How the Bar is Helping Bring Customers Back to Fast Casual

    As the pandemic altered consumer behavior, more restaurants began offering alcohol to-go. But they’ve also seen an increase in alcohol demand as consumers want to come together post-COVID.

    Dog Haus beer.
    Dog Haus
    Fourteen of the next 15 openings for Dog Haus will be as biergartens, with more than 30 beers on tap alongside cocktail offerings.

    Even if the pandemic stopped in-person dining in its tracks, it was quite the time for drinking. And restaurants raced to capitalize with to-go cocktails and drink mixes.

    Now, even as new variants muddy matters, demand for socialized drinking has made a visible comeback.

    Austin, Texas-based Hopdoddy Burger Bar, for one, is seeing full bars. Although geographic markets somewhat vary, guests are embracing communal gatherings they missed during months of COVID restrictions. It’s not a relic of a prior time—people want to come to a bar and engage in conversation with friends or a bartender or even a stranger, says Hopdoddy CEO Jeff Chandler.

    Granted, liquor, beer, and wine service has been a hallmark of Hopdoddy since day one. It’s built into the name. The fast casual was designed as a “perfect union” between burgers and beer, Chandler says. The bar is at the center of restaurants, physically and figuratively, and guests have appreciated that coming out of COVID.

    “I think one of the things that COVID has taught a lot of people is that they value people,” Chandler says. “They value communal interactions, and I think we have seen success in really embracing that and fostering that in a safe way, as people feel more and more comfortable dining out and dining in crowded restaurants.”

    The renewed social push for alcohol has also unfolded at California-based Dog Haus, which started 11 years ago with only three beers on tap and then quickly flourished as Dog Haus Biergarten. The alcohol shift carried the brand forward, and 14 of the next 15 openings will be as biergartens, with more than 30 beers on tap alongside cocktail offerings.

    “We were part of the ghost kitchen scene during the pandemic as well, which was great,” Dog Haus founding partner André Vener says. “And it's continuing to do well, but we never stopped building Biergartens.”

    And as the pandemic looms in the rearview, more and more customers are embracing the bar again.

    “A lot of people have already had their booster shots, and they're ready to catch up on what they missed out over the past 18 or 20 months now,” Vener adds.

    Cheba Hut Toasted Subs, a cannabis-themed sandwich brand, tacked on bars 15 years ago. Nowadays, it’s seen as part of Cheba Hut’s DNA, says Chief Relationship Officer Seth Larsen. It’s been a way to differentiate the sandwich brand as a restaurant that’s not a full sit-down restaurant or a place where the counter-service nature prevents guests from socializing over a cocktail or two.

    There are various benefits to that approach, Larsen says. Cheba Hut’s sandwich competitors largely don’t boast bars, and offering drinks eliminates veto votes from guests who want a drink alongside their dinner.

    Cheba Hut’s bars are also unique in the fact even the highest-volume ones can still execute sales with only a single bartender, Larsen says. Additionally, the majority of Cheba Hut’s sales come in after 2 p.m. This is an uncommon dinner daypart feat for a place selling mostly sandwiches.

    The progression of alcohol in quick service charts an evolution in consumer behavior. The typical guest might not want to commit a large period of time to go out and eat, but they still desire benefits that come with “genuine hospitality,” like alcohol, Larsen says.

    Just because food is fast no longer means it can (or should) lack in quality. People want higher quality meals at fast-casual restaurants, not just at their full-service, fine-dining competitors, Vener notes. And with elevated taste often comes adult beverage pairings.

    “I think people are turning fast-casual locations into their place to hang out for a couple hours,” Vener says. “It doesn't need to be white linen tablecloths to go have a few cocktails.”

    “Alcohol takes part of the social fabric of America,” Larsen adds. “Sitting down and grabbing a drink and talking to a bartender or a friend next to you or a stranger on the other side is part of the culture here. I definitely think that consumers want to get back to that and that's certainly what we're seeing right now.”

    Throughout COVID, Cheba Hut stayed mostly open and only laid off bartenders temporarily in the most severe of times. The silver lining of the pandemic for the brand was that average tickets rose significantly, from $13 to about $18. And tech-enabled orders grew tenfold.

    “We could have never trained our customer base to transition to digital sales that quick without an outside force like COVID,” Larsen says.

    Hopdoddy also learned convenience played a greater role in reaching guests, but the communal aspect of its bars never wavered. In the wake of COVID, other brands acted on the same inkling that beer, wine, and liquor sales could be another mechanism to drive guests in and keep them coming back, Chandler says.

    The resurgence of craft brewing and cocktails has been one contributor as guests find themselves drawn to the careful creativity of a sophisticated drink. But many states also relaxed rules that allow operators to serve packaged beverages to go. For Hopdoddy, this meant it could successfully introduce The Roadie, a half-gallon bag of Hopdoddy’s Frozen House Margarita.

    It’s an additional, compelling menu offering that plays on guests’ desires for convenience. As a “highly Instagrammable product” that travels well and stays frozen, The Roadie has all the workings to achieve widespread sales success, Chandler says.

    Throughout its off-premises alcohol pursuits, Hopdoddy recognized the need to sell in a responsible manner, ensuring it doesn’t enable underage drinking and that overconsumption doesn’t take place, either. For example, customers can only purchase Hopdoddy’s alcohol to go with food.

    “I think people are drinking more at home,” Chandler says. “They're drinking better at home. I think that they realize that more and more restaurants are serving creative offerings. And so I think they're more in tune with it.”

    Likewise, brands that stayed nimble, delivered a craveable product and took care of their people survived through the pandemic, Larsen says, adding Cheba Hut is a stronger brand having gone through the last year and a half.

    Indeed, part of Cheba Hut’s future plans in staying nimble is its own alcohol to-go play. Cheba Hut plans to pilot alcohol to-go offerings in the Albuquerque, New Mexico, market in Q4.

    Larsen acknowledges difficulties abound for restaurants that want to expand revenue with alcohol to-go because every state has different regulations. Still, Larsen is confident alcohol to go is here to stay and signature cocktails will lead the pack.

    The key is to keep things simple and offer customers something they can’t get anywhere else. Customers are more likely to purchase a special drink like a Cheba Hut Hash Can rather than buy a run of the mill beer from the same brand.

    Vener says finding the proper vessel for transportation is also vital to providing a great alcohol to go experience, while making sure customers have specific instructions on how to match a cocktail to the one they’d be receiving in stores.

    Third-party apps are already racing to keep up with the alcohol to-go demand. As of September, DoorDash expanded its alcohol delivery service to 20 new states, the District of Columbia, Canada and Australia.

    “It has legs, and I think it's here to stay,” Larsen says. “I know a lot of states are continuously fighting for it. I think restaurants have proven that they can do it responsibly and successfully.”

    Chandler reiterates this statement. At Hopdoddy, liquor sales grew from around 10 to 13 percent throughout the pandemic. Off-premises still captures around 30 percent of business, and orders with alcohol take up roughly 13 percent of off-premises orders.

    Before the pandemic, customers likely would not have thought to order an alcoholic beverage to go, but now it can be a natural extension of a brand they frequent. In order to succeed, though, companies need to stay on brand, tailor to travel and focus on who their consumers are.

    “More people are indulging today than ever before,” Chandler says. “I think the brands that offer an indulgent, high quality product that's affordable are going to win.”