Managing Costs Through Difficult Times
More Strategies for Controlling Costs in Store in Las Vegas

Editor's Note:
This is the first article in a series of four relating to must-see Millennium Advisory Board Panels that will be speaking at International Hospitality Week (www.internationalhospitalityweek.com). The show will be held March 2-5, 2009 in Las Vegas.

Successful operators are just that: successful, because they plan ahead to ensure success through difficult times. Today's economy has had an impact on the amount of money being spent by guests going out. Due to this, operators must make smart moves to save costs and increase efficiency to improve the bottom line without compromising quality.

"Managing Costs Through Difficult Times" will be the topic for panelists Debra Cantu, director of beverage procurement for Brinker International; Stan Novack, vice president concept development for HMSHost; Cindy Busi, worldwide beverage director for Hard Rock International; Tim Johnson, vice president purchasing and beverage for Champps Americana; and "Magic" Mike Werner, chairman of ShowTenders Inc. at the show in Las Vegas.

I will moderate the panel and share OSI Restaurant Partners' many different initiatives for saving in these difficult times. In addition to my own insights, following are points from each of the panelists that will be covered more in depth.

Brinker International is working with its supplier/distributor community to create synergies across all Brinker Brands to maximize purchasing power. The company is also working on a training initiative that focuses on the power of selling to drive beverage sales, product optimization, innovation, bidding, online ordering, and efficient ordering processes to offset fuel and minimum order surcharges.

HMSHost is working on a variety of items such as tap dynamics tests, cost containment, technology and training. As for cost containment, the company is looking at all aspects of the business such as what the company is purchasing, how items are being purchased and what can be changed.

"By systematically examining this area, potential savings could be in the millions," Novack says.

As far as technology, HMSHost is researching items that improve productivity and flow-through, while aiding with increased sales. The company's training program encompasses management and staff with a focus on the basics of the business.

"In other words, its restaurant management 101," Novack says.

Hard Rock International has created an inventory control system which addresses how to maximize usage and save time doing inventory. The company is consolidating products through distributors for mass volume and looking at buying-synergies with multi-concepts. Hard Rock also focuses on bartender consistency in pouring and mixing through training.

"Training is the key to efficiency in running any restaurant and it all starts with getting back to the basics," Busi says.

Champps Americana is focused on verifying costs.

"Cost verification on core beverage items is essential to a smooth, consistent and profitable beverage program," Johnson says. "We are fortunate — or not — that 44 percent of our units are in a control state. We can therefore verify all spirit costs through the NABCA. Our spirit programs in open states, as well as our wine and beer in all states, will be verified and compared to the 'agreed to' cost via a program we developed for our food purchasing — a 'market basket' for beverage, if you will. Once this is instituted, we will be able to review each month's purchases and where deviations occur and obtain credits on a unit-by-unit basis."

Showtenders Inc. works with its clients addressing "First Approach Techniques" to help get second orders, how to set up their bars to focus on their 15 top-selling cocktails, skills needed to prevent waste and make consistent drinks quickly, "What & How" to practice to set execution times and standards for the guests, ways to keep staff longer through training to reduce turnover costs and "Cocktail College," an on-line training program due to launch at the Vegas show.

Learn more from this panel of experts by seeing them speak in person at International Hospitality Week.

In December, NCB will feature "Beverage Trends: The Future of the Cocktail" by Millennium Advisory Board beverage experts David Commer, president of Commer Beverage Consulting; Doug Jackson, senior director of Beverage Development for Darden Restaurants Inc.; Randy Steinbrenner, beverage marketing for Tony Roma's; and Tony Garcia, president of Mix It Up.

Richard Verrechia is director of beverage with OSI Restaurant Partners.