NAICS 722410 Quarterly Industry Report
Drinking Places (Alcoholic Beverages)
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 722410Sector: Accommodation and Food Services (72)Updated: Q1 2026
About This Report
This industry profile for Drinking Places (NAICS 722410) draws on data from the U.S. Census Bureau[6], Bureau of Labor Statistics[9], FDA food safety data[7], and SBA size standards database[8]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, hospitality analysts, and business brokers with current market data. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the drinking places (alcoholic beverages) industry.
NAICS Sector
72
Accommodation and Food Services
Industry Definition & Overview
Drinking Places (Alcoholic Beverages) (NAICS 722410) encompasses establishments known as bars, taverns, nightclubs, and drinking places primarily engaged in preparing and serving alcoholic beverages for immediate consumption per the U.S. Census Bureau[5]. These establishments may also serve limited food, provide live entertainment, or operate pool tables and other recreational amusements, but the primary revenue source is alcoholic beverage sales.
The Census Bureau[6] reports roughly 28,113 establishments employing 376,430 workers across the United States. Bars and taverns operate under federal Alcohol and Tobacco Tax and Trade Bureau (TTB) oversight for beverage production and distribution, while the FDA[7] regulates any food service operations. State alcohol beverage control (ABC) commissions issue retail liquor licenses, with license availability, transfer rules, and geographic restrictions varying widely by state and municipality.
Per the SBA Table of Size Standards[8], the size standard is $9 million in average annual receipts. Beverage cost of goods sold typically runs 20 to 25 percent of revenue for well-managed operations, leaving higher gross margins than food service businesses. Labor costs, rent, and entertainment expenses represent the largest operating expenditure categories. Dram shop liability laws in most states hold bars financially responsible for injuries caused by intoxicated patrons, creating a meaningful insurance and risk management requirement. Craft beer, cocktail culture, and experiential entertainment concepts have driven format diversification across the sector.
What's Included in This Industry
- Alcoholic beverage preparation and service at bars, taverns, and pubs
- Nightclub and dance club operations with beverage service
- Craft beer taproom and brewery tasting room operations
- Wine bar service with curated wine list management
- Cocktail lounge and specialty cocktail bar operations
- Live entertainment programming and DJ event hosting
- Limited food menu preparation and bar snack service
- Pool table, dart, and recreational amusement operations
- Beverage inventory management and supplier purchasing
- Liquor license compliance and responsible service training programs
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Accommodation and Food Services | 72 |
| Subsector | Food Services and Drinking Places | 722 |
| Industry Group | Drinking Places (Alcoholic Beverages) | 7224 |
| NAICS Industry | Drinking Places (Alcoholic Beverages) | 72241 |
| National Industry | Drinking Places (Alcoholic Beverages) | 722410 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 722511 | Full-Service Restaurants | Full-Service Restaurants share food and beverage operations but derive primary revenue from dining rather than alcoholic beverage sales, though many restaurants maintain active bar programs |
| 722513 | Limited-Service Restaurants | Limited-Service Restaurants overlap in food preparation but lack the seated bar service and entertainment programming that characterize most drinking places and nightclub operations |
| 722515 | Snack and Nonalcoholic Beverage Bars | Snack and Nonalcoholic Beverage Bars serve beverages without alcohol in similar seated or counter-service formats, competing for daytime and health-conscious customer spending |
| 722320 | Caterers | Caterers provide event-based beverage service that overlaps with bar operations, particularly when drinking places host private events requiring customized bar and food packages |
| 312120 | Breweries | Breweries produce the craft beer products served in many drinking places, with brewery taprooms operating as both production and retail drinking establishments |
| 445320 | Beer, Wine, and Liquor Retailers | Beer, Wine, and Liquor Stores sell packaged alcoholic beverages for off-premise consumption, competing for consumer alcohol spending with on-premise drinking establishments |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 8.1% | 3,279 |
| 2 | New York | 8.1% | 3,250 |
| 3 | Texas | 7.3% | 2,925 |
| 4 | Illinois | 7.1% | 2,870 |
| 5 | Wisconsin | 6.8% | 2,716 |
| 6 | Pennsylvania | 5.4% | 2,171 |
| 7 | Florida | 4.5% | 1,826 |
| 8 | Ohio | 4.5% | 1,796 |
| 9 | Michigan | 3.2% | 1,288 |
| 10 | Washington | 2.4% | 969 |
% Of Establishments
0%
8%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
3,136
Total SBA Loans
$1.2B
Total Loan Volume
$374K
Average Loan Size
12 yrs
Average Loan Term
10.16%
Average Interest Rate
37,616
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[8], Drinking Places (NAICS 722410) has a size standard of $9 million in average annual receipts for federal contracting purposes. SBA lending programs[10] support equipment purchases, leasehold improvements, and working capital for qualifying bar and tavern operators establishing or expanding their businesses. Eligible businesses can access SBA 7(a) loans[11] for working capital, equipment, and acquisition financing, while 504 loans[12] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Newtek Bank, National Association | 192 | $75.8M | $395K |
| 2 | The Huntington National Bank | 312 | $73.8M | $236K |
| 3 | Celtic Bank Corporation | 72 | $52.5M | $730K |
| 4 | Readycap Lending, LLC | 152 | $42.7M | $281K |
| 5 | Integro Bank | 8 | $40.0M | $5.0M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 722410?
NAICS 722410 covers establishments primarily engaged in preparing and serving alcoholic beverages for immediate consumption per the U.S. Census Bureau[5]. This includes bars, taverns, nightclubs, cocktail lounges, and drinking places. Limited food service and entertainment may be offered, but alcoholic beverage sales must represent the primary revenue source for proper classification.
How large is the U.S. drinking places industry?
The Census Bureau[6] reports roughly 28,113 establishments employing 376,430 workers nationwide. Operations range from small neighborhood taverns to large nightclub and entertainment complexes. Urban markets tend to have higher establishment density, while suburban and rural areas feature fewer but often larger venues serving broader geographic customer bases.
What liquor licensing requirements apply to bars and taverns?
State alcohol beverage control commissions issue retail liquor licenses with requirements varying widely by jurisdiction per state regulatory frameworks. License availability may be limited by population-based quotas, geographic restrictions, or proximity rules relative to schools and churches. License transfer during business acquisition often requires regulatory approval and background checks on new owners. Federal TTB compliance applies to any establishment involved in beverage production.
What is the SBA size standard for drinking places?
Per the SBA Table of Size Standards[8], the size standard is $9 million in average annual receipts calculated over the preceding five fiscal years. Most bars and taverns fall well below this threshold, qualifying for SBA-backed financing including 7(a) loans for equipment purchases, leasehold improvements, and working capital.
What profit margins can bar operators expect?
Beverage cost of goods sold typically runs 20 to 25 percent of revenue for well-managed operations per industry benchmarking data, creating higher gross margins than food service businesses. Net profit margins of 10 to 15 percent are achievable for well-run bars after accounting for labor, rent, insurance, and entertainment costs. Food service additions generally carry higher cost ratios that can reduce blended margins.
What liability risks do drinking place owners face?
Dram shop liability laws in most states hold bars financially responsible for injuries caused by patrons who were served while visibly intoxicated per state statutory frameworks. Liquor liability insurance premiums reflect this exposure and represent a material operating cost. Responsible beverage service training programs for staff help mitigate risk and may qualify operators for insurance premium reductions in some jurisdictions.
How do location and concept affect bar valuations?
Location quality and lease terms represent the largest valuation drivers per Census Bureau[6] geographic business data. Urban entertainment districts, college towns, and tourist areas command premium rents but generate higher revenue per square foot. Concept differentiation through craft cocktails, live music, sports viewing, or themed experiences affects customer loyalty and pricing power. Liquor license value can represent a substantial asset in quota-limited markets.
What trends are shaping the drinking places sector?
Craft cocktail programs, local brewery partnerships, and experiential entertainment concepts have driven format diversification across the bar sector per BLS industry data[9]. Non-alcoholic beverage options including mocktails and zero-proof spirits have expanded menus for health-conscious customers. Delivery and takeout cocktail service, enabled by pandemic-era regulatory changes in many states, has created a new revenue channel for some operators.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Census Bureau data.census.gov
- [7]FDA fda.gov
- [8]SBA Table of Size Standards sba.gov
- [9]Bureau of Labor Statistics bls.gov
- [10]SBA lending programs sba.gov
- [11]SBA 7(a) loans sba.gov
- [12]504 loans sba.gov
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