Len Panaggio, Beverage Consultant

By Len Panaggio

It’s hard to believe that the start of another year is upon us. What’s in store for our industry in 2026? A few items have caught my eye and bear watching right now. First is the RI Savers plan, which mandates small businesses to create a retirement plan that is implemented in stages, over time, based on the number of employees. Pay attention to the deadlines on this and if you have questions, contact the RI Hospitality Association for help. Second, Rhode Island’s minimum wage increases to $16/hour on January first and then again in January 2027 to $17/hour. The tidal effect of these moves will be, in my opinion, like a tsunami to your bottom line.  

Aside from these legislative changes, there are many issues within the beverage industry. As I mentioned last month, overall sales are down, about 6% in some categories. Because of this downward trend, we are seeing a shakeup in the industry. Many microbreweries are closing down, not only because of decreased consumption, but also rising costs—especially in labor—making it more difficult to survive. Wineries are also feeling the financial pinch as consumption is down especially among Gen Z. 

There are too many wineries making too much wine and as a result, they are forced to lower prices which may lead to a glut of unsold inventory. Weather has also contributed to their struggles, particularly fires, warming and freezes! Distilleries aren’t immune to this phenomenon either. Much like the aforementioned problems with beer and wine, distilleries are closing, in some cases far more frequently than breweries and wineries. They are facing some of the same issues – cost of labor, decreasing appetite for spirts, and changing demographics. 

So, while the overall production side of the beverage industry is troubled, it may be a boon for the retailers. Stores, restaurants, and caterers will likely benefit from lower pricing, which should help offset some of the financial issues we as a group are facing. While I feel no joy in this prospect, it’s real. Remember, over the past 25 years, things were booming for the beverage industry and we as retailers were at their mercy from a pricing perspective. 

Consumer behavior will also be a little unpredictable in 2026. While some ring in the new year with champagne, many embrace the “Dry January” challenge. With it comes a decrease in alcohol sales, so make sure your mocktails are creative and plentiful and your zero proof beverages are stocked. In addition, the rapid consumption of weight-loss medication like Ozempic plays a role in dining and drinking behavior. While we all know that people eat less when taking these medications, studies have also shown that the desire to drink alcohol is also lessened. It’s all getting so complicated; my head is spinning.

On a brighter note, with January being a relatively quiet month, it presents a really good opportunity to visit local and regional breweries, wineries and distilleries. This is a great learning experience for your staff and offers benefits far beyond education—like team building. There are plenty of wonderful locations to visit in our area, all easily drivable. Of course, for those who can create a trip to the West Coast or Europe, there is no time like the present. And as a bonus, these operations always take great care of industry employees. 

Happy New Year! Wishing everyone a peaceful and profitable month!

Len Panaggio’s career in food and wine spans more than three decades as an owner and as a beverage director at some of the top restaurants in Rhode Island. Currently a hospitality consultant, Len is a graduate of the University of Rhode Island and has attended the Culinary Institute of America Master Sommelier program and the Sterling School of Service and Hospitality.