You'll See A Lot More Cocktails Soon

For many food brands, it's most profitable to focus on a niche. For example, a big chain like Krispy Kreme has been successful for decades because it concentrates solely on doughnuts, and making those the best darn doughnuts out there. For smaller businesses, a narrow menu might instead be a financial necessity—if your brand is built around only selling chicken wings, then you can keep your supply list small and food costs low. But now more restaurant brands than ever are expanding into new territory by adding signature beverages to the mix.

The shift in focus comes now in part because restaurants are still trying to recoup losses from the pandemic, and selling cocktails brings in more money. According to a report from inventory management system Binwise, the average profit margin on drinks is 15% higher than on food. And FSR Magazine reports that people are less likely to take drink prices into consideration than food prices when choosing a restaurant.

For example, Justin Weathers, co-owner of Stove & Co. Restaurant Group, tells FSR that if people see a burger on a menu for $22, they might choose not to dine there in the first place. But if the food is at a more average price point, customers will come through the door and order the $15 cocktail while they're there.

The focus on drinks also creates an atmosphere where customers feel like they can stay longer (and, of course, spend more money in the process). Pinky Cole started Slutty Vegan as a ghost kitchen and food truck focused solely on plant-based foods—in those formats, customers simply order their food and leave, and because the menu is so specialized, there's not always room to upsell. But at Bar Vegan in Atlanta, people are encouraged to stay a while, drinking cocktails in an environment that still only serves plant-based foods. Cole's next idea, according to FSR Magazine, is to get even more specific in the drink space by creating a mimosa bar.

We've seen larger brands adopt this idea in the past, and it seems to be spreading to various chain restaurants. Taco Bell led the charge with its Cantina restaurants back in 2017, and since then we've seen booze-focused iterations of Burger King, Starbucks, and IHOP. As the restaurant industry continues working to increase its bottom line, an increased focus on boozy beverages might be in the cards.