With the new year comes resolutions – to exercise more, adopt a more healthy lifestyle, see more concerts, and maybe participate in what’s become known as “Dry January” – in other words, to quit consuming alcohol, at least for a month.
However, particularly among the Gen Z and Millennial cohorts, reducing or even eliminating alcohol consumption entirely is already a trend – and many live music venues that rely on the income from alcohol sales are feeling it.
According to polling firm Gallup, alcohol use by those under age 35 has fallen significantly in the last two decades: 62% of that age group now say they consume alcohol at least once a month, down from 72%.
Concurrently, many states have legalized cannabis use – marijuana, and its edible derivatives, are now legal for recreational use in 21 states and the District of Columbia. For some, “Dry January” is achieved by going “California Sober” – replacing booze with weed and THC-infused gummies.
There is a societal shift underway, according to the pollsters, and the effect is, at least anecdotally, being felt in music venues – particularly in smaller clubs, where door deals are the norm and the venue generates income from bar sales.
“We’re seeing this change in consumption habits,” Sean Watterson, co-owner of the Happy Dog in Cleveland, recently told Pollstar. “People are taking edibles before they come to the show. We just legalized weed here, but it doesn’t mean people weren’t doing it already.”
Sean Lynch, president and talent booker for The Pub Station Taproom in Billings, Montana, that includes a 400-capacity room and 1,000-cap ballroom, tells Pollstar his venue has lost about 20% of its alcohol sales revenue in recent years, but isn’t sure legal cannabis is to blame.
“We have legalized marijuana in Montana, and we’ve definitely seen the edibles and smoking in general, like vaping, outside the venue,” Lynch says. “It’s more genre-
related, to a point. Age is a factor. We do country shows and we don’t see as much of an alcohol decline on those. With younger country crowds, electronic, jam bands and those kinds of things, we’ve definitely seen a large decrease in sales. That’s prompted us to reevaluate our non-alcoholic options. We have about 16 non-alcoholic options now.”
Among those are coffee drinks, seltzers, Liquid Death-branded ice teas, CBD waters, energy drinks like Red Bull and non-alcoholic beers from Athletic Brewing and others.
“It depends on the show, but there’s certain shows where the nonalcoholic outsells the alcoholic [beverages],” Lynch says.
Marc Weinstein, who opened a cannabis dispensary next door to the Amoeba music store he co-owns in Berkeley, California, discounts the notion that legal cannabis could be affecting bar sales at music venues. He recalls a time when it was common to smoke inside venues during shows, with music fans passing joints around to strangers and vaping commonplace.
“Concerts were the only place you could smoke pot and not be bothered!” he says, chuckling.
Currently, it’s illegal to sell cannabis products in bars or music venues and that’s unlikely to change. Weinstein notes he had to open his dispensary in a separate storefront from Amoeba because of California laws.
Even as young people consume less alcohol, the popularity of craft beer and cocktails is on the rise, as are zero-alcohol options that leave old-school “near beer” in the dust.
Zero-alcohol products, as opposed to so-called “non-alcoholic” beverages, are just that, thanks to brewing processes that stop fermentation before alcohol develops. The U.S. Food and Drug Administration allows beers labeled “non-alcoholic” to legally contain up to 0.5% alcohol. By comparison, a typical domestic light beer contains 3.2% alcohol.
AB InBev, the parent company of Budweiser, Stella Artois and many others, is mass-producing Budweiser Zero and Stella Artois Liberte brands that can legally call themselves “zero-alcohol” beers and have seen sales skyrocket. These options could help fill the gap if the trend continues, as CBS News cites a Nielsen IQ consumer study from December 2022 to December 2023 showing that the sale of zero-alcohol beverages has increased a whopping 24% during the last year. The sale of zero-alcohol spirits has spiked 115% in the same period.
But that’s not much help to venue proprietors like Tom DeGeorge, owner of the 400-cap Crowbar in Ybor City, Florida, who finds that not only are young people spending less on alcohol, they are spending less, period. And it’s worrisome.
“We opened in 2006 so I’ve been here for 18 years,” DeGeorge tells Pollstar. “Right now, you have people drinking less but also spending less. Right now, we’re operating at 3% margins where prior to the pandemic, in 2019, we were operating at 20% margins. Everything’s gotten a lot tighter.”
DeGeorge says beer distributors are feeling the pinch, too, indicating a broad decrease.
“I know the big distributors are also feeling it because I’ve seen several of them make layoffs in the last year. People are drinking less and maybe they’re going out less, too.”
Like Lynch, DeGeorge is adding non-alcoholic options to his bar program at Crowbar to help close the revenue gap, but those sales aren’t enough to fill it. Unlike Montana and California, cannabis has been legalized only for medicinal use in Florida.
Weinstein doesn’t think it’s really a factor, whether legal or not.
“I think for most people [marijuana and alcohol] are still basically mutually exclusive,” Weinstein says. “People either like pot or they like alcohol. Sometimes they like both. But I don’t think that really changes much with consumption. I don’t think they decide to start using pot because it’s legal, and I don’t think a lot of people consider it a substitute for alcohol if they like alcohol.”
The trend of lighter alcohol sales amidst what’s been a difficult economic environment, which saw inflation hit 8% in 2022, but thankfully dropped in 2023 to roughly 3.1%, could very well mean a smaller revenue stream from a crucial source. Alcohol sales often make up the majority of a venue’s overall revenue. If that dries up, many venues could find themselves up in smoke.