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Bar IQ

Drink Consistency Leads to Steady Profits

November 8, 2011 By: Robert Plotkin


Product consistency is as crucial to profitability behind the bar as it is in the kitchen. The drinks you serve should taste the same regardless of the night or who’s behind the bar. Otherwise, your staff may be serving a product that is different in taste, cost and presentation from what you originally intended. The result is financial chaos.

For example, let’s say you recently introduced a specialty Margarita that has become so popular it’s a signature drink on your bar’s menu. The cocktail features a premium brand of reposado 100% agave tequila, equal parts of Cointreau and Grand Marnier, a splash of ruby red grapefruit juice and fresh lime sour mix. The drink costs $2.64 and sells for $10, which yields a 26.4% cost percentage and gross profit of $7.36. Especially in today’s economy, devising a cocktail with a brisk sales volume that generates such a healthy amount of profit is optimum.

Unfortunately, concept often breaks down in execution. As it turns out, the cocktail your bartenders are preparing is different than the drink you devised. Instead of the jigger of tequila the recipe calls for, the bartenders are pouring 1¾ ounces. Likewise, instead of a 1-ounce portion of Cointreau and Grand Marnier, they’re using a combined 1½ ounces. Although in each case the variance is a mere ¼ ounce, the impact on your financial bottom line is significant.

As it turns out, the cocktail your bartenders are preparing costs the business $3.68, which is 40% higher than your version, and because they’re selling the drink for the same price, the bar’s gross profit decreases 14% to $6.32, a difference of more than $1 per transaction. Perhaps losing $1 in profit doesn’t sound like too much of a hit. Well, consider the long-term ramifications. If on average your bar sells eight of the specialty Margaritas an hour from the beginning of happy hour until the bar closes — a total of 10 hours a day — that equates to an annual loss in profit of $29,200.

Additionally, that figure doesn’t factor in the impact serving a drink that contains an extra ¾ ounce of 80 proof alcohol will have on potential sales and public safety. The bartenders’ version has 30% more alcohol than what your recipe calls for. Guests can safely consume fewer cocktails containing 3¼ ounces of alcohol than those that have 2½ ounces. Not only do overly potent drinks inevitably cost you potential sales, they also place the public at risk.

Wrenching Order
Inconsistency behind the bar leads to fluctuating costs and hit-or-miss drinks, which is why it’s important to ascertain firsthand if your bartenders are pouring the same recipes and charging the same prices. It doesn’t require installing a surveillance system or hiring spotters or a shopping service. No, the information is yours for the asking.

Schedule a bar staff meeting and give them a written test of sorts. Ask the bartenders to provide recipes and prices for the 10 to 20 most frequently requested mixed drinks at your bar. The best-case scenario is that their answers reveal that they’re all operating from the same page of the playbook. However, more often than not, these tests reveal that there’s little consensus among the bartenders as to how to prepare and portion basic cocktails, what glasses the drinks should be presented in, how they should be garnished and what prices should apply.

If the test results you obtain are along these lines, worry not. Unless your bartenders are crazed anarchists, they won’t much care for having their lack of professionalism exposed. After explaining what operational difficulties the business is experiencing from the lack of drink consistency, you’ll likely have their undivided attention.

After the bartenders are shown that they’re not preparing the same recipes, the next step involves establishing what recipes they’ll be asked to pour. It’s a positive step, a forward-looking process in which the bartenders will play a pivotal role. With few exceptions, most bars need to have set recipes for about 40 to 50 drinks. Challenge the staff to determine what those recipes should be. Conduct tastings of the various recipes vying for each slot. Make a night of it, invite guests and serve hors d’oeuvres or light fare.

At the end of the process, you’ll have a revamped, reborn and reinvigorated beverage program featuring a set of drink recipes in which the bartenders feel a sense of ownership. Not only will consistency improve, you’ll also likely notice that they have a better attitude presenting the drinks they prepare because of their role in the creation of the recipes.

Afterward, review your pricing structure to ensure it still makes financial sense. Changing recipes typically involves changing portioning, which in turn changes drink costs. Once the new recipes have been assigned sales prices, reprogram your bar’s point-of-sale system and throw open the front door.


WHAT AFFECT DOES CHAOS HAVE ON THE BOTTOM LINE?

Example 1:
Signature Margarita — House Version
1½ oz. 100% Agave Reposado Tequila $1.03
½ oz. Cointreau $.65
½ oz. Grand Marnier $.61
½ oz. ruby red grapefruit juice $.09
1½ oz. Fresh Lime Sour Mix $.26
Drink Cost $2.64

$2.64 drink cost ÷ $10.00 sales price = 26.4% cost percentage
$10.00 sales price - $2.64 drink cost = $7.36 gross profit

Example 2:
Signature Margarita — Bartenders’ Version
1¾ oz. 100% Agave Reposado Tequila $1.44
¾ oz. Cointreau $.98
¾ oz. Grand Marnier $.91
½ oz. ruby red grapefruit juice $.09
1½ oz. Fresh Lime Sour Mix $.26
Drink Cost $3.68 (+40%)

$3.68 drink cost ÷ $10.00 sales price = 36.8% cost percentage
$10.00 sales price - $3.68 drink cost = $6.32 gross profit (–14%)


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