By embracing challenges in innovative ways, the bar segment continues to deliver winning results.

Perhaps of all the sectors in the beverage world none is experiencing change and the inevitable challenges that come with it as much as the bar industry.

Agency, a Milwaukee-based cocktail bar, offers all its beverages with and without alcohol so every guest has the same experience. Photo courtesy of Robert CollettaAccording to a 2025 Gallup poll, nearly half of Americans are trying to drink less, a trend that’s followed the same trajectory a third year in a row.  Gallup’s 2025 Consumption Habits survey found just 54% of U.S. adults say they drink alcohol. That’s the lowest rate Gallup has recorded in nearly 90 years of tracking. It marks three straight years of decline, falling from 62% in 2023 and 58% in 2024. For the first time, a majority of Americans say drinking in moderation — one or two drinks a day — is bad for their health, according to the study. Craft breweries are especially struggling as one after another across the country have closed their doors. The situation is not any better in the wine industry, where sales declined last year, too. The U.S. wine market experienced a significant decline in 2025, with total volume dropping by 5% to an estimated 298 million 9-liter cases, according to new data from Impact Databank. This marks the fifth consecutive year of falling wine sales in the country and is the first time in two decades that annual volume has slipped below the 300-million-case mark. The value of the wine market also decreased, though at a slightly slower rate, falling by an estimated 4% over the same period. The beer, bar and wine business faces a one-two competitive punch from ready-to-drink beverages and THC-infused beverages.

But there is plenty of hope. Well, that is, for those adjusting to the times in thoughtful and interesting ways by creating spaces where drinking takes on different meanings thus welcoming a wider audience to their spaces.

In Chicago, bar industry veteran Peter Vestinos often finds inspiration in the past for his cocktail lounges, eschewing trends and leaning instead into timeless experiences. It’s an approach that has worked well for him and his partners at Footman Hospitality. Ten-year-old Sparrow celebrates Havana, Cuba, circa the 1920s, while at Bisous, it’s ’60s Paris that takes the spotlight. Newly opened Double Fun turns its attention to Southern California during the groovy ’70s.

All his lounges come from a place of intense research — from the interior design to the music and, yes, the drinks. These elements combine to create spaces that “feel transportive and transformative in that you feel a little bit different just being there,” Vestinos says.

One overarching theme Vestinos has seen recently is the reduction in over-the-top presentations and garnishes. “It seemed like things became much more focused and back to providing a quality cocktail,” he says, with consumers realizing Instagram can only take you so far. Modern classic cocktails — think the Paper Plane and Naked and Famous — have had a resurgence and are now as common as Old-Fashioneds and Cosmopolitans.

Backbar Adjustments

In addition to innovative cocktails, innovative presentation represents an important trend among many bars today. Here are two holiday-themed cocktails from Agency, a Milwaukee-based cocktail bar. Photo courtesy of Robert CollettaOverall, drink programs, and, by association, backbars, have gotten smaller. “The days of loading up your bar with 20 brands of vodka are gone,” says Vestinos. Like chefs with food, mixologists express their heritage in their cocktails. Japanese and South American ingredients continue to be popular with drinkers.

For Vestinos, the decline of beer’s popularity has affected his equipment choices and design. Both Bisous and Double Fun do not offer beer on tap. Ice continues to play an important role in cocktail making. His bars feature three types: crushed, typical cube and clear oversized cubes. “Any bar design is definitely going to have a freezer behind it,” he says.

And speaking of bar design Vestinos stresses the importance of creating spaces that are friendly to guests and bartenders. “Owners should be very concerned with how fast they can get drinks to customers,” he says, adding that ergonomic back-of-the-bar design plays a vital role in accomplishing this. Handheld POS systems can help the overall experience by contributing to speed of service and can free up valuable real estate formerly occupied by stationary sales equipment. One bar item he thinks is ripe for an upgrade: bar guns, citing their unattractive appearance and lack of integration behind the bar.

The decline in patrons’ drinking habits hasn’t gone unnoticed by Vestinos. “You absolutely have to have several options for both lower ABV and nonalcoholic drinks,” he says.

Double Fun draws inspiration from California in the 1970s. Its Brooklyn cocktail includes rye, dry vermouth, amaro and maraschino.

Milwaukee’s Agency Cocktail is an innovative hybrid cocktail lounge that fully embraces drinkers of all types. “When you come into our bar, whether you choose to partake in the consumption of alcohol, the entire menu is open to you,” says Ryan Castelaz, founder and operating service partner. “There’s no side menu or fold out at the bottom. It is one menu, one experience for every guest.”

Agency built on the work Castelaz and his team did previously at Counter, a fully nonalcoholic cocktail bar. Like at Counter, Agency features a thematic multicourse cocktail tasting menu alongside a la carte service. “What we learned at Counter was while we were a nonalcoholic cocktail bar, we actually weren’t serving the people that we were trying to serve,” he says. “The issue was people would come in and maybe that one non-drinker in the group was able to convince the three friends that drink to come. But what inevitably happened was that the three people who do drink looked at them begrudgingly all night at the fact that they were spending $14 to $16 on what they perceived as juice.”

Agency’s mission is to offer an experience that dignifies the nonalcoholic patron by making sure everybody at that table is catered to equally.

A two-sided coaster helps differentiate between customers consuming drinks made with alcohol and those not consuming alcohol. Flip up the gold side of the coaster and your drink will be nonalcoholic, while the black side means with alcohol. The beautifully prepared cocktails feature the same garnish, glass and price.

The cocktail menu, which changes every two months, embraces Agency’s overall progressive approach with ingredients from around the world, including South Africa, Thailand, the Philippines, Japan, South Korea and China. Castelaz has been impressed with the progress nonalcoholic spirits have made over the last 10 years and predicts the large spirit brands will start making their own to compete.

Located on the ground floor of the historic Dubbel Dutch Hotel, Agency makes the most of the building’s impeccable restoration with an interior design that’s equally elegant and sophisticated. Open since September 2024, Agency takes reservations but also accommodates walk-ins.

Located in Chicago’s Gold Coast neighborhood, cocktail bar Sparrow draws inspiration from Cuba circa the 1920s. This includes La Floridita, a cocktail with white rum, maraschino, lime and grapefruit.

Sports Bar Changes

Sports bars are also undergoing some fundamental changes of their own. Once a fairly predictable genre, sports bars have expanded on the definition of late, including places like DraftKings, which combines gambling with a massive 2,000-square-foot curved video screen that can show 25 games at once.

An emerging trend in the sports bar segment is the opening of establishments geared toward women. One such example is Babe’s Sports Bar in Chicago. Members of the Babe’s Sports Bar team include Margaux Lent, Ilyana Schwartz and Nora McConnell-Johnson.On a smaller scale but no less significant is the increase of sports bars geared toward women. The Economist, in fact, declared 2025 “the year of the women’s-sports bar” in the U.S. Adding to that declaration, in late 2024 Whoopi Goldberg cofounded All Women’s Sports Network (AWSN), the first global channel dedicated exclusively to highlighting women’s sports.

None of this is lost on Nora McConnell-Johnson, who opened Chicago’s Babe’s Sports Bar in September 2025.

As a life-long athlete and collegiate rugby player, McConnell-Johnson’s frustration in the lack of places to watch women’s sports motivated her to create one herself. It was while huddled with other fans on a back patio of a bar in 2021 watching game four of the WNBA finals — the only place she could find that would play the game with the sound on — that she decided to take action. “Back then, it was not only hard to find a place to watch games, but it also felt really disrespectful,” says McConnell-Johnson.

At Babe’s, its sports focus is amplified with a vintage scoreboard on a back wall, along with various trophies and ribbons donated by women who answered a request from the bar for memorabilia via the bar’s social media. The drink menu includes four local beers on tap as well as prosecco. There is a strong wine program plus a selection of nonalcoholic and low-alcohol drinks.

In addition to televising women’s-only sports — “If it’s celebrating women athletes, we’re there,” says McConnell-Johnson — Babe’s features in-house programming to sync with big games. “Between Periods” offers context to the games being viewed, including player details and team stats.

Babe’s isn’t alone in its quest to showcase women’s sports. A number of similar spots have opened up around the country, including The Sports Bar in Portland, Ore.; A Bar of Their Own in Minneapolis; and Rough and Tumble in Seattle. “The ecosystem of women’s sports is still growing so much and being developed,” says McConnell-Johnson. “One of the missing pieces is the accessibility of watching women’s sports and just participating. We see Babe’s as a real cultural space that can help facilitate growing that fandom in the ecosystem.”