The Texas Alcoholic Beverage Commission (TABC) recently amended the 51% rule to allow bars, wineries, breweries, and distilleries to reopen if they can provide pre-packaged food, prepared food, or a food truck to get their food revenues up to 51% of total revenues. The 51% rule has existed for decades and was created to distinguish the difference between bars and restaurants. Basically if 51% of a business’ revenue comes from alcohol sales, it is considered a bar, which also includes wineries, breweries, and distilleries that have a tasting room.
During the pandemic, Governor Abbott ordered all bars to be closed, which has been devastating to any business operating under the 51% rule. Under the order, businesses could still provide curbside pickup, but could not serve on the premises. According to a recent article in the San Antonio Express News, small alcohol producers in Texas have lost 80% of their revenue during the pandemic. Tasting rooms drive the majority of the sales for these businesses in the Texas Hill Country.
Under this rule change, bars will essentially operate as a restaurant. So look for some bars, wineries, breweries, and distilleries to re-open soon with new food choices available. Those without a commercial kitchen will have to be creative about how they sell food items to reach 51% of sales from food.
If you own or manage one of these affected business and plan to re-open, your marketing plan will need to be in place to re-engage with your customers and prospective customers. If you need help, contact us and we will put together an effective plan to get the word out about your re-opening.