Pros and Cons: Should Your Fast Casual Restaurant Offer Adult Beverages?

By Technomic's Darren Tristano, Foodable Industry Expert

For fast casual operators hoping to enhance dinner business, adult beverages can mean incremental sales and a point of differentiation in a slow-growth, highly competitive environment. But the truth is, serving alcohol is a complicated business.

Alcohol regulations on everything from the age of employees handling the product to the ways in which it can be promoted vary from state to state and sometimes from one county to the next, presenting unique challenges for multi-unit operators. What’s more, it must be purchased from alcohol wholesalers and distributors, adding another group of vendors to the mix. And licenses to serve spirits, wine and beer are often in limited supply, not to mention expensive.

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Liability issues abound; employees selling adult beverages must be trained in responsible service, and every employee must be vigilant about everything from fake IDs to signs of intoxication. Alcohol service also requires additional equipment, ranging from refrigeration to tap systems. 

Does that mean it’s not worth it? There’s no hard and fast answer. Chipotle offers bottled beer, margaritas and wine, but they account for 5% of sales at best. Rather, the offering solidifies the chain’s position as a cut above fast food, and also adds a “wow” factor when guests see the most popular drink in the nation listed on the menu — and when they realize they won’t have to tip the bartender.

In fact, more than half of leading fast casual chains offer beer, wine, spirits or a combination of the three, according to Technomic’s Top 150 Fast-Casual Chain Restaurants Report, which will be updated in May. By offering adult beverages, these operators are competing for that middle ground of customers looking for something slightly more upscale than quick service, but faster and more convenient than full service. Value-conscious consumers who would normally go to full-service concepts for an adult beverage can be attracted to the convenience and lower prices offered at fast casual restaurants.

For those able to nail down the details, the rewards may be sweet. In a survey fielded in the fourth quarter as part of Technomic’s Consumer Brand Metrics program, guests who consumed an adult beverage on their most recent restaurant visit expressed greater satisfaction with their visit than those who did not consume alcohol. In addition, 42% of adult-beverage consumers strongly agreed that they would return to the restaurant in the near future—a slight edge over the 39% of consumers who didn’t purchase an adult beverage who said the same.

As with any other new offering, operators need to make sure adding adult beverages provides benefits that outweigh the investment.