IC For IndependentsMarch 1, 2009 By: Michael Harrelson Night Club and Bar Magazine
Who says foolproof inventory control is only within reach of the larger chain operations with the cash flow to afford all the fancy bells and whistles?
Not John Bunge, owner of Will’s Northwoods Inn. But he’s not a do-it-yourselfer. He credits bringing in a hired gun with turning around his beverage operations and putting this neighborhood bar, located just six blocks from Wrigley Field in Chicago, on a path to profitability.
Bunge engaged Bevinco franchisee Ken Gillie to provide beverage inventory management services. Rather than selling technology in the form of a system to operators, Bevinco, with offices in 250 cities around the globe, goes to a venue and conducts beverage inventories on a regular basis.
“What we find is that taking inventory and using inventory control systems is time-consuming and challenging [for the operator],” Gillie says. “It’s best left to pros who do it for a living. We have field auditors who go on-premise and conduct full audits. They measure every ounce of beer, all alcoholic beverages — liquor, wine and draft beer. We even count Red Bull and mixers.”
While most systems measure a pour cost, Gillie says Bevinco takes a different approach.
“Our system is focused on the portions or the volume that has been used and may be missing.” The distinction, Gillie says, offers operators much more than just a general idea of whether pour costs are within a profitable average.
“Products have vastly different mark-ups per unit, and ideal pour costs change from day to day. They can vary from as low as 14 percent to as high as 30 percent, so if you are just measuring pour costs, it is not enough to prevent over pouring and theft.”
“We had to get a better handle on what we were using in the ways of beverage, and where it was going,” Bunge says. “Bevinco came in and taught us the system, and it has had a positive impact on our operations.”
Even better, Bunge says the technology is easy on the pocketbook of a small owner such as himself.
“It does not cost us a dime in terms of up front costs.”
Bunge simply writes the audit team a check at the end of each weekly visit. “They do not charge a flat fee,” he says. “We are billed based on the volume of inventory we have.”
Significant improvements have been realized in reorder accuracy, says Will’s bar manager Kevin Kruse.
“We would order what we thought we need, which was usually too much,” he explains. “So it ended up sitting on the shelf. Now, we know how much we use, and how much to order. Our up-front costs are definitely better than in the past.”
Both Bunge and Kruse also appreciate that the inventory management numbers they get are derived from an independent source, rather than coming from a staff source.
“We don’t want employees doing that,” Kruse adds. “Otherwise, we would be in the same situation as before.”
For his part, Kruse uses the information derived from the scanner technology and reports, which is as accessible as the nearest computer, to make better decisions on the cocktails and beverage brands marketed to patrons on special during happy hour promotions.
“We know we can do certain specials and still do okay profit-wise,” he says. “We know where we are making our money.”