Austin alcohol sales drop for third straight year, data shows

Every day, Bridget Dunlap steps outside her Rainey Street bar hoping to feel an energy in the air that says business might finally pick up again. For the past few years, construction crews have mostly taken the place of bachelorette parties and swarms of revelers as several new high rises have gone up.

Alcohol sales at Clive Bar, which Dunlap opened in 2009, have dropped 90% since peaking in 2022.

“We’ve been self-funding for three years,” she said. “We’re lucky to still have this.”

Clive Bar isn’t the only Austin watering hole struggling to make ends meet. 

Bars across the city, including those in restaurants, hotels and entertainment venues, have collectively experienced a decline in sales every year since 2022, according to an American-Statesman analysis of alcohol tax receipts that businesses must report each month.

The decline is remarkable because, absent a dramatic drop during the pandemic, alcohol sales in Austin had increased steadily every year between 2007 – the earliest year for which data was available – and 2022. 

The trend is mirrored at the statewide level, the Statesman analysis found.

There’s no single explanation, according to industry experts. But some of the biggest contributing factors are affordability concerns, the coming of age of a generation that doesn’t drink as much and national health trends.

For many consumers trying to rein in their spending, alcohol is often the first thing to go.

“Consumers are really cash-strapped right now, especially younger consumers,” said Kelsey Erickson Streufert, chief spokesperson for the Texas Restaurant Association. “Eliminating alcohol from your purchase from your evening out is a really easy way to bring down your costs and still enjoy a night out or a night at a restaurant.”

Meanwhile, the cost for businesses to buy alcohol has increased in part due to the tariffs President Trump imposed on imported goods last spring. The tariffs apply to specialized alcohol, like imported wines from France or Italy, but also imported ingredients that Texas businesses rely on to make their own alcohol. 

“Aside from tariffs, all food and beverage is costing restaurants more right now,” Streufert said. “That means that all of their costs are going up, and so as a result, the product is more expensive for restaurants and consumers to buy, as well.”

Streufert said that a nice beverage is still an important part of the going out experience, people are just starting to choose more non-alcoholic options. She said things like Kombucha, THC drinks, teas and coffees are becoming more popular. 

“While this is concerning data, it also really highlights an opportunity for restaurants to lean into what consumers are looking for and provide alternatives,” Streufert said. 

Zoomers, a cohort born between 1997 and 2012, started to hit the legal drinking age in 2018. But they are far less likely to spend their 21st birthdays consuming alcohol at a bar.

A 2023 Gallup poll found that today’s young people are more likely to be teetotalers than those polled in the early 2000s. 

In a poll conducted from 2001 to 2003, 72% of respondents said they drank alcohol. That’s compared to 62% in the most recent poll.

“We have seen drinking trending down for young adults over the last decade, but this trend has really accelerated with Gen Z,” said Danielle Parrish, a Steve Hicks Professor of Addiction, Recovery and Substance Abuse Services at the University of Texas at Austin.

Parrish said there isn’t much research on the topic, but she cited several factors that could explain the phenomenon: Gen Z is cash-strapped while also being more health conscious and aware of alcohol’s impact on mental and physical wellbeing. They also socialize differently, desiring more meaningful and intentional in-person interactions because they have so many online connections.

“They’re being more mindful about having an experience that leaves them better off than when they came,” Parrish said. 

While younger people are more likely to be health conscious, there has been a general trend towards healthier living across all ages in the U.S.. 

Health authorities also have recently issued revised guidance on alcohol consumption.

In 2021, the American Heart Association busted the myth that a glass of red wine a night is good for heart health. Two years later, the World Health Association put out a statement titled “No level of alcohol consumption is safe for our health.” 

In addition, a 2024 KFF health tracking poll found around 12% of Americans have taken GLP-1s, a weight loss medication that is being considered for its potential to curb alcohol addiction, according to the National Institute of Alcohol Abuse and Alcoholism.

On top of these headwinds, Clive Bar has grappled with three years of constant construction in the Rainey Street District and all the accompanying nuisances: road closure, debris and limited parking.

“It was a war zone down here,” Dunlap said. “There was no attraction to come down here at all.”

Even as construction winds down on major projects, Dunlap says parking remains a problem There is limited space on the streets and only one pay-to-park lot that charges up to $60. Some new residential parking garages are available but charge by the hour. 

“That’s hard, too, to try to rise from these ashes and then have the parking be so hard,” Dunlap said. 

Dunlap, whose eponymous company Dunlap ATX owns several other bars, has already been forced to close three other Rainey Street businesses — one in 2014, one in 2018 and another in 2022. 

Clive is now the longest-standing bar in the district.

Dunlap and her husband, Chris Parker, reminisced about the days when the streets were swarming with people starting on Thursday afternoons. 

“I’m not gonna say it was Mardi Gras, but it had that feel to it,” said Parker, who is a managing partner at Dunlap ATX. 

Parker said they are trying to adjust to the times so they can stay afloat. 

Clive has started selling coffee drinks and mocktails. They try to offer more live music events. When the Statesman arrived at Clive on a recent weekday, Dunlap, Parker and the general manager were hanging Christmas lights to create an inviting, festive mood. 

“It’s super survival-of-the-fittest right now, survival of those who will hang Christmas lights,” Dunlap said. “The good thing about us is we aren’t scared to do that.”