By Elizabeth GodsmarkAtlantic Publishing
The Basic Mathematics of Profitability
A typical beverage operation generates a constant stream of data and information, endless columns of figures and daily records. But you'd be surprised how few managers actually do anything with these figures, let alone fully grasp their implications. So how can you tell if you're operating profitably? The answer is you can't, unless, of course, you get to grips with some basic mathematics. For a start, you'll need to know how to perform a few simple calculations, such as working out an item's cost percentage. You don't need to be a mathematician to figure the following straightforward formulas:
- Cost per ounce. This is the basic unit cost of a drink. For example, to calculate the cost per ounce of a liter bottle, divide the wholesale cost of the bottle by 33.8 ounces, or in the case of a 750ml bottle, by 25.4 ounces. The figure you arrive at is the cost per ounce.
- Cost per portion. To be able to price a certain drink, you must first calculate the base cost of the serving. Use the cost per ounce to work out the cost per portion. For example, if the cost per ounce is $0.60 and the recipe requires 1.5 ounces, then the portion cost is $0.90.
- Cost percentage. Master this formula. You cannot function without it! To calculate the cost percentage of an item, divide the product's cost (or portion's cost) by its sale price and then multiply by 100. This simple calculation gives you the cost percentage. Profitability hangs on this key calculation. This calculation is the most frequently used formula in the beverage industry. It indicates the profit margin of any drink and represents the difference between the cost of the item and the price for which it is sold. If cost percentage increases, profit margins decrease..
Measuring Bottle Yield
You know the theory: to obtain the cost per ounce, you must divide the cost of the bottle by the number of ounces in the bottle. Fine, so far. But sometimes, in practice, the final sales volumes and profits can seem disappointing. You're confused because you have done everything by the book, and now, somehow, the figures don't quite add up. Get wise.
- Consider evaporation and spillage. When calculating a bottle's cost per ounce, the secret is to deduct an ounce or two up front, before dividing, to allow for evaporation or spillage. Although this will slightly increase the cost per ounce, it will also give you a more realistic starting point.
- Calculation errors. Slight variations can easily creep into a calculation involving both liters and ounces. For example, assume a highball contains 1-1/2 ounces of spirit (or 45ml): using ounces, a liter bottle yields 22.54 measures, whereas, using milliliters, the bottle gives 22.22 measures. Tip: "round down" in the interests of reality.
- Maximize potential yield. You know that a bottle of liquor yields so many measures at a certain cost. However, you also know that sloppy pouring methods can wipe out potential profits. The best way to overcome this problem is to standardize portion serving as much as possible. You've paid for the liquor and want maximum returns.
- Buy big. High-turnover liquor, wines and spirits should always be purchased in larger bottles for better yield per measure.
Gross Profits: The Lowdown
There is no better indicator of a business's success than its gross profit figure. By definition, gross profit is the cash difference between an item or portion cost and its sales price. All attempts to reduce costs should focus on this gross profit figure. Get to grips with how to figure out some important calculations related to gross profits.
- Gross profit. To calculate a drink's gross profit, simply subtract its portion cost from its sale price.
- Gross profit margin. This figure represents the percentage amount of profit made by the sale. Divide the amount of profit by the sales price and then multiply by 100. The result is the gross profit margin.
- Sales percentage profits. To calculate the selling price (based on the required gross profit margin), divide the portion cost by the gross profit margin percentage "reciprocal," i.e., the figure you get from subtracting the target gross margin from 100.
- Cost multiplier. This calculation is often used in the beverage industry to figure out the target selling price for a drink based on its portion cost. Divide the cost percentage you require by 100 and then multiply the result by the portion cost of the product.
- Mixed-drink prime ingredient costing. A calculation used to determine the target sales price for a mixed drink that has only one main ingredient, such as gin and tonic or scotch on the rocks. All you have to do is divide the drink's portion cost by the target cost percentage.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
liquor inventory,
Bar inventory,
bar efficiency,
bar profitability,
NightClub Management,
managing liquor inventory cost,
Bar Management,
alcohol cost,
bar control,
cost control,
inventory control,
managing liquor costs
By Elizabeth GodsmarkAtlantic Publishing
Establishing a General Pricing Plan
Sensitive pricing can make or break your operation. Pricing decisions should never, ever, be made arbitrarily. It is crucial to achieve that fine balance between pricing for optimum profits and making customers feel that they're getting value for money. Of course, you want to sell the drinks at their optimum sales volume, but if you tip the balance by raising the sales price too high, the sales volume will actually drop. So will the profits.
- Research target audience. Investigate your potential market. Check out the opposition, even if this means visiting every liquor outlet in your locality. Get a feel for how much guests are prepared to pay for certain types of drinks.
- Compete. A realistic view of market positioning is essential. Aim to match, beat or pitch for exclusivity (known as a "highball decision", in the beverage industry). All three methods can work. What won't work is a "muddling along" approach. Make a decision, set your goals and price accordingly.
- Type of operation. Customers' image and perception of your establishment play a major role in establishing a pricing structure. Guests have fixed expectations about costs. For example, they expect to pay above-average price at a smart nightclub or "adult" establishment. They expect neighborhood bars, on the other hand, to be cheaper. Devise a pricing strategy that meets customer expectations.
- Portion costs. You may have done your research and drawn up the perfect plan to wipe out the opposition, but, if you haven't "bought in" at competitive prices, you're not going to win. Keep portion costs to a minimum by buying low.
Take a Fresh Look at How You Apply Your Pricing Strategy
Having carefully considered all aspects of your pricing strategy, including cost, availability, competition and target audience, it is essential to make your pricing plan as user-friendly and easy to operate as possible. Simplify.
- Price lists. A complicated price list with too many options and variables leads to employee confusion and incorrect charging. Even if those errors result in higher gross sales, customers will soon complain and you will lose business.
- Devise main price categories. Group products according to their wholesale costs. Use standard increments, like 50 cents, to separate price categories.
- Keep drink prices based on quarters. Prices ending in quarters - $0.25, $0.50 and $0.75 - are easier for bartenders to add up mentally.
- List product prices with their corresponding specific portion size. For example, alongside each item in the liquor inventory, list the appropriate portion size for that drink.
- Point-of-sale system. Make bartenders' lives a whole lot easier! Invest in an automated system, where a few keystrokes are all that's required to find any drink or item on the price list.
Markup: Where to Pitch It
There are no standard markup guidelines in the beverage industry. Unfortunately, getting it right is very important. Profitability, cost control and so much more hang upon those difficult markup decisions. Here are a few guidelines to point you in the right direction:
- Broad guidelines. You need to start somewhere. The following markup suggestions may help:
Cocktails......................................... 3 l/2- 4 times cost
Other liquor......................................... 4 - 5 times cost
Beer................................................. 2 1/2 - 3 times cost
Wine by the glass ............................... 3 - 4 times cost
Carafe wine.................................... 2 l/2- 3 times cost
Dessert wines.................................. 2 - 2l/2 times cost
- Three main pricing methods. There are, however, three general approaches to markups in the beverage industry. A basic understanding of these options will guide you in the right direction:
- Traditional markup - a combination of intuition and local competition. Don't rely on intuition alone - you'd be on to a loser.
- Cost plus markup - here, price is determined by adding a markup to the cost of the item. Easy to apply, this method is popular in the beverage industry.
- Item cost percentage markup - similar to cost plus pricing, but linked to profit targets.
- Type of establishment. Markup is often driven by the type of establishment. For example, luxury hotels, restaurants and nightclubs can command heftier markups. Bars and taverns, on the other hand, have to compete more fiercely with similar outlets in the locality.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
bar profitability,
NightClub Management,
bar business,
Bar Management,
opening a bar,
Increasing Profits,
pricing drinks
By Elizabeth GodsmarkAtlantic Publishing
This is an alarming fact: most types of beverage operations lose a crippling percentage of profits through insider theft. The vast majority of employees in the beverage industry are honest and hardworking; it is the small minority of staff that can ruin your business through dishonesty. Insider theft can often escalate if there are weaknesses in the following general areas of the operation:
- Lack of supervision. Theft from behind the bar, storeroom or storage areas is a major problem. Curb losses by increasing supervision, either in person or by means of strategically positioned security cameras.
- Proprietor attitude. Don't make matters worse by treating all employees with suspicion. Get the honest staff on your side.
- Weak management. Unfortunately, some beverage managers compound the issue of insider theft by turning a "blind eye" and simply increasing prices to cover "shrinkage." Owners need to question unwarranted price rises.
- Pouring costs A common danger area. These costs need to be carefully monitored, especially in relation to bartender productivity.
- Inventory records. This is one of the easiest areas for dishonest employees to "fiddle the books." Tighten up your record keeping. Never leave inventory control to one person. Double-check.
- End-of-shift cash count. Another prime target area for insider theft. Never let a bartender reconcile the cash in the register at the end of his or her shift.
Bartender Theft: Top Ten Ploys
Controlling theft behind the majority of bars is no mean task; eliminating it altogether is virtually impossible. Temptation is a fine thing, and unfortunately, the opportunity for bartender theft is overwhelming. However, in the interests of long-term survival, you have no choice but to tackle the problem head on. Be wary of the following top-ten common ploys:
- Open theft. A bartender pours a drink, doesn't ring the cash register and puts the cash in a "holding" place, such as the tip jar.
- Overcharging. Bartender pockets the difference. A variation is to charge regular prices but ring up "Happy Hour" prices and, again, pocket the difference.
- Ringing "00" on the cash register. The bartender simply steals the value of the drink.
- Overpouring. Bartender hopes to get a heavy tip.
- Underpouring. Bartender keeps a mental note of the number of half measures poured throughout the evening and then thieves the equivalent value in drinks, gives them away or drinks them him-or herself.
- Rounds of drinks. Bartender rings up for a "round" rather than separate items. It makes it easier to inflate the overall price of a round of drinks, particularly if guests are unfamiliar with individual prices.
- Shortchanging. Common variations include: counting aloud while handing the customer less money, distracting the customer by sliding the change along the bar, and giving change for lower -denomination bills (while keeping the difference).
- "Soft" inventory. Bartender neglects to charge for the mixer component of a drink.
- Substitution - bringing in own liquor. This is often done with vodka because it is odorless and looks like water. Dilution is another similar ploy.
- Padding the tab. The bartender pencils in an inflated total and later erases it, replacing it with the correct total. Warning! Ban pencils from behind the bar.
Less Common (But Equally Damaging) Employee Theft
The more experienced the dishonest employee, the better equipped he or she is to manipulate the system. Thieving members of staff are quick to detect exactly how much an owner really understands about the business. In the beverage industry, take nothing for granted. Alert yourself to the following, somewhat extreme, possibilities.
- Reusing closed tabs. The bartender appears to ring up the drink price but, in actual fact, only halfway enters the tab into the register. He or she then hits "0" to give the impression of ringing it in.
- Over-ringing. When the customer isn't looking, the thief over-rings an amount on the tab and then re-rings the tab for less than the amount charged.
- "Paid outs." The bartender claims that the money was refunded for various reasons, such as faulty cigarette machines.
- Jigger substitution. The bartender brings in his own shot glass that looks identical to the official jigger but is actually smaller. Several short measures over a shift add up
- Changing shifts. It is easy for the thief to make, serve and collect several drinks during a busy "hand-over" period.
- Deliberate mistakes. Drinks are then returned and resold or given to a friend.
- Breaking empty bottles and pretending they were full. Full bottles are then requisitioned to replace the "broken" empty bottles.
- Substituting water in the drip tray. The bartender pretends he or she had to waste a pint to clear the lines and then pockets the difference.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
bar inventory levels,
bar business,
Bar Management,
Reducing Costs,
bar control,
Control
By Elizabeth GodsmarkAtlantic Publishing
Part 4 of 4: Trim Liquor Costs
Liquor prices don't vary a great deal from one wholesaler to another. Packaging and size also tend to be fairly consistent. So, what can you do about reducing liquor costs in your operation? The answer is quite a lot! It's a misconception in the liquor trade that your options are limited when it comes to selling liquor. Consider the following opportunities:
- Bulk buys. Purchase staple liquors, such as whiskey, gin, vodka, brandy, rum and other popular spirits (e.g., fruit brandies) in bulk. They have a long shelf life and you know you can sell them within a reasonable period of time.
- Trends. Stay ahead of consumption trends. Respond quickly. For example, the current trend in the United States is toward "light" spirits such as 80-and 86-proof whiskies, instead of 100-proof (50 percent alcohol) bonded whiskies. Wholesalers, too, are keen to promote these alternatives.
- Distilled spirits. Their shelf life is exceptionally long. Buy distilled whenever possible, and minimize wastage.
- Well liquors. Which well liquors you choose can really make a difference in reducing costs. But don't buy at any price and compromise on quality.Your reputation is at stake. Customers often judge an establishment by the quality of its well liquor.
- Call liquors. Increase margins on call liquors (brand names). Guests who ask for Gordon's gin or Jack Daniel's whiskey, for example, are loyal to the brand and will probably not question the price.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
Hotel Inventory,
Liquor Inventory savings,
alcohol cost
By Elizabeth GodsmarkAtlantic Publishing
Part 3 of 4: Cocktails--Reduce Costs While 
Increasing Customer Satisfaction
Cocktails are good for profits, and cocktail hour can be serious, big business. The customer feel-good factor is crucial. This can be achieved at no extra cost. Imagination is free.
- Well brands. Reduce costs by sticking to well brands for cocktails. Don't pour away your profits by using premium brands in cocktail recipes.
- Premium brands. Your establishment might be the sort of outlet that can make big profits out of selling premium brands. If so, use premium or middle-grade ingredients in your cocktails. Take every opportunity to advertise that fact. Emblazon quality brand names across your menus. Also, speak to your suppliers - they may be interested in offering you reduced rates in exchange for some free advertising.
- Signature drinks. Use your imagination and create something really special. Above all, a signature drink must look special. Choose unusual colors. Use different garnishes, such as asparagus, pepperoncini, jumbo shrimp, crab claw or scallions. Stand out from the crowd.
- "Stirred, not shaken." Don't shake mixed drinks that contain carbonated ingredients, particularly if those components are clear liquids. The bubbles will go flat, and the liquids will become cloudy. Stir instead.
- Presentation. Dare to be different. How about serving Chambord on the side for a Meltdown Raspberry Margarita? Let customers pour the liqueur portion themselves. As the liqueur blends into the drink, it will release wonderful aromatic raspberry flavors. It will also look visually stunning. Guests will think, "value."
- Champagne. Many recipes use champagne as a base ingredient. Once opened, a bottle of champagne or sparkling wine becomes a liability, because the bubbles are short-lived. Buy a bottle sealer specifically designed to cope with this problem. Ensure that bartenders know how to use it. You can't afford champagne wastage.
- Ice. Choose a cocktail station that has a deeper-than-average ice bin (up to 15 inches, maximum capacity). Put a divider through the middle of the bin and use it for storing both crushed and cubed ice. When the bar is busy, hanging around waiting for ice supplies costs money.
- Speed. Reposition liquor, wine and soda guns directly above the cocktail station. The soda gun should be placed on the left-hand side of the station, so that the bartender's right hand is free to hold a liquor bottle at the same time. A bartender using both hands is working at top speed and maximum efficiency.
- Perceived value. Improve customer perception of value and quality by increasing the high-cost portion of the cocktail. Up the liquor content to two ounces. Guests will feel they are getting real value for their money; you know this is good for profits.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
liquor inventory timing,
restaurant trends,
liquor products
By Elizabeth GodsmarkAtlantic Publishing
Part 2 of 4: Make the Right Choice of Wines
Choice of wine is a very individual matter. There are no rights and wrongs. It is important, however, to pander to customer preferences. Whether you run a bar, restaurant, club or specialized wine bar, you must purchase wine according to the demands of your clientele. If you get it right, profits will soar. But, if you choose wines that aren't a hit with your customers, you end up pouring your profits, as well as the unsold wine, down the drain.
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Competition. Look at the competition. Keep up to date with which wines are moving well. Read trade journals and publications, such as the "California Wine Growers Institute," to learn more about current trends, or consult the California Association of Wine Grape Growers: 555 University Avenue, Suite 250, Sacramento, CA 95825; www.cawg.org.
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Regularly review the wine list. Be ruthless - if a wine is slow-moving, remove it from the list.
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Get ahead of the crowd. Introduce wines from up-and-coming wine regions. Suggestions include: New Zealand Riesling, Gewurztraminer and Sauvignon Blanc for whites, and South African Pinot Noir or Merlot for reds.
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Storage. Wine is a vulnerable product. One of the most effective ways of reducing costs and avoiding waste is to store wine in the correct environment (temperature, light and ventilation are particularly important). See www.storing-wine.com for handy tips on storing wine.
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Opened bottles. Establish par levels for each wine stocked behind the bar. Only open as many bottles as you need for one shift. All wines, particularly whites and cheaper house reds, become oxidized and deteriorate quickly once opened. A useful tip is not to pull the cork completely out of the bottle. If a cork is only partly pulled, the wine remains sealed, preventing oxygen from entering the bottle.
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Cost controls on empty bottles. Count empty wine bottles at the end of each shift. This practice makes sure that bartenders aren't overpouring. For example: you use six 1.5 liter bottles of wine during a shift; your standard portion for wine is 5 ounces; then sales for 60 to 61 glasses should show up on the register tape.
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Discount premium wines. Discounting premium wines results in a higher potential for profits. It also gives bartenders the opportunity to up-sell customers from standard house wines. This plan works well with "special buys" and wholesaler promotions.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
wine inventory,
red wine,
wine list,
white wine
By Elizabeth GodsmarkAtlantic Publishing
Part 1 of 4: Develop a Successful Beer Program
Beer is a major seller in most bars, clubs and liquor outlets; it accounts for a hefty percentage of sales. Draft beer is particularly popular. It can prove a lucrative area of any beverage operation, if you get it right. It is estimated that wastage, spillage, excess foam, overpouring, poor quality, theft, giveaways and other draft-beer-related problems can drain your operation of an amazing 20 percent of inventory. Never underestimate the scope for cost reductions in this area!
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Promotions. Beer is a perishable product. As draft beer expires quickly, always consider discounting draft beer before bottled beer.
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Computer-controlled draft beer technology. A good control system is essential. The best type of control is a flow meter attached to each tap. If your usage is over two kegs per week, then you could justify the installation of an electronic device that counts fractions of an ounce.
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Foam head. Control the size of the head and really make an impact on cost reductions. A good head of foam is essential, but it is up to you to control the depth of the foam. For example, in a 16-ounce glass, a half-inch head of foam yields around 136 glasses of draft per keg, whereas a one-inch head yields up to 152 glasses per keg. Add up the difference! Train all bartenders to achieve one-inch heads of foam.
-
Stop selling beer in pitchers. Pitchers sell at a lower profit margin than beer by the glass. Although pitchers are a better deal for customers, they do little for your profitability. You're far better off selling four glasses of draft than one pitcher of beer.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
Draft Beer,
beer inventory,
Beer stock
By Elizabeth GodsmarkAtlantic Publishing DRINK MIXESJust because mixes aren't a drink's main ingredients, one shouldn't ignore their impact upon your operation's profitability. There is considerable scope for trimming costs in this area. Despite being sold in small portions, drink mixes have a high overall sales volume; it is also predictable and consistent. Review the range of drink mixes used in your establishment. It all helps to reduce costs.
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Fresh orange juice. It is worth investing in a good commercial juicer for orange juice. A handy tip is to rinse oranges under hot water before placing them in the juicer - the juice yield will be higher.
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From scratch drink mixes. Preparing a whole range of drink mixes from scratch is too time-consuming, and all too often, results in inconsistent quality. You're better off buying ready-made mixes. Test samples of mixes before making a decision. Prepared mixes can vary considerably in taste and quality.
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Cut garnish costs. Your choice of garnishes to accompany drink mixes can, quite literally, eat into your profits. Bartenders are notorious for nibbling olives, cherries, pineapple wedges, chocolate shavings, peppermint sticks, pretzels, etc. Remove temptation. Store garnishes in airtight containers in a cooler, away from temptation. Also, establish par levels for fruit garnishes and only prepare enough for one shift.
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Unusual juices. Use single-portion 6-ounce cans for less-frequently-served juices. Trade higher cost for reduced wastage, time saving and convenience.
BOOST PROFITS BY CHOOSING THE RIGHT DRINK RECIPES
The recipes you choose to feature on your drinks menu must do more than satisfy customer requirements. Plan carefully; a lot of thought needs to go also into keeping costs down, while at the same time maintaining a fine reputation for quality and imagination. This is no mean task, but the following simple suggestions may help:
-
Communicate your recipe preparation techniques. Add a brief description about your unique preparation techniques underneath each recipe on the drinks menu. Tempt your customers to try "something different." The secret lies in your method of communication, rather than in the actual recipes themselves.
- Highballs. Although highballs can be served in a variety of different-sized glasses, the ideal size for maximum efficiency and controlling costs is a 9-ounce glass. It accommodates the exact proportions for a standard highball recipe. The glass looks full to capacity; the customer is happy. Also, you know that the portions of ingredients are correct.
- Recipes on napkins. Dare to be different. Get some recipes you want to promote printed on napkins. It's different, and it's a good marketing tool. It also channels customers into ordering the recipes that you want them to buy. Choose the "special" recipes on the basis of higher profit margins, but promote them as "added value" recipes.
- Mobile mini-bar. As well as serving recipe drinks from the main bar, introduce a mini-bar on wheels. Get a bartender to wheel it around, selling "taster recipes" at promotional prices. The spontaneity of this approach is excellent for generating extra income.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
Bar Management,
drink recipe,
Drink Recipes
By Elizabeth GodsmarkAtlantic Publishing
Well liquors are probably the most important products in any successful beverage operation. Approximately 50 percent of a typical bar's liquor depletion comes from well liquor. Therefore, how you select, handle and sell these liquors is crucial to the long-term sustainability of your operation. Bear in mind the following:
- Avoid supplier "come-ons." Suppliers are always keen to off-load excess stocks of well liquor. Only succumb if you think that you can easily sell the extra volume at a significant profit.
- Quality. Consistency and quality of well liquors varies considerably. Two factors are really important when choosing which well liquors to sell: quality and cost. Select well liquors that exactly match the quality expectations of your clientele. If your customers are picky, you cannot skimp on quality. It would cost you too dearly.
- Sequence. The traditional liquor sequence (bourbon, whiskey, gin, vodka, rum, tequila), where dark liquors are separated from light liquors, isn't the most cost-effective method of sequencing your well liquor. Try the more modern approach. Alternate light and dark liquors, e.g., gin, bourbon, vodka, scotch, etc. It reduces costly wastage. Bartenders are less likely to mistake one well liquor for another.
- Well liquor grade. Match the grade of well liquor to your type of establishment. No need for costly overkill. For example, exclusive clubs may have no choice but to sell predominantly premium brands. Less image-conscious outlets can reduce costs by selling semi-premium or pouring brands.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
liquor inventory,
well liquor,
liquor products
By Elizabeth GodsmarkAtlantic Publishing 
A lot depends on your location. Some states have an almost monopolistic control over alcohol distribution; other states operate by licensing wholesalers. You need to familiarize yourself with county and local laws. They vary considerably from state to state. So, where do you start?
- Source a supplier. Take a look at your local beverage trade publications or Yellow Pages for a list of suppliers and wholesalers. The chances are you'll need to deal with several suppliers in order to get the full range of beverages required by your establishment.
- Service.As well as competitive prices, also look for exceptional service from your suppliers. For example, do they offer "emergency" deliveries at no extra cost to their regular customers? Time out to collect extra stock involves you in extra expense.
- Visit warehouses. Before deciding, visit a few different warehouses to see how they operate. More important, do they handle their stock with care? Bear in mind that returning faulty or poor merchandise can be time-consuming and expensive. Also, customer dissatisfaction is hard to quantify.
- Beware of hidden charges for minimum orders. Choose only a supplier that does not penalize you for minimum orders.
- Pool buying. If pool buying is legal in your state, choose a supplier that will give you the biggest savings. Negotiate, but don't compromise. Get a written quotation first.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Atlantic Publishing Company
Amazon.com
Topics:
Bar inventory,
bar supplies,
hotel supplies
By Elizabeth Godsmark
