January and February have kicked off the new year with what seems to be some pretty sobering data. Policies are shifting and the industry is being asked to do more with less, faster and with fewer people. But underneath the pressure, there are signals worth paying attention to: new channels opening, consumer behaviour evolving in genuinely interesting ways, and a global conversation about what hospitality is actually for that’s long overdue.
Hospitality has always been cyclical. What matters now isn’t predicting the next upswing, it’s learning how to operate clearly and intentionally in the middle of uncertainty.
Here’s what mattered, and what to do about it.
The Industry Reset Is Real and Waiting for a Rebound Won’t Fix It
What happened
Let’s start with the forecast everybody’s been circulating.
Dalhousie University’s Agri-Food Analytics Lab projects roughly 7,000 Canadian restaurants closed in 2025, with another 4,000 expected in 2026. That’s the number being quoted across industry coverage, and it’s worth taking seriously. However, it’s also worth reading carefully: these are net figures. Closures minus new openings. They’re projections based on current cost trajectories, not a locked-in outcome. The sector is under genuine stress. It is not necessarily in terminal decline.
Dalhousie’s own framing is instructive here. They call it a “structural reset” based on prolonged pressure from input costs, labour, rent, and the end of pandemic support that has been grinding through the sector since 2021. A reset implies churn and reconfiguration, not a one-way collapse. New concepts are still opening. Chain restaurants and larger groups are more likely to weather the pressure than small independents, which means what we’re watching is partly a redistribution of market share, not simply a shrinking pie.
There’s also a trajectory worth noting: if 7,000 closed in 2025 and the projection for 2026 is 4,000, that’s roughly a 40% reduction in the rate of closures. Painful, but moving in a direction that looks more like stabilization than acceleration. Industry groups are actively lobbying for permanent GST/HST relief on restaurant meals. These kinds of policy interventions can have meaningfully altered outcomes if it lands.
That said, 41% of Canadian foodservice businesses are currently operating at a loss or breaking even. For these establishments, survival still depends heavily on volume. Enough traffic to cover fixed costs that aren’t going anywhere. The idea that restaurants can simply pivot to identity and margin without worrying about butts in seats is too clean. Most restaurants need both: a clear reason to exist and enough guests showing up to make the math work.
Why it matters
When a significant share of the restaurants and bars around you are operating at the edge, the whole ecosystem feels it. Supplier relationships tighten. Staff move around more. Guests become more selective about where they spend. For wine and beverage brands, this means your trade partners are under more pressure than they’re likely telling you and the ones who survive will remember clearly who showed up with useful tools versus who just showed up with a sales pitch.
What to do now
Don’t build a strategy around waiting for conditions to normalize, but don’t treat these new developments as inevitable or permanent either.
- Focus on cash velocity, not just revenue. Right now the most important metric in a restaurant or winery isn’t just sales. It’s how fast inventory turns into cash. Review anything tying up capital: slow-moving wines, seasonal menu items with expensive ingredients, cellar stock that isn’t selling. If something isn’t converting into revenue within 30 – 45 days, either feature it, bundle it, or move it.
- Turn suppliers into operational partners. If you’re a restaurant, start asking suppliers different questions. Don’t just ask what’s new. Ask: “What product sells fastest on other lists like mine?” “What wine works best by the glass at $15 – 18?” “What can I pour that holds up for 3 days open?” Suppliers who can answer those questions are helping you run a business. The ones who can’t are just filling orders.
- Shorten the distance between listing and selling. A wine or cocktail doesn’t sell because it’s on the menu. It sells because someone on the floor believes in it. Build one clear story and one clear recommendation for every by-the-glass option. If a server can confidently say “If you like Chablis, try this Niagara Chardonnay. Same freshness, more texture,” that bottle moves. You must invest the time and money into this step. The return is almost immediate.
- Protect the operators around you. For wineries and beverage brands: your restaurant partners are under enormous pressure right now. Supporting them with staff training, menu language, or promotional ideas is the fastest way to keep placements long term. The brands that help operators survive this year will still be on lists in five years.
Mod Wine Co. POV
The restaurants and wineries that emerge stronger from this period won’t be the ones waiting for the market to recover, but the ones using this moment to tighten operations, clarify their identity, and build a business that works even when conditions aren’t perfect.
The Biggest Alcohol Policy Shift in a Generation
What happened
Something structurally significant is happening on the retail side. And unlike some new policy announcements, this one might actually live up to the big headlines.
Ontario is in the midst of opening roughly 8,500 new points of sale in the form of convenience stores, grocery chains, and big-box retailers making way for beer, cider, wine, and low-ABV RTDs. This is the most significant alcohol deregulation in Ontario’s history.
At the same time, premiers across nine provinces and one territory have committed to enabling interprovincial direct-to-consumer alcohol shipping by May 1, 2026. The logistics and taxation details are still being worked out, but the direction is clear: the wall between Canadian producers and Canadian consumers is coming down.One note of context: the temporary 15% wholesale discount the LCBO offered bars, restaurants, and convenience stores to buffer U.S. tariff impacts expired at the end of 2025. Operators are absorbing some of that cost, and some of it is passing to guests.
Why it matters
This is a once-in-a-generation distribution shift, and the window to establish position in new channels is narrow. Convenience retail rewards recognizability and accessibility and it’s not a category where shelf presence builds slowly over years. This is a distribution land grab, and early movers will have an advantage. On the DTC side, interprovincial shipping doesn’t just open new markets, it opens a direct relationship with consumers that the LCBO system was never designed to enable.
What to do now
- Convenience store shoppers make decisions in five seconds or less. That means the winners in this channel will be wines and drinks that answer three questions immediately: What is it?, How much does it cost? Why should I grab this instead of [insert your beverage category]?
- Packaging clarity and price clarity will matter more than terroir language. Design products for “Tuesday night purchases.” A lot of alcohol bought in convenience stores will be top-up buying people grabbing something on the way home. Think about formats that fit that behaviour like half bottles, cans, 2-packs or single serve options. The products that succeeds here will be the one someone can grab quickly without committing to a full bottle.
- Use restaurants as discovery engines. Restaurants are still the best marketing platform alcohol brands have. Someone trying your wine at dinner is far more likely to buy it later at retail. Strengthen that relationship instead of abandoning it. If someone loves your wine at dinner and then sees it at a convenience store the next day, that’s a powerful loop.
- Build your direct audience now. Interprovincial shipping is coming whether everyone is ready or not. The wineries who benefit from it will be the ones who already have a direct relationship with customers.Focus on building: a real email list, a simple wine club, a reason for people to stay connected. You don’t need a huge database. A loyal audience of 1,000 customers can sustain a small winery far better than anonymous retail distribution.
Mod Wine Co. POV
New sales channels create opportunity, but they also create noise. The producers who benefit most from this shift will be the ones who make it easiest for consumers to understand what they offer and why it belongs in their lives.
Guests Are Spending Less Per Visit and That’s Not Going Away
What happened
The pattern that has emerged is that Canadians are being more deliberate about where and how they spend when they dine out. But “everyone is spending less” is an oversimplified take, and building a strategy around it could steer you wrong.
What the data actually shows is a split. Some guests are cutting frequency but spending more per visit when they do go out, treating the occasion as “worth the splurge”. Others are keeping their visit frequency and trimming the edges: skipping the second bottle, passing on dessert, choosing the mid-tier pour instead of the premium one. The National Restaurant Association’s 2026 State of the Industry report projects just 1.3% real restaurant sales growth this year, but that top-line pressure coexists with tasting menus, premium chef’s counters, and high-ticket experiences that are still launching and still getting booked.
The early dining trend is worth taking seriously, but not only for the reasons usually cited. OpenTable data points to a 30% increase in 4–5pm reservations in Canada, and yes, some of that is cost-driven. But it’s also work-from-home schedules, childcare, and guests who simply prefer to avoid late-night crowds. Happy hour is great to capitalize on but framing it purely as a value play misses that it’s also a lifestyle shift. Similarly, solo dining is up significantly in several markets, driven as much by more people living alone and normalized individual leisure as by budget pressure. These are multi-layered behavioural changes, not just affordability signals.
There have been some reports on GLP-1 medications like Ozempic, Wegovy, and their growing cohorts, effects on the industry. However, the data is still emerging. Some restaurants in the U.S. are already adjusting portion sizes and building protein-forward menu items with this guest in mind. But people on these medications still represent a minority of the dining population, and most analysts currently frame these medications as one contributor among several, alongside health consciousness, rising food costs, and general wellness trends, rather than a primary driver. Worth watching? Yep. Worth treating as settled science? Not yet.
Why it matters
When any market stratifies, the middle gets squeezed hardest. Mid-price, mid-experience, mid-everything is exactly where you don’t want to be right now. Guests spending carefully want to feel like their money was well spent. Guests spending freely want to feel the occasion justified it. Both are attainable, just not with the same offer or the same language. The brands who know which guest they’re actually talking to will consistently outperform the ones trying to speak to everyone at once.
What to do now
- Create “entry moments,” not discounts. When people are spending carefully, they still want to feel welcomed in. Instead of lowering prices across the board, create clear entry points: a great value/something-someone-has-never-had-before glass of wine, a snack + drink combo or an early evening tasting flight. These are invitations into the experience, not cheapening it.
- Make early dining feel intentional. The 4–6pm shift is very real. Instead of treating it as leftover time before dinner service, build something around it like an aperitivo hour, chef snack menu, small bites.People showing up early aren’t just looking for value, they’re looking for a different pace of evening.
- Fix the “dead middle” of your menu. Most restaurants have a middle tier where nothing feels exciting enough to order. That’s where revenue disappears. Look for items that are: too expensive to feel casual or too basic to feel special. Either push them up with a stronger story or simplify them into something more approachable.
- Design something specifically for one person. Solo diners are one of the most overlooked guests in hospitality. A thoughtful bar menu, half-bottle program, or small tasting flight signals that someone dining alone isn’t an afterthought. And the reality is: solo diners often become regulars.
Mod Wine Co. POV
Guests haven’t lost their appetite for hospitality. They’ve simply become more thoughtful about when and where they spend, which means the places that feel intentional, welcoming, and memorable will continue to earn their nights out.
Moderation Is Rising But the Picture Is Messier Than the Headlines Suggest
What happened
The no/low-ABV story has real momentum, and dismissing it would be a mistake. LCBO data from late 2025 confirmed the direction: de-alcoholized wines up 126%, RTD cocktails up 31%, non-alcoholic beer and cider up 14%. Global trend forecasts for 2026 are full of language about mindful drinking and social wellness. The trade press has declared moderation mainstream and largely moved on.
But the actual consumer data is more complicated and honestly, more interesting.
IWSR, which tracks global beverage alcohol more carefully than most, describes moderation as significant and growing, but explicitly “nuanced.” In 15 key markets, only 26% of drinkers consume no-alcohol beverages at all, with North America still trailing Europe by a fair margin. Meanwhile, 74% of drinkers in top markets still consume alcohol regularly, including full-strength products.
A 2026 Square survey of Canadian consumers found that 28% plan to reduce their consumption this year which is of course meaningful, but not a majority. And in early January, Square’s own transaction data showed non-alcoholic drink sales at Canadian bars rising 4.3% while alcoholic beverage sales rose 8.6% over the same period.
The more honest framing isn’t “moderation is the new default.” It’s that drinking has become more intentional. Guests are increasingly mixing full-strength, low-ABV, and no-ABV options across the same evening rather than committing permanently to one lane. Statistics Canada data shows alcohol sales by volume have declined for four consecutive years but Canadians are still purchasing the equivalent of about eight drinks per week on average. Drinking somewhat less. Not drinking fundamentally differently.
What’s genuinely shifting, especially with younger guests, is that moderation tends to come in bursts. Take Dry January, for example. A deliberate slow-down. A few sober weeks. Cyclical, not permanent. The person at your bar on a Wednesday night might be two weeks into a personal reset, or they might be out to celebrate. You often can’t tell, and that’s kind of the point.
Why it matters
Brands who read moderation as a simple binary like “people are drinking less, so invest in no-ABV” will over-rotate and miss the actual opportunity. What guests really want is autonomy: the ability to choose their own relationship with alcohol on any given night, and to have every option feel equally considered. A no-ABV offering that feels like an afterthought sends a message. A no-ABV offering that’s genuinely good sends a very different one.
What to do now
- Build drinks for pacing, not abstinence. The real opportunity isn’t just non-alcoholic drinks. It’s helping guests pace an evening comfortably. Think about things like spritzes, lower-alcohol cocktails, or lighter wines. The goal isn’t (and shouldn’t be) to replace alcohol. It’s to give guests more ways to stay at the table longer.
- Treat non-alcoholic drinks like real beverages. Guests ordering no-ABV drinks still want something interesting. A good alcohol-free drink should still have texture, bitterness or acidity and complexity. When these drinks feel thoughtful instead of obligatory, people order more than one.
- Train staff to normalize switching lanes. The moment someone orders a non-alcoholic drink shouldn’t feel like they’ve stepped outside the menu. It should feel completely natural. The best programs are designed so a guest can move seamlessly from a wine to a spritz to a non-alcoholic cocktail and settle into dessert without it feeling like a compromise or more importantly…a waste of money.
Mod Wine Co. POV
Moderation isn’t about drinking less or more, it’s about drinking with intention. The beverage programs that succeed will be the ones that respect that flexibility and make every choice on the menu feel equally thoughtful.
The Foodservice “Structural Reset”
What happened
“Structural reset” is the phrase analysts have landed on to describe what’s happening in Canadian foodservice, and it’s earned its place in the conversation. But it’s worth slowing down on what it actually means before treating it as a complete diagnosis.
The pressures are real. Input costs, $18/hour minimum wage in Ontario, pandemic debt still being carried, leases that didn’t get any friendlier. The sector has been grinding through this since 2021, and the weight is cumulative. But here’s something worth holding onto: the National Restaurant Association projects 1.3% real restaurant sales growth globally in 2026. That’s modest. It’s also still growth. An industry adapting under pressure looks different from an industry in freefall, and it’s worth being precise about which one we’re actually talking about.
The “automation and simplification are now happening everywhere” version of this story is also worth questioning a little. Adoption is uneven. Larger operators and chains have the capital for cobotics, autonomous kitchen equipment, and streamlined digital systems. A lot of independents don’t and some experience-driven venues are deliberately resisting simplification because complexity is part of what they’re selling. These strategies get enormous coverage in the trade press. They are not yet the operational reality in every Ontario kitchen.
The chain turnaround stories such as Outback’s $50M restructuring and TGI Fridays climbing back from bankruptcy are real, but they’re also specific situations: legacy casual dining brands with aging formats and real estate challenges that were there long before this economic cycle. We wrote about this in January with the rise and fall of Hooters this year. Their playbook isn’t automatically yours. Lots of independent restaurants, fast casual concepts, and experience-led venues are navigating this moment very differently, and some of them are doing it well.
What the sector is lobbying for is permanent GST/HST relief on restaurant meals after the temporary break ended in February 2025. This is worth watching. But it’s not a rescue. Closures come from multiple compounding pressures, and tax relief is one piece of the puzzle. This industry has been through hard cycles before. It has always adapted, imperfectly and unevenly, but it has.
Why it matters
When margins are this tight, beverage programs either justify their place on the P&L or they get cut. Wine lists that are complicated to execute, require specialized knowledge to sell, or tie up cash in slow-moving inventory start to look like liabilities. Those who keep investing in beverages, and keep getting results from it, are the ones with programs designed around the reality of their team and their kitchen, not inherited from a different era.
What to do now
- Simplify where guests don’t notice. Not every part of the operation needs to be optimized for theatre. Look for areas where complexity adds cost but not experience like overly large menus, too many SKUs in beverage inventory and dishes that require too many prep steps. Guests rarely notice when a menu becomes tighter and more focused, but the kitchen definitely feels the difference.
- Design your beverage list like a tool, not a catalogue. The best wine lists right now are easy to sell, not just impressive. Instead of dozens of obscure options, focus on wines that servers can confidently recommend in a few seconds. A smaller list that turns quickly will outperform a large list that sits.
- Look for one operational pressure to remove this quarter. Trying to solve everything at once overwhelms teams. Pick one friction point that consistently slows service like slow POS flow, ordering inefficiencies, or inventory tracking. Fixing even one operational headache can noticeably improve morale and profitability.
- Lean on your suppliers for real support. The best supplier relationships today look more like partnerships than transactions. Good reps should be helping with menu strategy, staff training and product placement. If someone is only showing up to drop off samples, you’re not getting the full value of that relationship.
Mod Wine Co. POV
Pressure often forces clarity. The businesses that adapt best during moments like this are usually the ones that simplify operations, focus on what they do best, and build systems that support their team instead of exhausting them.
The Noma Reckoning, and What It’s Really About
What happened
We wrote about this separately, but it belongs here too. And if you work in hospitality at any level, it’s at least partially your story.
In March 2026, René Redzepi stepped back from Noma following a major investigation into years of alleged physical and psychological abuse in that kitchen. For people outside the industry, the details were shocking. For a lot of people inside it, the honest reaction was something closer to: yeah, that tracks.
Why it matters
This isn’t only an ethics conversation, it’s a practical one. Younger cooks, sommeliers, and service staff are less willing than any previous generation to accept the old architecture: the hierarchy, the silence, the idea that enduring abuse is somehow a credential. They have options. They talk to each other. And they leave. In an industry already dealing with serious labour shortages, a culture built on fear isn’t just wrong. It doesn’t work anymore. The kitchens and tasting rooms that attract and keep good people over the next decade are the ones being built on something different right now.
What to do now
- Build a culture where people can stay. The biggest competitive advantage in hospitality over the next decade will be staff stability. Teams that stay together deliver better hospitality, operate more smoothly, and build stronger guest relationships. That doesn’t require expensive perks. It requires predictable schedules, respect in service and real communication. These are small things that compound over time.
- Create small paths for growth. People stay longer when they can see where their skills are going. Even small steps matter like letting a server help design a cocktail or letting a junior cook run a feature. Ownership builds pride.
- Remember that hospitality starts with the team. Guests can feel the difference between a room where staff are supported and one where they’re surviving the shift. And increasingly, guests choose where they spend based on that feeling. The restaurants that thrive in the next decade won’t just be the ones with great food or great wine. They’ll be the ones where people actually want to work.
Mod Wine Co. POV
Hospitality has always been about taking care of people. As the industry evolves, the places that understand that care begins with the team will be the ones that create the strongest experiences for guests.
The signals are there if you know where to look. Policy shifts, spending behaviour, distribution changes, and evolving guest expectations are all reshaping the landscape of hospitality in real time.
The businesses that thrive over the next few years won’t be the ones reacting the fastest. They’ll be the ones thinking the most clearly.
At Mod Wine Co., we help restaurants, wineries, and beverage brands translate industry shifts into practical strategies that drive revenue, strengthen guest experiences, and build long-term resilience. If you’re thinking about how these trends impact your business, we’d love to talk.
Reach us at info@modwineco.com
