The VinePair Podcast: Do Restaurants Need to Rethink Their Revenue Ratios?

Alcohol sales had long been the backbone of the hospitality industry’s revenue — until recently. Last week, The New York Times published a report on the reversed revenue stream for restaurants. In the past, financially stable restaurants relied on a sales ratio of 60 percent alcohol to 40 percent food, but, as The Times reported, changing consumer habits have upended that sweet spot. Now, restaurants take in the majority of their income from food sales as alcohol purchases slide.

After reading the article and wondering about the longstanding norm of alcohol driving the majority of restaurant sales, a listener sent in the question, “Why is this the magic ratio?”

Today on the “VinePair Podcast,” Adam, Joanna, and Zach discuss how the 60-40 ratio became the industry standard. How did restaurants become reliant on heavily marked-up alcohol sales? How might they adapt this once-dependable business model to changing lifestyles?

Zach is drinking: 2022 “The Devil is a Liar” Upsidedown Wine Grenache
Joanna is drinking: Coupette Colada at Bitter & Twisted Cocktail Parlour
Adam is drinking: The Zesty Esti

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