Since the beginning of the year, we have lost some beloved Reno beverage destinations to closures—Imbib Custom Brews, The Loving Cup and Cafe Capello, just to name a few.
For many reasons, the beverage industry is dealing with more turbulence than it has in decades, outside of the COVID-19 pandemic lockdowns. It’s not just Reno enduring this rocky terrain. In 2023, IWSR, a global beverage research company, recorded a 2% decline in the volume of spirits sold. This was the first decline in nearly 30 years. Most of the bars and restaurants affected by the decline in alcohol sales are small, locally owned businesses: Nine in 10 restaurants have fewer than 50 employees, and seven in 10 restaurants are single-unit operations, according to National Restaurant Association data.
With drinks trending downward, and multiple local businesses closing in the first part of 2025, I chatted about Reno’s current landscape with a couple of folks who serve us every day.
Derek Sornson is the co-owner of Dubs Sports Lounge in downtown Reno, open since April 2024, serving classic sports-bar fare and showcasing the best sports entertainment. He was also one of the founders of Vistro, the delivery/takeout-only restaurant that shuttered last year.
“In the past year, overall, the business has been more challenging,” Sornson told me. “The price of everything has gone up.”
At a sports bar, patrons generally expect happy-hour deals and reasonably priced beers—but rising food prices affect not only the groceries you buy, but also the cost of goods for bars and restaurants. In January, food prices increased 0.4% over the previous month, according to the Bureau of Labor Statistics. That same report also shows that food prices are 2.5% higher than 12 months ago—and up 31 percent since 2019. Meanwhile, Gallup polls from 1992-2024 show that in the U.S., where beer traditionally has been the most preferred alcoholic beverage, only 34% of people now prefer beer. This is an all-time low—down from a high of 47% in the early 1990s. According to the National Restaurant Association, at full-service restaurants, alcohol accounts for about 21% of total sales.
Sornson and the team at Dubs do their best to keep their costs at or below industry standards, but he said he still loses money because of the costs he cannot control. The price of chicken wings is not the only volatile price that affects the bottom line of a bar or restaurant.
“I wish people understood that there is so much more than just the cost of goods and staffing that play a role in pricing,” Sornson said. “Insurance is incredibly expensive; rent, utilities and everything else continue to increase.”
Graeson Leach owns Midnight Coffee Roasting, with locations in downtown Reno and Midtown. Leach spends about 90 hours a week working, either behind the counter or roasting coffee. His Midtown location features food, beer and coffee drinks.
“In the last year, we’ve seen more consistent volatility in sales,” Leach said. “We always had slow and busy times, but now it feels like the frequency between those times has increased—especially downtown.”
In the three years that his downtown branch has been open, 15 businesses have closed around it. “Losing that community and those people hurts everyone,” Leach said.
Leach continued: “I wish more people understood just how low-margin coffee is, but more than that, just how low the average ticket price can be.” In December, coffee futures prices rose to more than $3.30 per pound, breaking a 47-year-old record, and in January the price rose further, to $3.77.
As for ticket prices: It takes about 25 sales of Midnight Coffee Roasting’s best-selling drink, the “shaken brown sugar,” to equal the same revenue as five 12-ounce bags of roasted coffee. “So you may look at a coffee shop full of people and a line to the door,” Leach said, “but the item mix and average ticket of those customers are important to understand.”
How do you stay positive when the price for everything you sell increases, and businesses close around you? “A small business, coffee or otherwise, is nothing without the community around it,” Leach said. “Because of our events, wholesale relationships and general customer service, we have a community that I’m willing to sacrifice for every single day, and I’m so proud of that and thankful for them.”
Said Sornson: “As long as I can truly say to myself that I am doing everything in my power to run a successful restaurant and bar, then I can be happy with myself and keep a positive mindset.”
That is the heart of small businesses: People doing everything they can to create a product of which they are proud. Right now, the deck is stacked against small business owners more than it has been in a long time, and at the heart of most of these endeavors are people working their hardest to bring something to our community—and for that, I am grateful.
