing some hesitation for larger groups to go out. I think there’s been a realization that there’s a serious economy of scale when you’re cooking at home for 5-plus people; not to mention it’s a faster and looser environment.

Restaurants will have to up their game to lure large groups back out on a regular basis, but this is actually where scaled to-go options start to make a lot more sense. If you can package, say, 10 Margaritas in a bag or box to deliver to a party, there’s more margin to be made there. The risk of unmonitored overconsumption, minor consumption and alcohol abuse also goes up, however.

Can you share some of the beverage alcohol trends you’re seeing now, or expect to see? 

Aside from vodka, bourbon and tequila are still moving boxes in the on-premise. The sales are still dominated by familiar labels like Maker’s Mark and Bulleit.

During the pandemic we saw a swing towards comfort brands, for a few reasons. Besides the simple reaction of clinging to the known when surrounded by the unknown, when you’re buying an entire bottle in the off premise, you’d like to have an idea of what you’re getting into. Usually the on-premise is where the more expensive discovery brands can launch—someone is more likely to take a flyer on an ounce or two at a bar, rather than dive all the way into a full bottle they may not enjoy.

I’ve seen a bit of a shift back towards craft and discovery brands, but with on-premise revenue still struggling, margins even tighter, and staff harder to find and retain, it’s easier to stock items that don’t require a ton of training to sell. I think this trend will continue for a while, but the pendulum will swing back after a few months.