Food & the Bar Part I: Increasing Profits with Small Plates

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Offering food to your bar patrons is a critical element of your success.  Doing it well can be one of the toughest challenges in the business.  Kitchens can require lots of expensive square footage and equipment.  Finding talented, reliable staff sometimes seems impossible.  Many of your ingredients are highly perishable.  What do you get for all that effort and expense?...Margins that can be 25 points less than your margins at the bar!

Fear not.  A sensible, well-executed menu can have a significant impact on results.  The little bit of money made on food can lead to significant profits from the increases in beverage sales that result.

In Part 1 of this four part series on food and the bar, we look at the many benefits of what just might be your best option.

A CASE FOR SMALL PLATES

Developing a small plates menu for your bar can go a long way toward eliminating the pitfalls of operating a kitchen, while at the same time increasing patron satisfaction with your offerings and the efficiency with which you deliver them.  Here are some reasons why you should put one together now.

Small plate, or tapas-style dining, has been around for a really long time.  A preferred method of dining in Spain, it reached our shores some years ago and while never really reaching fad status, it certainly has embedded itself into the mainstream of American dining.  There are a number of reasons for this, some focused on the consumer, others on the operator.          

From the Consumer’s Perspective:

  1. Small plate dining is more social.  This fact adds to the kind of environment you want to foster at your bar.  Groups are likely to order many small plates, sharing their food as well as their impressions.
  2. Small plate dining is more entertaining.  As with the delivery of an impressive cocktail across your bar, unique small plate items will generate excitement from the patrons that order them as well as other customers in the general vicinity.
  3. Small plate dining allows for greater experimentation.  This is especially attractive to certain market segments, especially those attracted to craft cocktail bars.  They are searching for excellent, interesting and different drinks.  They are looking for the same things in food.
  4. Milennials love social, entertaining and experimental.  These are three characteristics of small plate dining and they squarely hit the preferences of this large and important demographic.  They are more likely to eat out in groups than as couples and want a dining experience that can be shared among their group.  They also have a clear preference for new, unique foods.  There are large pieces of other demographic segments that share these preferences.  Together they make up the bulk of your customers.  You should give them what they like.

From the Operator’s Perspective:

  1. The menu can be small.  As long as your offerings are interesting and diverse, there is no need to offer a full menu to realize excellent sales volume.  This reduces food inventory and subsequently carrying costs and losses from spoilage.  Smaller menus can be executed by staff with less experience and expertise.
  2. There is no need to sequence food.  Timing appetizers, soups, salads, entrees and desserts can be a near impossible challenge – complicated even for the most seasoned kitchen professionals.  Unlike full, multiple-course meals, small plates can be made and served as soon as they are ordered.  This just –in-time style of production increases the number of items that can be produced during a given period, increasing overall sales volume.  It can also, as with smaller menus, be accomplished with less experienced and less expensive kitchen staff.
  3. Food cost on small plates is lower.  The single largest cost of any entrée lies in the protein, or the center of the plate.  Especially meat and seafood have risen in cost and American consumers still expect large portions of each when ordering a full meal.  Many operators have absorbed these increased costs, correctly concluding that their customers won’t pay the higher prices necessary to maintain margins.  Small plates can include small portions of these expensive proteins or none of them at all, allowing for lower cost and higher margins.
  4. Patrons spend more on small plates.  Research indicates that average guest checks are higher for guests dining on small plates than for guests ordering their own full meals.  Small plates carry a relatively low purchase price, functioning to encourage guests to keep on ordering.  Anecdotally, some operators report sales volume increases as high as 25% after switching to small plates menus.
  5. Patrons stay longer when they are eating.  Jon Taffer says that when bar patrons are eating, they will stay in your establishment for 52 minutes more than when they are not.  It’s difficult to get people into your establishment.  It’s important to keep them there and sell them more when they arrive.  Margins on food are relatively smaller than those on beverage, but there is a very positive impact on overall profit when your patrons order one or two drinks more per visit.  Food will do that.

TAKEAWAYS

Small plates menus offer what is likely the great majority of your target market just the kind of experience they prefer.  They foster an eating and drinking environment that is social, entertaining and experimental.  Patrons are likely to stay in your establishment longer and spend more while there.  Money can be made on food sales, but the real profit comes from increased beverage sales.  Small plates tend to have lower cost of goods and are easier for kitchen staff to prepare and deliver in a timely manner.

Part two of this four part series can be found here - Food and the Bar Part II:  Increasing Profits with Small Plates – A How-to

Back by popular demand Author & Professor Brian Warrener will once again be presenting at the 2016 Nightclub & Bar Show. Join our mailing list to make sure that you receive all of the show updates here