(upbeat music)
- [Narrator] As bars and restaurants emptied,
and parts of the world sheltered in place,
the way we drink began to transform.
Drinking has become not only a virtual activity
for friends to stay connected,
but a sense of comfort for many.
Even celebrities are finding creative ways
to engage in their passion on social media
by either making or talking about their favorite drinks,
like Ina Garten. - Delicious.
- Stanley Tucci. - That's good.
- [Narrator] Or Carmelo Anthony and Jimmy Butler.
- What's your favorite wine since you know mine?
What's your one? - My one?
- Your one, your one, your one?
- Damn.
- And with that transformation, the alcohol industry
has had to follow suit.
You may have seen some the headlines about how
alcohol consumption is up and sales are at an all-time high.
But up until January 2020 drinking culture was already
in the midst of a different kind of change.
Late last year you wrote a article about how little
people are drinking.
- (laughs) Yeah.
- How has that changed?
- Last year the biggest trends in drinking were
these canned cocktails that had like 5% alcohol,
100 calories.
These beers that were like 4% alcohol, and they were like,
"you can drink these when you're kayaking or hiking."
And they're like "wellness."
And now it's like, oh, jk, all everybody wants to do
is sit at home and drink boxed wine, and Natty Light,
and Busch Beer.
So obviously the biggest shift in the way we consume
is online orders.
Online alcohol sales were up 243% in the third week of March
which is kinda when everyone was like, "All right,
we're gonna be here for a couple of weeks, maybe months,
I don't know."
- [Narrator] A lot of these online sales are attributed
to apps like Minibar.
So I talked to their CEO Lindsey Andrews
to see how they're doing.
- We've seen new buyers are up almost 10x.
Sales are almost 3x.
And then customers are also much stickier,
like they're repeating faster because they aren't splitting
their spend between at home consumption, bars,
and restaurants, it's 100% at home.
So they've shifted all of their spend,
so they're buying more frequently as well.
We've also seen an uptick, not a huge one,
but in our average order size.
So people are placing bigger orders
as opposed to smaller ones.
The vast majority of our business
is from local liquor stores,
mainly mom and pop liquor stores in your neighborhood.
We launched in New York City where it's illegal to own
more than one liquor store, so they're basically
all mom and pop liquor stores.
So that allows us to serve 90% plus of the US population.
I mean, I think alcohol still, even though
I've been doing this for I think seven years now,
it's been slow to shift online.
So I truly believe this is the catalyst,
and I think people's shopping behavior
is going to remain online.
It's not like a one time blip.
- [Narrator] On-premise and off-premise are
the two subcategories of how alcohol is purchased.
On-premise refers to the bars, restaurants,
and tasting rooms.
And off-premise refers to retail, so grocery stores
and liquor stores.
The pandemic has shifted basically everyone to off-premise,
which explains the increase in online sales.
The downside is that it has really affected
independent producers of alcohol like wineries.
- We're seeing this crazy spike in retail sales.
And yet a lot of independent producers of wine
and beer and spirits aren't seeing the benefits of that.
97% of US wineries are estimated to experience
a revenue loss of between 36 and 66% this year.
So it's not going well for them.
Online sales have represented, according to one
of my sources, the Silicon Valley Bank, only 3%
of small wineries' revenue in recent years.
That has to change now.
- [Narrator] As for the subcategories of wine,
the sake industry has seen a particularly devastating hit.
Monica Samuels is one of the country's
leading sake importers.
- Sake drinking is all about community.
So without gatherings and festivals and all
of this seasonal tourism.
February, March is the end of brewing season,
and so there's a lot of celebrations
around fresh pressed sake.
With all of that canceled, it felt very kind of bleak.
And I think that no matter what happens,
people will be spending more time at home.
And people will be doing more things digitally.
- [Narrator] To alleviate that bleakness,
Monica and her friends organized a virtual version
of hanami, the Japanese tradition of drinking sake
under cherry blossom trees.
That turned into a weekly onomikai,
which is a Japanese term for a virtual happy hour.
I joined Monica to experience this firsthand.
- That's right! - Cheers.
- Cheers everyone!
- Yuna brought this bottle, I should not be drinking it.
It's for her. - Hello.
- What's drinking looking like for you guys?
Is it a bottle a week, a bottle a couple of days?
- A week? - A bottle a week.
- A week. - That's cute. Real cute.
- That is love, I love that.
- That is optimistic, I love it.
- Wow. - Did someone
get in trouble? (group laughing)
- How has it been doing this virtually?
- Honestly, I think it's great,
'cause we're in the comfort of your own home.
If I drink too much I can just sleep on my couch.
(group laughing drowns out speaker)
- You can pee whenever you want.
There's no line for the bathroom.
- There's zero line.
- We think it is gonna affect obviously the future.
I think this is still gonna be an option
down the line obviously.
- [Narrator] And that's been the sentiment
all around the world.
The future is unclear, but as we all know
without bars and restaurants the social aspect
of drinking can get pretty boring.
That's why virtual happy hours and video chats
have been such a saving grace.
- I think drinking is so social.
Obviously we're told that all the time.
It's a nice way to have an excuse to catch up with friends.
Like, "Hey, let's have a virtual happy hour."
We're kind of putting on this facade of normalcy
even though everything is like super up in the air.
- [Narrator] If you have a favorite bar though,
nothing can replace the energy of that space.
Justin McManus is the owner of Peter McManus Cafe,
an Irish-American institution in New York City since 1911.
- Drinking culture's not about the drinks,
it's about the socialization.
I say to my staff all the time, if a guest comes in
and orders a beer, they're not here for the beer.
They're paying more for the beer than they would at home.
And the beer tastes the same here as it does
out of their bodega, in their house,
or out of the 10,000 other bars and restaurants
in New York that they can get it.
So why do they come here?
They come here for you, they know the bartender.
They come here for the experience.
The social aspect of seeing everybody else.
And all of that great charm that we provide
as our staff does, that we can be that little bit
of an escape or that very friendly confine.
- [Narrator] So if you can't go to the bar
but you can interact with friends online,
how do you recreate that collective experience?
Well, drinking games have stepped in to save the day.
- [All] Yay!
- [Narrator] When pubs closed down in the UK,
drinking at home just didn't cut it.
And so the pub quiz went virtual,
because if there's two things Brits love,
it's drinking and quizzes.
Jay Flynn started his virtual pub quiz
just for his local teammates
and it soon grew to half a million views worldwide.
So yeah, I got him to ask me a couple of questions.
- From which country is Emmental cheese usually from?
- Emmental cheese? - Yeah.
- America? - No.
Switzerland.
- All right, let me get a do-over, let me get a do-over.
Ask me another one.
- Which nuts are used in marzipan?
- Almond? - Yes.
- F***, that would've been terrible
because I love marzipan!
Once it shifted online, Pub Quiz's success
spread like wildfire.
So much so, that celebrities like Tom Holland,
Stephen Fry, and Ian McKellen have participated
in virtual pub quizzes for charity.
- What was the first production ever
by the National Theater of Great Britain?
- [Narrator] As the country ran out of hand sanitizer,
news outlets widely reported on distilleries
around the country stepping in to help out.
Alan Katz is the co-founder
of the New York Distilling Company,
a gin and rye whisky distillery in Brooklyn,
that started creating hand sanitizers
in order to meet local demand.
- We're able to procure hydrogen peroxide and glycerin
and the key element, that we like any distillery has,
is very high proof neutral grain spirit.
The methodology for producing hand sanitizer at this level
is really quite straight forward, mixing these ingredients
together in a very clean environment.
But it's a constant focus on safety.
It's still very flammable at the percentage of alcohol.
So at our scale, we've been able to produce
several thousand liters of hand sanitizer.
And our effort, so that I'm being completely honest,
is we want to sell enough to cover our costs.
The cost of procuring the other ingredients,
the cost of labor, the cost of packaging material.
And at that point, our effort is really with delight,
specifically to give it away.
And we've been primarily giving it to NYPD precincts,
FDNY, Brooklyn Housing Services, to some specific hospitals
in Brooklyn and Manhattan.
- [Narrator] Charity aside, the average consumer
seems to be diversifying their drinking options,
because, let's face it, we all miss the skill and finesse
of professional bartenders and a well made cocktail.
- People are trying new things, they have the time
to mix things up and test them out.
So we've seen a huge uptick in spirit sales
and kind of a decrease in beer sales.
- They're really bored.
And so they're looking for any kind of experience
that's not the same bottle of cabernet
and the same recipe for lasagna or whatever.
I think people should meal plan their alcohol
the same way they meal plan their food, right?
Otherwise it's gonna be so boring.
- [Narrator] And for those that are tired
of doing everything themselves, some states have relaxed
their laws to allow pickup and delivery of to-go cocktails
from bars and restaurants.
As a self-professed introvert, I kind of hope
that this rules stays.
So what will drinking culture look like from here on out?
There's no denying that the bars and restaurants
will be packed once again like they already are
in Hong Kong.
The online shift of the alcohol industry
could potentially be permanent, but hopefully
virtual happy hours will continue to exist
as an option for socializing for quite some time.
And now that drinking at home has less of a stigma,
maybe American drinking culture will feel
a little bit more European.
And I can say cheers to that.
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