The average bar loses 20%-30% through spillage, missing inventory, unauthorized giving away of drinks, and outright theft, according to Bevintel, bar inventory management experts. “Liquor can account for 25%-30% of revenue, sometimes even more. It’s very profitable and is something that can easily disappear, so having controls in place is critical,” explains John Buchanan, president, Lettuce Consulting Group. “There are checks and balances for every other position in the restaurant and there should be at the bar as well, especially when you consider that there’s often one person – the bartender – who takes the order, serves the customer, and handles the cash as well as inventory.” Things to consider:
SECURITY John says being disciplined is key. “The perfect example of an undisciplined business is not having the room where alcohol is stored locked at all times. I am constantly amazed at how often these doors are unlocked – it’s sloppy and naïve not to keep this valuable inventory locked away,” he says. ”In some establishments where owners tend to be on premise a lot, owners say they have a close bond with their employees, they trust their staff – I say lock the door anyway.” Ben Miller, general manager, Paris Club, Chicago, IL, agrees. “It’s not about trust, it’s about knowing what’s going on in your business.”
“The bar is the main area where a restaurant can leak dollars. If you’re not trying to increase your bar business and your control over it, you’re crazy.” – Ti Martin, co-proprietor, Commander’s Palace, New Orleans, LA
CHECKS AND BALANCES “We’re constantly using checklists to hold staff accountable,” explains Ben. “For example, managers have a checklist they refer to at the beginning of each bar shift to make certain everything is in place, (i.e., fresh cut limes, lemons, and other garnishes) and that the bar is properly stocked.” John says, “Checklists can help identify problems before they get out of control. At the very least, you need to do a monthly inventory and calculate your costs.” He points out that a recurring problem is having too much product on hand which can be caused by delegating purchasing to a less-experienced staff member who is susceptible to salesmen’s pitches. “Purchasing alcohol is a critical function and should be handled only by management,” John advises.
INVENTORY CONTROL SYSTEMS Commander’s Palace, New Orleans, LA, tracks alcohol usage not only at the bar, but alcohol that leaves the bar for a non-bar purpose. “For example, our kitchen uses a fair amount of liquor and kitchen staff are required to write down what they remove in a log book kept at the bar – this way costs are assigned to the proper areas,” says Ti Martin, co-proprietor. “To monitor and control liquor costs, every Wednesday a team from Bevintel, our bar management company, runs an inventory of every drop of liquor,” says Steve Woodruff, managing director. “They have our drink recipes in their software and they tell us how much of each type of liquor has been sold and how much is in-house – they weigh open bottles – and we get a report on what was lost or gained by servings, percentages, and dollars.” While one could manage this type of inventory in house, Steve says that all too often in the real world there’s a crisis du jour, plus it’s laborious and tedious. Ti adds that at the monthly meeting of managers, who are paid partially on meeting and exceeding projections, there’s an additional incentive and peer pressure to do well. “No one wants egg on his or her face.”
TRAINING, TESTING AND RE-TRAINING Poor training and lack of periodically testing bartenders on their ability to make drinks according to your recipes leads to bad practices, warns John – one of the worst of these being free pouring. Ti says, “If we notice a bartender’s pour is off – either by watching or by looking at our weekly report – we break out the glass with the line and have the bartender use it until he or she is back on track.” Suzanne Freedman, director of on-premise Pernod Ricard (sponsors of the BarSmarts bartender education and certification program) agrees. “Jiggering is a lost art – not only are you able to make a consistent drink over and over, you’re controlling the exact amount of alcohol and the cost of the drink is steady.” Helen Mackey, director of beverage strategy, Ruth’s Hospitality Group Inc., recently had over 60 of the company’s bartenders complete the BarSmarts Wired online education program. “We find that a bartender who has confidence via education has better relationships and connections with guests, and sales increase naturally. Now more than ever, upgrading the education of bartenders is important because guests are knowledgeable and interested and want to learn more,” says Helen. Suzanne reports seeing an increasing number of restaurants mandating training for their bar staff and adds that while BarSmarts online training is priced at $29 per person, if bar managers or owners want to put their entire staff through training, there will be no charge.