#alcoholfree | KRG Hospitality

Cocktails with edible flowers and dehydrated fruit for garnishes

September 26, 2024by David Klemt David Klemt No Comments

Are “Substituters” Leading NA Growth?

Are “Substituters” Leading NA Growth?

by David Klemt

No-ABV, low-ABV, or full strength?

Revelations shared by the IWSR recently suggest that the very generation driving non-alcohol growth may also be driving traditional beverage alcohol growth.

At least, according to the IWSR, a particular generation is over-indexing in the non-alc category and “full-strength” categories such as rum, whisky, Champagne, brandy and Cognac, and RTDs.

This is because Millennials—there it is, the big reveal—appear to be “substituters.” That is, as explained by the IWSR, much of this cohort consumes alcohol on some occasions, and non-alc beverages on others.

Now, before we proceed, let me get this out of the way: No generation is a monolith. While there’s value in understanding a given generation’s behavior, it’s important to understand that we can really only do so in broad terms.

That said, broadly speaking, members of the Millennial generation appear to be driving the growth of non-alc overall. In comparison to other generations, Millennials are consuming more non-alc spirits, more non-alc beer, and more non-alc wine.

Of course, there’s another caveat I must address: Less than half of Gen Z is of legal drinking age. So, when compared to that generation, the numbers are a bit skewed.

Generally speaking, non-alc is growing across the board in the US. What was once relegated to two or three low-alc beers and barely considered “mocktails” for many, many years is now a viable category. The category has gone from an afterthought to inspiring entire alcohol-free bar concepts, and it hasn’t taken long to achieve this growth.

Numbers

When I say Millennials are consuming more non-alc than other generations, what does that mean? Is the difference subtle, or is it eyebrow raising?

Per IWSR data, it’s the latter.

Last year, 45 percent of all non-alc beer drinkers in the US were Millennials. That number has jumped to 61 percent in 2024. Change focus to non-alc spirits and Millennials make up 66 percent of overall US consumers. That number is 59 percent when we look at who’s drinking non-alc wine.

For some context, just 22 percent of non-alc beer drinkers in the US are Gen X. Take a look at legal-drinking-age Gen Z and that number shrinks to seven percent. Again, though, most of Gen Z isn’t yet LDA.

So, back to substituters. Just under half of all Millennials, according to IWSR findings, vacillate between non-alc and full-ABV. It would appear, then, that Millennials are the most interested in exploring and experimenting with non-alc beverages.

For obvious reasons, this makes it clear that operators need to do more than just toss a couple of alcohol-free beers and sugary zero-proof cocktail concoctions on their menus.

Further, and I know I’m repeating myself, operators need to ensure they deliver the same level of service and guest experience for those abstaining from alcohol as those ordering traditional adult beverages. Failing to do so can alienate guests who choose to not consume alcohol but want to visit and socialize at a bar or restaurant. Why would they return if they receive what they perceive to be a lower level of service?

IWSR’s deep dive and data make it clear that operators need to give the non-alc element of their menu due consideration. The category is growing, interesting is increasing, and it’s smart business.

To review this data yourself, follow this link.

Image: Rachel Claire via Pexels

Looking to Start, Stabilize, or Scale? Book Below to Setup a 60-Minute Result-Driven Impact Session.

Moth Margarita canned cocktails stacked on a black, wood table

January 8, 2024by David Klemt David Klemt No Comments

Can It? NA Canned Cocktail Performance

Can It? Zero-proof Canned Cocktail Performance

by David Klemt

Veylinx, a behavioral research platform trusted by some of the world’s biggest brands, has turned their attention alcohol-free canned cocktails for a recent study.

They’ve researched demand for non-alcohol before. In fact, you can find our analysis of their 2022 study here. We’ve also covered their look into the effectiveness of Super Bowl ads.

For their latest study, consumer demand for non-alcoholic canned cocktails, Veylinx showed how seriously they take research and methodology.

Conducted between November and December of 2023, the platform created a fictional canned cocktail brand, Elixir. This was done to account for brand bias.

Further, the “brand” produced two benchmark products—alcohol and alcohol-free—and four variations. These non-alcoholic variants offered four different benefits: CBD, mood boost, zero-calorie, and natural detox.

All participants were 21 or older:

21 to 25
26 to 35
36 to 45
46 to 55
56 to 65
Older than 65

Half of the study identified as male, and the other half as female. Most, 73 percent, were alcohol drinkers, while 27 percent were not.

For the study, Veylinx had each participant, 410 in total, bid on the six Elixir products with their own money. The bidding took place in randomized, sequential auction.

After the auction, the participants completed a questionnaire. The following is a sample question:

“What would be the main reasons for you NOT to buy non-alcoholic beverages? Please select all that apply.”

Possible answers to that question were: Limited availability, Limited variety, Flavor, and/or Other.

With methodology explained, let’s check out the results.

Canned Cocktails by the Numbers

While demand for non-alcohol canned cocktails appears to be growing, their counterparts remain most popular.

Per Veylinx, demand for Elixir’s alcoholic canned cocktails surged by 20 percent in their study. In comparison, average demand for the fictional brand’s non-alcoholic benchmark and variants canned cocktails increased by four percent.

Further, the full-proof and zero-proof CBD products garnered the most interest. The alcoholic version saw an uplift of seven percent, and CBD saw a three-percent uplift. Consumers showed the least interest in non-alcohol, zero-calorie variants.

Comparing 2022 to 2023, demand for “standard” alcohol-free canned cocktails is up 14 percent. This is followed by the CBD variant with four-percent growth in consumer demand. Next, non-alcoholic canned cocktails with a “mood-boosting” benefit, which grew by two percent. Natural detox saw an increase in demand of just one percent. And consumer demand for zero-calorie, zero-alcohol canned cocktails fell by one percent.

So, today’s consumer, at least according to research conducted by Veylinx, is most interested in alcoholic canned cocktails. Still, there’s growing interest in alcohol-free canned cocktails, something for operators to keep in mind.

Changes in Behavior

Speaking of interest in zero-proof, Veylinx uncovered some other interesting information.

In 2022, around 56 percent of consumers expressed interest reducing their alcohol consumption. That number fell by 18 percent to 38 percent in 2023. That’s still a significant percentage of consumers looking to make a big change in their lives.

Forty-one percent of consumers aged 21 to 35 are trying to reduce their alcohol intake. That number drops slightly to 36 percent for those aged 36 and older.

Veylinx also found that half of consumers would drink less alcohol if one simple change took place. All it would take is better-quality, non-alcohol versions at better prices to hit the market.

In fact, per Veylinx, consumers cited flavor and price as the two top influences on their decision to consume zero-proof canned cocktails. So far, energy drinks are the go-to for most consumers trying to drink less alcohol.

If they’re smart, brands with an interest in producing successful non-alcohol canned cocktails will work to improve costs, flavors, and health benefits, if this Veylinx study is taken to heart.

To review this study in its entirety yourself, click here. The press release for the study is below.

The Year of Canned Cocktails: Consumer Demand Increases for Non-Alcholic and Alcoholic Variations

NEW YORK, December 20, 2023 — According to a new, year-over-year study from behavioral research platform Veylinx, consumer demand is increasing for both non-alcoholic and alcoholic canned cocktails. Using Veylinx’s proprietary methodology—which measures actual demand rather than intent— the study found that demand for non-alcoholic canned cocktails grew by 4%, while demand for alcoholic canned cocktails surged by 20% over last year.

While interest remains strong for non-alcoholic alternatives, the percentage of people trying to reduce their alcohol consumption fell by 18%, to 38%. This decline from 2022 could lead to lower participation in abstinence events like Dry January.

Half of respondents claimed they would drink less alcohol if better non-alcoholic alternatives were available, showing opportunity for yet more innovation in the beverage sector. Those looking to reduce their alcohol consumption are 50% more interested in non-alcoholic cocktails.

In 2022, “Never tried before,” was the top reason consumers gave for not buying canned non-alcoholic beverages. That is no longer the case in 2023, suggesting that non-alcoholic canned cocktails increased their market penetration over the last year. Flavor and price are now the primary reasons people don’t buy non-alcoholic cocktails.

“Even with fewer people trying to reduce their alcohol consumption, demand for non-alcoholic canned cocktails continues to grow,” said Veylinx founder and CEO Anouar El Haji. “Drinkers and non-drinkers alike are receptive to ready-to-drink alternatives that are better for their health and wallets.”

The study also measured demand for non-alcoholic cocktails enhanced with functional benefits like mood boosters, detoxifiers and CBD. Demand for the standard non-alcoholic version increased 14% from last year, while the enhanced variations increased only slightly and the zero-calorie version fell by 1%. This suggests consumers might be losing interest in what they perceive as marketing gimmicks. The CBD version saw a 4% increase in demand, remaining the most popular non-alcoholic variation.

Additional key findings:

The optimal price for non-alcoholic canned cocktails that maximizes revenue for brands is $12 for a four-pack
The brands consumers have tried the most are: 1) Mocktail Club, 2) Wild Tonic, 3) Spiritless, 4) DRY, and 5) Hella Cocktail Co
44% of people expressed support for an additional 10% tax on alcohol as a public health measure for reducing consumption
For those aiming to drink less alcohol by replacing it with other beverages, energy drinks experienced the greatest increase in popularity
Physical Health and Cost are the two most popular reasons for reducing alcohol consumption
Grocery stores are the most popular place to buy non-alcoholic canned cocktails
Flavor options have the most influence on which brand consumers choose
A lower price would convince 20% of consumers to buy more non-alcoholic cocktails

To download more detailed results from the 2023 Non-Alcoholic Canned Cocktail study or for more information about Veylinx, visit https://veylinx.com/canned-cocktails.

About the research

Unlike typical surveys where consumers are simply asked about their preferences, Veylinx uses behavioral research to reveal how much consumers will pay for a product through a real bidding process. Consumers reveal their true willingness to pay by placing sealed bids on products and then answering follow-up questions about their reasons to buy or not to buy. The research was conducted in November and December 2023 among U.S. consumers ages 21 and over. It is a follow-up to a similar study Veylinx conducted in October 2022. The 2022 study can be found at https://info.veylinx.com/non-alcoholic-cocktails

Image: Ambitious Studio* – Rick Barrett on Unsplash

Café de España drink at the Palma at the Santa Monica Proper Hotel

December 6, 2023by David Klemt David Klemt No Comments

New Alcohol-free Program Has Our Attention

New Alcohol-free Program Has Our Attention

by David Klemt

The alcohol-free Café de España cocktail at Palma Lounge inside Santa Monica Proper Hotel.

Offering guests an alternative to imbibing during the holiday season and into Dry January, the Palma’s “Conscious Consumption” menu has our attention.

Palma Lounge inside Santa Monica Proper Hotel is offering a fully realized zero-proof cocktail menu. Showing their savviness, the shrewd Proper Hospitality team launched this alcohol-free menu at the start of November.

Given the number of holiday gatherings people are expected to attend from mid-November through December 31, this is a smart move.

There are several reasons a guest may choose to abstain from drinking alcohol while at a bar, restaurant, or special event. A person may be sober; sober-curious; in need of a break from alcohol after attending a number of personal and professional events; the designated driver; or not be in the mood to drink.

At the end of the day, it doesn’t matter why a guest doesn’t want to consume alcohol, even while out at a bar. What is important is making that guest feel included and comfortable, not alienated or as though they don’t fit in.

Full Consideration

Truly, operators and their front-of-house teams should treat alcohol-free cocktails the same as their low- or full-proof counterparts. Zero-ABV beverages deserve as much as consideration as traditional cocktails. Taste, balance, mouthfeel, garnish, presentation… These drinks shouldn’t be afterthoughts.

Indeed, a great non-alcohol drink menu should be as intriguing as the standard cocktail menu. A guest abstaining from alcohol should receive the same service and experience as other guests.

If done right, with premium ingredients, these beverages can be priced in line with their boozy menu peers. As importantly, they’ll also encourage guests who order them to return to a bar or restaurant.

View this post on Instagram

A post shared by Santa Monica Proper Hotel (@santamonicaproper)

What really got our attention is how deep the Palma Conscious Consumption menu runs. There aren’t just one or two zero-proof drinks. There aren’t a half-dozen. No, there are at least ten.

And in terms of careful consideration, the menu includes Lyre’s, Optimist, and Seedlip products. With this menu, Palma is positioned to weather Dry January without problem as guests will be well aware of this menu.

Any operator looking for an example of a conscientious approach to no-alcohol, wellness, and a favorable guest experience should look to the team at Palma.

For the full Conscious Consumption program press release, see below.

PALMA AT SANTA MONICA PROPER HOTEL INTRODUCES ‘CONSCIOUS CONSUMPTION’ BEVERAGE PROGRAM

New Menu Features Robust Selection of No-ABV Options for Every Occasion

November 2023—Beginning November, 2023, Palma at the Santa Monica Proper Hotel introduces its new Conscious Consumption program, a selection of non-alcoholic cocktails and beverages for its wellness-focused surrounds in the heart of Los Angeles’ west side.

WHAT: Whether curbing consumption between a schedule of holiday parties, hitting reset in the new year, or monitoring day-to-day indulgence, Palma’s new Conscious Consumption menu includes nonalcoholic versions of both traditional cocktails and original creations, featuring a range of N/A spirits that are exciting as they are satisfying. Highlights include:

The Cosmo: Optimist Fresh, Lyre’s Orange Sec, cranberry, lime
Fresh 75: French Bloom Le Blanc, Optimist Fresh, lemon, agave
Café de España: Lyre’s Coffee Originale, espresso, orange blossom
TropiCali: Seedlip Spice, Lyre’s Orange Sec, Tropical Red Bull, ginger
Spritzu: French Bloom Le Blanc, Lyre’s Italian Orange, Fever Tree Club Soda, yuzu
Basil Drop: Seedlip Spice, Lyre’s Orange Sec, lemon, basil
No-Jito: Lyre’s Dark Cane, mint, orange, lime, Fever Tree Club Soda
Hug on the Beach: Optimist Fresh, lemon, cucumber, ginger
Prickly Bear: Seedlip Spice, Lyre’s Orange Sec, prickly pear, grapefruit, jalapeno-ginger syrup
Gin and Juice: Lyre’s Dry London, Fever Tree Sparkling Grapefruit, lime

WHERE: Palma at the Santa Monica Proper Hotel (700 Wilshire Blvd, Santa Monica, CA 90401)

WHEN: The new menu is available beginning November 1, 2023

HOW: Palma accepts walk-ins for both dining and the bar, to make a reservation, visit here.

About Santa Monica Proper Hotel

Santa Monica Proper is an architectural wonder set amid two contrasting buildings — a Spanish Colonial Revival landmark and a sleek contemporary new build, connected by an artfully crafted bridge — where the creative vision of Kelly Wearstler’s design seamlessly blends past and present. The property is anchored by Palma, an all-day enclave for craft cocktails and eclectic bites, along with a rooftop destination, Calabra. The latter features vibrant Mediterranean and California coastal cuisine and a robust wine program, with hubs for both indoor and outdoor gathering, complete with sweeping ocean and cityscape views. Lastly, the Siete event space (formerly Onda) offers a unique setting for high profile collaborations, residencies and events, complete with furnishings by Kelly Wearstler.

About Proper Hospitality

Proper Hospitality designs, brands, and operates high-end lifestyle hospitality experiences under the Proper, Hotel June and The Collective brands. Each property is a distinct reflection of the vibrant community surrounding it, while sharing a common belief in uncommon luxury, convenience of location, and world-class amenities provided by locally vetted innovators in art, food & beverage, fashion, music, technology and wellness. Led by the visionaries behind The Kor Group, the company currently manages Proper branded hotels in Santa Monica, Downtown Los Angeles, San Francisco and Austin, Hotel June in West Los Angeles and Malibu, and The Collective, a curation of design-driven independent hotels including Avalon Hotels in Beverly Hills and Palm Springs, Ingleside Inn in Palm Springs, Venice V Hotel in Venice Beach, The Culver Hotel in Culver City and Paia Inn in Maui. For more information and to discover the latest on anticipated openings, please visit www.properhotel.com

Image: Dylan+Jeni (image was cropped to landscape orientation for this article)

September 14, 2022by David Klemt David Klemt No Comments

3 Bar Hacks Episodes for Sober October

3 Bar Hacks Episodes for Sober October

by David Klemt

We’re just two weeks away from Sober October so here are three Bar Hacks podcast episodes to get you ready for this important month.

Over the course of 100-plus episodes we’ve spoken with a handful of non-alcohol brands. These, along with other alcohol-free brands, should be on your radar.

In fact, they deserve spots on your backbar and placement on your menus. The latest estimate is that around 40 percent of Americans don’t consume alcohol. In Canada that number is roughly 33 percent.

However, those numbers don’t paint a complete picture. Over the past few years there has been increasing interest in “sober curiosity.” In this movement, people abstain from drinking alcohol from time to time rather than abstaining permanently.

Now, we tend to associate the month of January with sobriety, either permanent or temporary. Clearly, however, October is also a month where people choose to not imbibe.

The Sober Guest Experience

The following should go without saying but let’s cover it anyway. Some sober people do, in fact, spend time in bars and nightclubs.

Just as that should go without saying, so should this: Your sober guests deserve every bit as great an experience as guests who are drinking alcohol.

Moreover, sober guests deserve a guest experience free of discomfort or isolation. In short, you should seamlessly provide the same level of service at the bar to sober guests as those who enjoy alcohol.

No, it’s not enough to menu water, sugary sodas, lemonade, and tea. Sober guests should be comfortable coming to your bar. Like guests who consume alcohol, sober guests should be able to order a drink that doesn’t make them feel different or singled out.

So, put quality non-alcohol beers on your menu. Create a number of signature zero-proof cocktails. Serve both with the same attention to detail as presentation as their full-alcohol counterparts.

“I’m a professional, I want to create,” says Paul Mathew, founder of alcohol-free aperitif brand Everleaf and Bar Hacks guest. “I want to do something I’m proud of.”

Approach your alcohol-free program the same way as Mathew, a bartender and operator himself. Be professional, be creative, and be mindful of your sober guests’ experience.

Episode 28 with Tim Rita

Lyre’s Spirits crafts alcohol-free spirits that masterfully mimic their full-proof counterparts. Host David Klemt sits down with Lyre’s brand ambassador, bartender, and buddy Tim Rita to chat about the brand. In this episode you’ll learn about one of the fastest-growing brands in one of the fastest-growing beverage categories. For the alcohol-free Mai Tai mentioned on the podcast, click here.

Listen now.

Episode 31 with Ted Fleming

Ted Fleming, entrepreneur and CEO and founder of Partake Brewing, stops by the Bar Hacks podcast to talk with host David Klemt. The two discuss the founding of Partake Brewing and the importance and growth of the non-alcohol beer category. Also, how operators can succeed with non-alc, advice for entrepreneurs, and more. Visit the Partake Brewing website to learn more. Connect with Partake on Instagram, Twitter and Facebook.

Click here to listen.

Episode 81 with Paul Mathew

Paul Mathew, bartender, bar owner, and founder of Everleaf, sits down with Bar Hacks podcast co-host David Klemt. In this fun and informative episode, Paul shares his journey through bartending and bar ownership, and his entry into the drinks business. Non-alcoholic aperitif brand Everleaf is the culmination of Paul’s many years as a conservationist botanist, knowledge of plants, and nearly 30 years in the bar business.

The Everleaf portfolio consists of three unique expressions and a new RTD line. Shortly, Everleaf will begin distribution throughout the United States, and there are plans for Canada and Australia in the future. To learn more, vist the Everleaf website and follow Everleaf on Instagram and Facebook.

Listen to this episode here.

Image: Jia Jia Shum on Unsplash

June 29, 2022by David Klemt David Klemt No Comments

This Year’s Big Trend: Moderation

This Year’s Big Trend: Moderation

by David Klemt

Beverage-top media platform Ripples is reporting 2022’s big drink trend, focusing heavily on Gen Z imbibing habits.

The unique company produces devices that make it possible to print images atop drinks. With beverages of all types as their focus, the company is a great position to study drink trends.

Interestingly, Ripples focuses primarily on Gen Z drinking habits. However, the company’s data identifies an intriguing trend that transcends a single generation.

Let’s jump in.

Zero-proof Beverage Growth

At KRG Hospitality, we appreciate numbers; we’re a data-driven agency. Well, amongst all the stats Ripples latest findings reveal, two are massive.

First, in comparison to 2019, zero-alcohol products are up 166 percent. Second, the non-alcohol category is growing four times faster than its low-ABV counterpart.

Another impressive number? Non-alcohol spirits have grown by over 113 percent since 2020.

Per Ripples, Gen Z is driving the growth in the no-alcohol space. According to the beverage-tech company, this is likely due to social media presence.

I’m sure you read articles at least from time to time about Gen Z social media habits. Those written by their older counterparts make it seem like Gen Z doesn’t understand the risks of recording their every action.

Well, it’s highly likely that much of Gen Z would rather not have their drunken shenanigans on display on every social platform.

Values Drive Purchase Decisions

Beyond risk aversion, Ripples identifies values as key to Gen Z purchase and consumption decisions.

Generally speaking, members of Gen Z value transparency and authenticity. Brands that share those values are more likely to succeed with Gen Z.

And, again, speaking broadly, smaller, independent brands are often perceived as more transparent, authentic, and responsible. Large, mainstream brands are often seen as anything but green and responsible, never mind transparent or authentic.

Ripples posits that small indies aren’t encountering daunting barriers to entry. So, small-batch, craft non-alcohol brands are apt to find Gen Z support.

Craft sodas, RTDs offering health benefits, and zero-proof cocktails in cans or bottles are flooding the market. And they’re finding success. In fact, according to Ripples, RTD sales are up 400 percent on Drizly since 2019.

The Big Trend

If you’re a listener of our Bar Hacks podcast you’ve likely heard our episodes with David Allison. If you haven’t heard them, they’re episode 46 and episode 67.

As the founder of the Valuegraphics Project, Allison isn’t a fan of focusing on demographic stereotypes. Instead, he recommends a focus on values in conjunction with demographic and psychographic data.

In part, the Valuegraphics Project approach encourages business owners and operators to identify and target their customers’ values. This is, according to Allison, far more powerful than focusing on age and sex. As important is the fact that demographics tend to divide us, and stereotypes are dangerous.

So, he and the Valuegraphics Project team probably wouldn’t like all the focus on a single generation in this article and Ripples’ findings. Well, there’s some good news and it pertains to what’s likely this year’s biggest drinking trend.

Across all generations, one drinking trend is common: Moderation. An interest in no- and low-alcohol beverages is shared among all generations.

In fact, according to Ripples, 78 percent of consumers purchasing zero-proof drinks aren’t doing so exclusively. These consumers are still buying they’re favorite full-alcohol beverages.

Takeaway

Leveraging the moderation trend is fairly simple. The growth of all zero-proof categories means operators can succeed with alcohol-free spirits, beer, and wine.

RTD cocktails—full-, low- and zero-proof—are selling very well and work in restaurants and bars.

In short, ensure you have low-ABV and zero-alcohol versions of your full-ABV drinks on your menu. Include these in a dedicated non-alcohol section.

Operators don’t need to be afraid of guests drinking more moderately. The stereotype that guests who choose zero- or low-proof drinks are bad for the bottom line simply isn’t true.

Image: Chris Curry on Unsplash