This is how COVID-19 changed the way Americans drink

If the entire wild ride that has been the spirits industry since March 2020 could be summed up in three letters, it would be RTD: ready to drink. That’s the general term for the meteorically rising category that includes spirits-based canned cocktails. Sales of RTDs grew between one and a half and three times faster than other alcohol sales between 2020 and 2021—an impressive feat, considering how much more Americans drank in general during the pandemic. 

The National Institute on Alcohol Abuse and Alcoholism reported a 39% increase in alcohol consumption, measured in drinks per month, between February 2020 and November 2020, with a 30% spike in binge drinking. And although our drinking has slowed a bit since the early COVID-19 days, some of the pandemic-era shifts might prove permanent. From the rise of the canned cocktail to the death of the downtown happy hour to how a cork shortage in Portugal might affect what you drink, the lingering effects of lockdown have shown up in some interesting ways.

Shortages and supply chain issues meet a higher demand for luxury 

Adil Yamin is the Michigan district manager for William Grant & Sons, which distributes a wide range of premium spirits. “Take a bottle of Glenfiddich,” he says. “There’s no other bottle like it.” The bottle’s distinctive smooth, three-sided shape, made of green glass and bearing a stylized stag on each bottle, is custom produced and requires special molds that would cost more than a million dollars to replace. Pandemic labor shortages, raw glass material shortages, shipping catastrophes, and other supply chain issues meant that Glenfiddich, like many other easily recognized alcohol brands, became increasingly difficult to source. 

The logistical difficulties of sourcing glass, then cork, then plastic, and even wood for spirits packaging left many producers scrambling during the pandemic. For Yamin and other spirits representatives, just getting a bottle into the hands of an eager consumer was a Herculean task. “For the last three years,” he says, “we’re bottling to catch up or we’re barreling to catch up for what COVID-19 did to our supply.” The increased demand for premium spirits—also known as premiumization—might continue causing problems, as distillers can’t simply open the faucet and produce more 18-year-old Scotch or 6-year-old Rye.

If they could open the taps and pour out ultra-premium spirits, there is certainly a market for them. Americans are buying distilled spirits, as compared to beer and wine, in record numbers. The Distilled Spirits Council of the United States (DISCUS) issues an annual Luxury Brand Index. From 2020 to 2021, sales luxury brands—defined as bottles costing more than $50—increased by 43%; the following year sales crept up by a modest 4%, but for the first time ever, spirits revenue oustripped beer revenue. 

For Carlos Zepeda, SVP of consumer connections, insights, and strategy at Moët Hennessy USA, the premiumization trend makes sense. “Champagne historically was associated with a very special moment,” he says, like a promotion or a wedding. During the pandemic, though, consumers had a “why not now?” mindset “through this appreciation of the small things that we all went through.” Many Americans, he says, used disposable income from federal stimulus checks to explore new luxury spirits like Veuve Clicquot. 

“From a luxury standpoint,” says Zepeda, “people really started to appreciate the small moments that were luxurious that were created at home. The big win is that there was a lot of discovery, there were a lot of new users. And it’s hard to go back once you try the good stuff.”

Along with a rise in premium spirits, drink mixers are seeing a trend toward higher quality. Brands like Dirty Sue, which makes premium olive juice for martinis, and East Imperial, which produces high-end tonic water infused with ingredients like yuzu and grapefruit, are on the rise as consumers look to perfect their home cocktails.

Drinking became more portable 

Pairing premium spirits with the RTD craze has allowed revelers to enjoy canned cocktails just about anywhere. DISCUS reported that from 2019 to 2020, sales of RTDs grew by 125.8%; from 2020 to 2021, sales increased by another 42%. By 2022, canned cocktails accounted for 12% of all U.S. alcoholic beverage purchases, more than all wine purchases. To-go drinks during the pandemic helped bars stay afloat. Many bars developed their own signature cocktails and lobbied for updated liquor laws to allow for carryout drinks. These updated liquor laws also included social districts in many cities, where people can gather outside and carry alcoholic beverages within a designated area. In 2022, Michigan legislators opted to make the social district allowances permanent, and other states like Minnesota and North Carolina have enacted new laws allowing for social districts. 

Brandon Lieb is the VP of marketing for Spirits of Gallo, which holds a diverse portfolio of lower-alcohol spirits, including another trending category: aperitivos. Lieb sees a shift in not just what we drink, but when we drink it. “The biggest adjustment is that the occasion has been broadened,” he says. “From a cocktail standpoint, a night out with friends or at home with friends was primarily the drinking occasion.” But now, he says, people are more likely to bring a canned cocktail out to the park or the beach for a mid-afternoon gathering, or to hang out with friends. “The lines have blurred in a way where there are occasions where portability matters,” he says.

Hence the rise of lower-alcohol drinks like the Aperol Spritz or the Negroni Sbagliato, both of which became popular on social media in recent years. “If you’re going to a patio and drinking in the afternoon,” says Lieb, “there is an opportunity to better manage your alcohol intake throughout the course of the day” with a lower-proof drink. It’s a concept sometimes called “damp drinking”: conscious consumption of just one or two drinks, or drinks with less alcohol, to foster wellness and prolong social mingling.

It’s not that people are avoiding bars entirely since the pandemic, say industry insiders. It’s more a matter of what they’re looking for when they make it out to the bar. Julia Petriprin owns two bars in Cincinnati: Homemakers Bar and Fifty Fifty Gin Club. Since reopening post-pandemic, she’s seeing more larger groups, but also notes that they’re more interested in the creature comforts. “Since everybody got comfortable and made these home spaces,” she says, “they spent money on their homes and got them really nice.” This ultimately translated, as she sees it, to fewer nights out in general. 

Happy hour didn’t die, it just moved

Another shift that Petiprin has seen is that “people sort of migrate more to neighborhoods versus downtowns.” The data backs up her observation: A March 2023 study of the ten largest U.S. real estate markets, 52% of office space is currently unoccupied. That means far fewer happy hour customers for downtown bars. 

Happy hour isn’t dead though. It’s just moved back to the neighborhood, says T. Cole Newton, who owns two neighborhood bars in New Orleans. At his bars, Twelve Mile Limit and The Domino, he says, “people are approaching happy hour a different way that is like, ‘Hey, I’ve been working all day by myself. I need to go out and be around people. I’m gonna go to the bar in my neighborhood.’” 

The move away from downtown bars isn’t just about customers. Staff, says Newton, are also flocking away from the tourist-heavy bar districts in search of a better work-life balance. Newton also serves as president of the U.S. Bartender’s Guild, a professional organization that offers resources to members of the bar industry. “A lot of legacy businesses are having trouble hiring right now,” he says, “and I think it’s probably because they’re trying to impose those same kind of mandates on staff,” like mandatory overtime, dress codes, and longer shifts to make up for missing workers.

Since many longtime bartenders took the pandemic down time as a chance to reset their priorities, with many leaving the industry for good, a labor shortage allows the remaining bartenders to choose their employers. “There’s been a fundamental realignment in the relationship between labor and ownership, specifically in hospitality, because of how exposed hospitality workers were, and how poorly they were often treated by both management and customers during the pandemic, says Newton. “The places that are willing to treat them with a modicum of respect are doing pretty well.”

Although there is very little bar-specific data, more than one in ten restaurants never reopened after the pandemic shutdowns. About 70,000 never came back, after grappling with supply chain chaos, staff shortages, inflation, and more. The changes brought on by the pandemic may or may not be here to stay, but owners like Newton and Petiprin are willing to tough it out. It’s too early to tell which changes will last, but Petiprin has noticed one quirk in her customers that’s a direct result of our habits formed by social distancing: “Before the pandemic,” says Petiprin, “you used to just go to the bar at any place to order, and now you just see these lines forming. People will actually get a little perturbed if you don’t line up in one place.”