ALBANY — Restaurants and taverns are expanding their seating and their hours as pandemic restrictions continue to ease, but many New Yorkers are continuing to drink at home.
Sales at beer and wine and liquor stores across New York jumped during the first year of the pandemic and plummeted by even greater percentages at sit-down establishments. The two may be balancing each other out: Industry figures show only small changes in overall sales from year to year.
Several local alcohol retailers told The Gazette this past week that their sales have remained strong even as the COVID-19 crisis that fueled their sales boom subsided.
Restaurant owners, meanwhile, learned that one of the lifelines the state extended to them during the worst of the pandemic — permission to sell alcohol to go — would be revoked Thursday, ahead of schedule and with only one day’s notice.
A group of Capital Region restaurateurs and craft beverage producers gathered Thursday at Yankee Distillers in Clifton Park to urge the state Legislature to renew that privilege.
Scott Wexler, executive director of the Empire State Restaurant & Tavern Association, said the trends are not favorable.
“During the pandemic, restaurants and bars lost almost 60% of their liquor sales while liquor stores saw a 39% increase in sales,” he said. “Since many observers believe the pandemic didn’t cause change [but] accelerated it, we’re unsure what share of those lost sales we’ll recapture and what share the liquor stores have stolen from us.”
On-premise alcohol consumption (at a restaurant, tavern or other commercial establishment) was limited or even halted in many places during the pandemic, leaving off-premise consumption (at a private residence or public space) as the alternative.
National sales figures compiled by the industries indicate slightly less beer, slightly more distilled spirits and slightly more wine was sold in 2020 than in 2019.
New York state data on taxable sales are organized by type of seller, not type of goods sold. So it doesn’t indicate how much more beer and hard seltzer supermarkets sold or how many fewer cocktails and shots restaurants sold in 2020 because alcohol is a small component of their overall sales.
But most sales at beer stores and wine and liquor stores are alcohol, so data on their taxable sales is more clear-cut.
The sales tax year aligns precisely with the first year of the pandemic in New York — March 1, 2020, to Feb. 28, 2021. Taxable sales at these specialty retailers in that period were 23% higher than in the 2019-2020 sales tax year.
FULTON COUNTY
Of the seven Mohawk Valley and Capital Region counties tabulated for this story, Fulton County saw the biggest year-over-year jump in taxable sales at its beer and wine and liquor stores: 35.8%
Tracy Green, owner of Fulton Street Liquors in Gloversville, suspects that the large number of seasonal residences in Fulton County was a key factor during 2020, when many people who were able to decamp from the big cities did so.
“We had in this area a lot of people from downstate coming up and spending the rest of the year at their camps,” he said.
His sales were up substantially in 2020 over 2019 and are still exceeding 2019 this year, though not as great.
Green said, however, that it’s a new shop, opened in 2018, and a lot of the growth was from new customers walking in to have a look and walking out with a bottle or three.
“Our liquor sales went up well above the state average. It was double the state average,” he said.
And he saw the trend that the Distilled Spirits Council reported nationally: increased sales of premium products rather than economy products.
“They’re going back to the cheaper brands now,” Green said.
Marc Hughes, owner of Midtown Discount Beverage in Johnstown, said he’s never seen such sales volume in the quarter-century he’s operated the beer store.
But he’s had to work at it.
“There’s so many production problems, I just get on the phone and order as much as I can so nobody else can get it,” Hughes said.
The money has been great, even with the limited profit margin on beer, but the physical and mental stress have been significant as well — he’s cut the store’s hours to try to limit that.
External factors contribute, too. About 95% of the transactions are pleasant, but a handful of customers will pitch a fit over a missing or more expensive brand, and that wears thin quickly.
“Do you understand it’s a pandemic?” Hughes wants to say. “There’s shortages. Prices are higher.”
He hopes to find some time to relax when things return to normal.
“I guess I’ll ride out the big wave,” he said.
Schenectady County also saw a large jump in taxable sales at its beer and wine and liquor stores, state data show: The total increased from $28.3 million in 2019-2020 to $37.1 million in 2020-2021, or 30.9%.
Andrew Crounse, owner of Glenville Beverage, recalls the very start of the sales surge in March 2020.
“When the lockdown hit that Friday, it went from being a normal Friday to like Memorial Day,” he said. That continued through the rest of 2020, and continues to a lesser degree right up to the present day.
“I’m still probably up 25%, 30%,” Crounse said.
He’s finding people still wanting to drink at home instead of going out, especially the many people who invested in pools, patios and other home upgrades last year.
“Now their pattern is, instead of going out all the time they like to sit in their backyard,” Crounse said. “It kind of helps our business — it’s more off-premise now. You could go home with a six-pack or 12-pack for the price of two beers in a restaurant.”
One negative result of the pandemic? The tight labor market.
“Right now I’m having trouble getting help,” Crounse said. “I’m working more than ever now. That’s been a bit of a struggle lately.”
Everything ebbs and flows, he said, but he doesn’t expect his beer sales to fall back to prepandemic levels anytime soon.
On the larger scale, the roughly 350 Stewart’s Shops saw sales of beer jump in 2020 along with milk, eggs, ice cream and other grocery items sought by people isolating at home. Beer sales continue to increase in 2021.
“We saw a 16% jump in beer and spiked seltzer sales from 2020 to 2021,” spokeswoman Erica Komoroske said. “We anticipate continued sales growth in the beer category as we head into the busy summer season.”
PRODUCERS’ PROBLEMS
For the many local craft beverage producers, the economic impact of the pandemic has depended heavily on their primary sales channel. Those that have their own canning equipment, or have access to it through contract, have done well thanks to the increased sales of cans and bottles.
Those that relied on sales of draft beer at their taprooms, or on tap at restaurants and bars, were hit hard.
“Alternative models of getting their beer out had to be made,” said Paul Leone, executive director of the New York State Brewers Association. “Brewers with canning lines didn’t have much of a problem.”
About a dozen breweries have shut down statewide since the pandemic set in, he said, and 26 have opened. Because opening a brewery is a two-year process, there’s likely to be a dropoff in grand openings of new breweries in the near future: The ones that opened amid the pandemic already were in the process when the crisis began, and the crisis may have put a damper on plans for new breweries.
Dan Bronson, general manager of craft brewer SingleCut, said both its Clifton Park and Queens breweries have high-capacity canning systems.
“We were fortunate to be able to pivot our production to cans,” he said, and take advantage of a mini-boom in can sales in the spring of 2020.
SingleCut didn’t need to furlough anyone and actually expanded its workforce slightly in 2020.
Midway through 2021, Bronson described the outlook as optimistic but uncertain.
“It’s certainly been more stable than 2020,” he said. “Draft demand is up exponentially over 2020, but still less than 2019.”
And all is not perfect with sales of cans, either: Material and labor shortages are affecting multiple industries and the effect ripples through to SingleCut and other craft brewers.
“We actually had to hire a fixer to set us up to be able to import cans from overseas ourselves,” Bronson said.
Labels, corrugated cardboard and other material also can be hard to come by, and once they are secured there can be a wait for transport.
A truckload of kegs bound for SingleCut had been languishing for seven days in Pennsylvania when Bronson spoke to The Gazette on Tuesday — no truckers were available for pickup.
The sales increases shown in statewide data and in these individual anecdotes don’t necessarily mean that New Yorkers are drinking much more.
The sharp increase in retail sales of cans and bottles for off-premise consumption appears to be mostly offset by the decline in on-premise consumption.
Nationwide, beer sales decreased by 2.9% and sales of distilled spirits increased by 5.3% by volume in 2020 compared with 2019, according to trade groups for the respective industries. Assorted estimates are offered for wine sales in 2020 but none indicate a major change.
Wexler at the Restaurant and Tavern Association said his members have a long road back.
He said via email: “Since the Assembly and Senate failed to pass legislation allowing restaurants to sell cocktails to go and the state carved most restaurants out of the Small Business Recovery Grant Program, we’re entering the recovery with one hand tied behind our back.”
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