The U.S. surgeon general’s new push to warn consumers about the link between drinking and cancer comes at a precarious time for restaurant owners trying to pencil out a profit that hinges on alcohol sales.

Costs of food and labor have risen, and some inflation-weary Americans continue to cut back on eating out. Sales dipped 1.7% between November 2023 and November 2024, according to the National Restaurant Association.

When people do go out to eat, some aren’t drinking as much. Members of Generation Z in particular are moderating how much they consume and have helped popularize terms like “sober curious” and “California sober,” in which cannabis replaces alcohol. A September survey showed 32% of all consumers who drink at least a few times a year were drinking less often in 2024 than before the pandemic, according to the research firm Datassential.

“We are in a new era of nonalcoholic drinking,” said Renee Wege, a trend expert and publications manager at the company.

Surgeon General Vivek Murthy warned recently that alcohol is a preventable cause of cancer and called for reconsidering the federal government’s guidelines for how much Americans can safely drink. As with cigarettes, he said, the cautionary labels already on alcoholic beverages should mention the risk of cancer.

For restaurants trying to offset rising rent, food and labor costs, sales of alcoholic drinks have long provided a reliable income stream. A 2023 report by the National Restaurant Association showed that they made up about 21% of all sales at full-service restaurants. At some fine-dining establishments, the number was closer to 30%.

It’s too soon to know if the report, coming after years of warnings about the health hazards and the rising use of GLP-1 drugs that can reduce the desire to drink, will slow alcohol sales at restaurants even more.

But owners are bracing for that, and many have already turned to offering more nonalcoholic beverages.

“This news we’ve just gotten is probably going to affect things,” said Tracy Vaught, who owns five restaurants in Houston with her husband, chef Hugo Ortega.

Alcohol sales at her restaurants have been falling. In 2015, they produced 31.5% of the company’s income. Last year, that share was 27.5%.

“It doesn’t seem like much, but it really makes a difference,” she said.

Although alcohol generates far less revenue for restaurants than food, profit margins on drinks are much larger and the financial risks for owners are fewer. Unlike a walk-in refrigerator filled with perishable food, the bar is stocked with inventory that doesn’t go bad. At the Atlanta restaurant Gunshow, sales of alcoholic drinks account for about 30% of all revenue, but they provide about 80% of the profit.

“Margins for food have decreased so significantly over the last four years that, without a solid beverage program, restaurants can’t make it,” said Kevin Gillespie, who owns Gunshow and the tasting-menu restaurant Nàdair. “But there are creative paths out of this.”

Customers might not want alcohol, but many still want a cocktail. It’s a challenge to make sophisticated nonalcoholic drinks as appealing as their spirited equivalents — but, done right, they can be priced almost identically, Gillespie said.