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How the Market for Non-alcoholic Cocktails Might Fit Your Business

The popularity of alcohol-free cocktails has grown over the last few years. Many consumers – particularly Millennial and Gen-Z — are eschewing alcohol in the pursuit of health and wellness. But that doesn't mean they are satisfied with "just water" when the drink orders are taken. If you have been keeping up with the bar trade press, you might be aware of a growing market for festive and sophisticated cocktails — sans booze. With careful planning, training, execution, and promotion, non-alcoholic cocktails can attract guests and be a profitable upsell.

There is a growing market for cocktails sans booze. With planning, training, execution, and promotion, non-alcoholic cocktails can attract guests and be a profitable upsell.

Non-alcoholic cocktails are "one of the fastest-growing consumer drink categories," says Sameer Qureshi, co-owner of Somewhere Nowhere, a restaurant, lounge and nightclub in New York City. "Having non-alcoholic drinks allows us to capture additional revenue for those out on a night that want healthy alternatives. The market is small but expected to grow significantly over the next few years if the trend continues."

While wine consumption in the U.S. is trending towards lower-alcohol wines with more delicate fruit and less oak, non-alcohol cocktails are popular both as sweet, fruit-driven drinks and more austere or herbal concoctions, says Jake D. Skinner, beverage director of the 88-year-old Tavern on the Green in New York City. "One could say sweeter beverages skew toward a younger crowd."

Here perhaps more than almost anywhere else on the beverage menu, creativity counts. Marco Amatti, chief executive officer of the restaurant consultancy Mapa Assessoria in Sao Paolo, Brazil, recommends that operators try innovating flavors "and don't try to connect with alcoholic versions. Explore colors, textures and presentations. Work hard on presentation." Cocktails made with fruits, tea and/or coffee, sparkling waters, and natural seasonings are attention-getters. "This can be an opportunity to have something really new and specific for your concept/business."

T.J. Harris, founder and operator of the MAD (Music and Dance) Bar in Pittsburgh, Pennsylvania, says he and his staff developed a shrub-based non-alcoholic menu. Cocktail shrubs combine water, fruit (and sometimes other botanicals), sugar and vinegar to create an acidic syrup that adds depth and complexity when mixed into a cocktail. "It's got a long shelf life, is easy to pour, and comes with suggested mixers if you want to modify or upsell."

A Market Uptick

The market used to be "much smaller," but over the last half decade, the uptick in sales of non-alcoholic drinks has "soared," says Matt Siegel, executive bar director for the three-Michelin-starred SingleThread in Healdsburg, Califor- nia. "The market right now is really anyone; it is wide open."

Restaurants that promote and integrate non-alcoholic cocktail options help create more inclusivity in their business, suggests Rebecca Styn, owner of Room 33 Speakeasy in Erie, Pennsylvania, and the creator of Blind Tiger Spirit-Free Cocktails. "If a patron is not drinking, upsell him by offering a non-alcoholic cocktail that's not water or soda."

Many times, non-drinkers are uneasy coming to bars and restaurants, Styn notes, and "a natural go-to is a soda or water. Adding the use of sophisticated glassware and unique garnishes also creates the feel of an actual cocktail. All of this creates a better experience for the non- drinker, and in turn ultimately increases revenues."

To the list of nondrinkers Styn adds what she calls "wellness-focused, 'sober-curious' consumers, which mainly includes Millennials and Generation-Zers." She also feels that most consumers are shifting towards natural and organic food products, "which will continue to gain popularity among the young adult population across the globe."

Cocktails minus the alcohol also lend themselves more easily to multiple sales to individual guests. Underage patrons are always an opportunity for pitching non-alcohol drinks. "Sometimes children want to feel like they're being included in what the parents are doing and," Skinner has found, "and for the most part non-alcohol cocktails can look and taste better than sodas."

"If you add non-alcoholic drinks to the menu, you may get someone who would normally order a water or a soda," says Styn. "Now, that guest is ordering a 'sophisticated' drink that can generate a 30% or more increase in revenue. Depending on the ingredients and margins, a mixologist can get creative with beverages to help create complexity while still making a profit."

There are also guests whose religion or health affects their decision not to consume alcohol. Curating a non- alcohol program that sits alongside a traditional cocktail program creates an opportunity for those guests to have a beverage that looks craftier than a glass of soda or similar to the alcoholic beverages that other people in their party or around them are drinking. They may also feel like they stand out less and are getting a better product.

"In this regard, the market for non-alcohol beverages is quite large compared to other categories," Skinner notes. "Combining a crafty, thoughtful non-alcohol program with a proven bar design and reliable menu can improve bar sales overall."

The "sober and sober-curious are still exploring all the vast options that the creators – bartenders, mixologists, distillers, brewers, etc. – are bringing to light," Styn says. 'Whether it's a non-alcohol gin or tequila that you can use to create your favorite mixed drink, or a mixer that provides a botanical element to a sober cocktail, there is definitely something for everyone – and this arena will only continue to grow."

The market, says Kristan Arnold, assistant general manager at Elgin Public House in Elgin, Illinois, includes "anyone trying to be sober, for life or even just to clean out the pipes a little. Pregnant women that aren't ready to let the cat out of the bag yet. If you know you've had enough but want to let the good times roll, guests are switching to non-alcoholics."

In addition to these, there are "a lot of cannabis users that don't drink as much," Harris explains. "We are also located in an area with a high ratio of international students, many of whom don't drink."

Best Practices

Achieving success with a non-alcohol cocktail menu includes the following practices.

Menu pairing. As with their spirited counterparts, pairing menu items with non-alcoholic cocktails is a way to effortlessly promote the concept. The same goes for creating tasting menus with non-alcohol options, another way to help integrate them into menus. This af- fords opportunities for guests to try the options without fully committing.

Marilyn Schlossbach, an Asbury, New Jersey-based restaurateur, caterer, chef and chocolatier whose properties include Langosta Lounge, The Sparrow at WCP, and Chinese Fish House, says she loves including local and seasonal ingredients to create such cocktails as a Summer Strawberry and a Blueberry Spritz. "We also do mocktail twists like Passion Fruit Daquiris."

When she was pregnant "we created our mocktail list," Schlossbach recalls. "Enjoying fun beverages with dinner appeals to many people who want something creative even when they don't want to imbibe."

John Miller, wine director at the two-Michelin- starred The Harbor House restaurant in Mendocino, California, offers non-alcoholic pairings that feature a variety of cocktails. "They all fit the mold of our menu, with each one showing its uniqueness. We source high-end Japanese drinking vinegars that have a much more mellow flavor and combine them the fruit we grow on our ranch."

Cross-utilization. Knowing what is going into your non-alcoholic cocktails is critical, since much of the time the bartender is working with more raw material than with traditional cocktails. Med Abrous, co-founder of Los Angeles, California-based Call Mom, a hospitality group that owns and operates restaurants including The Spare Room, Winsome and Genghis Cohen in Los Angeles, White Limozeen, Cross-Eyed Critters, and Poindexter in Nashville, Tennessee, and The Mountaineering Club and Poindexter in Seattle, Washington, says his staffers "cross-utilize the prep work for our cocktails with our non-alcoholic concoctions, and find they translate very easily. With so much time, effort, and attention to detail put into alcoholic beverage programs, we want the same for our nonalcoholic offerings."

Upsell. "This to me is a no-brainer," Elgin Public House's Arnold insists. "Instead of selling a soda pop for $3, which usually comes with free refills, sell the non-alcoholic options for $5-plus per ring. This firstly gets all your tickets higher, and it gives more options to those who don't drink or are being the responsible ones for the evening."

Patrons expect to pay more for a cocktail, so these are usually more profitable on a percentage basis than, say, a glass of orange juice. "Recognize, though, that they are a little more labor-intensive to make," Mark Bires, the owner of Jerry's Sandwiches in Chicago, Illinois, and a former principal of The Bires & Friedler Restaurant Group points out. "Still, a bartender can usually put one together pretty quickly."

Non-alcoholic cocktails "from the outset have had a pretty good pour cost," notes Seigel. "Only within the last few years have some really seen a major increase, as there is now a higher expectation from a non-alcoholic cocktail program which puts the onus on the operator to supply a more thoughtful – which in turn could mean a more expensive – cocktail."

There has been so much growth in the non-alcoholic sector the past five years that restaurants focusing on crafting unique and thoughtful cocktails can price them similarly to spirit-based cocktails with the amount of labor and development that goes into them, claims Miller. Looking at non-alcohol spirits, high-end teas, and other products can "bring complexities and break the mold of the 'mocktail.'"

Looking exclusively at bar revenue, non-alcoholic cocktails offer opportunities to sell cocktail-priced beverages with low cost to "people who wouldn't otherwise drink alcoholic beverages," Skinner explains. "They are both an upsell opportunity and a way to show off a pro- gram's cocktail creativity, which leads to positive word of mouth."

Control costs. The bottom line must also figure heavily in restaurateurs' deliberations. Non-alcoholic beverages "are a cash printing machine," says Skinner. "They often rely on the least-expensive in- gredients available: fruits, purees, and sodas. The cost is always cheaper than an alcoholic beverage." It takes very little effort to make a non-alcoholic program profitable, he adds, "provided the drinks taste good, have an appealing flavor profile and description, and can balance flavors without relying on sugar and acid."

According to Siegel, ensuring that a non-alcoholic cocktail program is profitable boils down to how creative a restaurateur can be with his bar program. Utilizing ingredients across cocktails "is really im- portant." Making proprietary ingredients solely to be used in your non-alcoholic program, however, "might not be the way to go if you are really focused on turning a profit."

As with the rest of the operation, the less labor used to make the drinks the better. Indeed, the bottom line is that it is less about making more profit off of a particular category of drinks and how to take advantage of a burgeoning revenue stream than figuring out how to spend less money on product and labor.

Always be selling. The beginning of a well-thought-out promotional program begins with giving the cocktail line the respect it deserves. First, they should be just as prominent on the beverage menu as the alcoholic cocktails. "Take pride in those drinks," Siegel advises. "When done right, they are just as exciting as any other cocktail on your list." Making what Siegel calls a "really thoughtful, textured, balanced, approachable and simply delicious" non-alcoholic cocktail is difficult, since there are no spirits to fall back on. "If you, as an operator, are proud of what you are putting on your list and what is coming out of your bar, then your guests will feel that."

A smart way to promote and integrate them into a concept is to put them right on the regular cocktail menu. Says Bires, "We are an Israeli restaurant, featuring a combination of juice and sodas called gazoz." They sit side by side with other drinks on the menu. At Harbor House, non-alcohol cocktails are listed in the pairing section of its menu. Highlighting them makes a lot of sense. Bires insists that "It sort of stands to reason: there is a growing demand for these, so if you have them, you will sell. Of course, any menu addition that makes your restaurant more attractive to guests will drive higher sales in the longer run."

At Tavern on the Green, non-alcohol beverages are listed on the menu alongside alcoholic beverages. "Train your staff to feel comfortable pitching it to guests who say they wouldn't like a drink with their meal," Skinner recommends. "Try to take away the taboo of non-alcohol beverages being less than cool, and act like it's a normal option that every place is offering, even if it isn't."

Suggestive selling can be a powerful sales tool. "Advertising, and having an excellent team to help suggest these products" is an effective combination, Arnold finds. "Train them on the power of suggestion." He highlights them as a drink special on Mondays, and rotates them regularly "to keep the idea fresh and fun," he says.

Bar Staff Training

Bartenders are wired to mix alcoholic drinks and often take pride in an encyclopedic knowledge of spirits and how to transform them artfully into cocktails. Depending on your concept, there might be some training required to shift bar business to include mixed non-alcoholic drinks. At most, the paradigm shift is not much different than required during the craft cocktail movement. Further extending their repertoire to non-alcoholic drinks reminds us that the best bartenders are true culinarians.

Bartenders at Langosta Lounge receive no additional training for making the non-alcoholic cocktails, Schlossbach says, "It's the same training they engage in to make any cocktail. Our mocktails have multiple ingredients that are 'reciped' like any other cocktail." Similarly, at Somewhere Nowhere not much in the way of additional training is required for bartenders. "They are either providing the guest a with a pre-prepared item," says Sa- meer Qureshi, "or giving them a mocktail for which they would go through the same training as a drink containing alcohol."

Most bartenders pursuing their career path already have a passion for "mixology, the art and science of creating cocktails with new or uncommon ingredients," says Room 33 Speakeasy's Styn. As such, coming up with interesting non-alcoholic cocktails is "just redirecting their thinking and creating new and innovative ways to replace alcohol with other natural ingredients that reframe the drink." The market has also seen a surge of no-alcohol spirits that work to mirror the flavor profiles of their spirited counterparts, "and as such can be an easy replacement to any mixed drink."

From a technical standpoint, a well-made non-alcoholic cocktail should be just as "thoughtful and technical, if not more, than any other cocktail on your menu," Single-Thread's Siegel feels, which means it takes as much skill and technique as anything else. Depending on the establishment, there may be some need for training around knowledge and care.

"If something crafty like a smoker gun or other unconventional tool or ingredient is used," Tavern on the Green's Skinner says, "the necessary staff will need to be trained to use it." He emphasizes that behind the bar, every minute a bartender spends making a drink is a minute they aren't making another drink. Simple cocktails mean that more cocktails can be made. Complicated beverages "can be a feather in your cap, but will impact your ability to produce them."

Nor must training be limited to behind the bar. Kristan Arnold recommends restaurateurs have their bar staff "do a little research and have some fun with recipes, just like with any other alcohol." Combining bartender training in identifying sales opportunities for non-alcoholic cocktails instead of usual soft drinks with finding an appropriate price point for such drinks "can maximize income from non-alcohol beverages overall," Skinner says.

Operators also need to ensure that their team actually cares about this portion of the menu. For a long time, non-alcoholic options were the last thing any operator would ever think about. This has clearly changed as sales have blossomed.

For a smart, thoughtful program, culinary knowledge beyond the bar is "a huge must," according to The Harbor House's Miller. Being able to understand cooking and infusing techniques and ingredient identification "is very important to crafting such a program."