Overview: Beverage directors with beer-and-wine licenses are finding inventive ways to develop distinctive cocktail programs and draw in guests despite legal restrictions. Each state creates its own license or permit classes, distinguishing among beer, wine, distilled spirits, and other restrictions that affect which products a restaurant or bar can legally serve.
The Full Story
A full liquor license that includes beer, wine, and spirits may seem like an easy choice, but it comes with its own hurdles. Liquor licenses can cost thousands more than a limited beer-and-wine license, depending on the state—and that’s if they’re even available. In some states, licenses to sell beer and wine are available year-round while new licenses that include distilled spirits are only available once per year during the designated priority application period. For some, choosing a license that only permits the sale of beer and wine may be the most practical option.
“Getting a full liquor license from scratch in Los Angeles can be a literal nightmare,” says Rebbecca Phillips, a sommelier and restaurant consultant for Sweetsalt in the city’s Toluca Lake neighborhood. “And even if you find a space that already has one, it adds another layer to your operation—more inventory, ordering, training, and labor.” The restaurant opted for California’s Type 41 beer-and-wine license, which allows the sale of beer and wine granted substantial meals are available and sold. Availability of full liquor licenses can also be an obstacle. Many states, including California, Florida, New York, and New Jersey, limit the number available.
When a limited license makes sense, whether chosen intentionally or out of necessity, beer-and-wine licenses can still shape distinctive beverage programs that appeal to guests. At Lutra Cafe and Bakery, a brunch restaurant in Durham, North Carolina, the bar program focuses on lighter beverages that complement “our menu and style of dining,” says Chris McLaurin, the chef and owner. “I typically drink lower-ABV options myself, and when I was coming up with menus for Lutra, I kept writing lists that were just beer and wine and fun mixed drinks using them.” North Carolina offers separate on-premise permits for malt beverages, unfortified wine, and fortified wine. Restaurants holding only beer and unfortified-wine permits cannot serve Sherry, Port, and Madeira.
Hetal Shah, along with his wife Dhruma, set out to open a restaurant in Walnut Creek, California, with an inclusive beverage program that wasn’t entirely alcohol-free but aligned with their health and mindfulness philosophy. They opened Sipeo’s, offering a menu that taps into the ongoing demand for low- and no-alcohol beverages. Low-alcohol cocktails have typically accounted for 19 to 22 percent of beverage sales, Shah says, compared with 25 to 28 percent for wine. But in August 2026, low-alcohol cocktails reached 25 percent of beverage sales, surpassing wine’s 22 percent for the first time.
New York has a 200-foot rule that prohibits on-premise sale or consumption of liquor at any bar or restaurant within 200 feet of and on the same street as a school or place of worship. The same restriction does not apply to beer-and-wine licenses or establishments serving only beer or wine, however. A-K Hada, the co-owner of Dokidoki in Brooklyn, wanted a small, neighborhood space for her Latin American-Japanese fusion restaurant and fell in love with a location that previously was a wine bar but was also near a church and school. Since the building already had a beer-and-wine license, the team decided to build that into the restaurant’s concept.
Production & Profile
Hada knew that in order for her program to be profitable, she would need to create complex cocktails in innovative ways. “Because we are unable to sell traditional, high-proof spirits, we’re forced to highlight shōchūs that are 24% ABV and under as base spirits,” Hada says. “That being said, our approach to creating a menu is the same as if we were working with gin, tequila, and whiskey.” Most states’ on-premise beer-and-wine licenses do not permit distilled spirits, but New York and California make specific exceptions for soju and shōchū as long as the product is no higher than 24% ABV.
Shōchū’s range of base ingredients and flavor profiles allows Hada to create cocktails with different characters within one single distillate category. Barley-based shōchū, for instance, can deliver the grain-driven character and body associated with whiskey in cocktails. “We make sure we are featuring a variety of styles—barley, sweet potato, awamori—without too much overlap,” says Hada. Sipeo’s uses soju in a similar way. Bar lead Vincenzo Piccione favors Kumiho, a brand that makes flavored sojus designed to emulate traditional spirits. Its juniper-forward DJN stands in for London Dry gin in a Martini, while its oak-aged WSK provides caramel and smoky notes for a Whiskey Sour and Old Fashioned.
To compete with nearby cocktail bars, Sweetsalt uses Instagram to showcase how diverse and enticing drinks can be without distilled spirits. “Plus, I get to sneakily introduce people to shōchū and vermouth, which a lot of people don’t realize pair incredibly well with food,” she says. Classic cocktails like Margaritas and Negronis offer a useful foundation for experimentation, with straightforward ratios that are easier to adapt to lower-alcohol ingredients. Sake provides another way to add texture and flavor, and, as a bonus, the cocktails offer opportunities to introduce unique sakes to guests.
Brand & Industry History
Regulatory frameworks vary significantly across regions, influencing how operators structure their beverage programs. In California, for example, Type 47 licenses, which allow the sale of beer, wine, and distilled spirits, are generally limited to one license per 2,000 residents within a given county. Meanwhile, New York imposes limitations on certain applications in areas with multiple existing liquor licenses. For Hetal Shah, the transition from an online business featuring non-alcoholic products to opening Sipeo’s reflected a shift toward low- and no-alcohol beverages aligned with a health and mindfulness philosophy. This evolution highlights how licensing restrictions can shape distinctive beverage programs that appeal to guests seeking lighter options.
What This Means
From an operations standpoint, a beer-and-wine license allows Sipeo’s to maintain a more focused inventory because they aren’t carrying multiple brands across every spirits category. “But low-ABV cocktails aren’t necessarily less expensive to make,” Shah says. “We often use multiple premium vermouths, sherries, amaros, and wine-based aperitifs in a single drink—sometimes in larger quantities than the amount of base spirit used in a traditional cocktail.” To streamline all aspects of Lutra’s beverage program, McLaurin limits offerings and leverages the restaurant’s non-alcoholic lemonade and juice menu. That approach also helps control costs. “We see a small savings in labor here since we aren’t staffing a bartender for prep and maybe a bigger savings in food cost since cross-utilizing items cuts down on waste.”
Consumer Takeaway
For operators building a beverage program without traditional spirits, the advice is to create demand rather than wait for it. “We wanted to create something new to introduce to our guests and we found that some of the low-ABV cocktails and non-alcoholic cocktails are the drivers of our beverage program in terms of sales.” In terms of profitability, low-alcohol or wine-based products can sometimes be more cost-effective than premium spirits. This margin allows her to offer complex drinks for a relatively low price. However, consumers shouldn’t automatically expect these cocktails to be cheaper. If I’m using beautiful shōchū, good vermouth, fresh juice, and other high-quality ingredients, those components aren’t inexpensive or some magical cheap cocktail.
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