It’s common knowledge that alcohol sales can be very profitable in a restaurant. After factoring in the cost of labor, storage space, and food waste, in addition to already better cost of sales, increasing beverage sales and running a cost effective bar program is a great way to bring more money in, both to the top and the bottom line. But too often, especially with the trend toward Chef driven restaurants, the bar program is an afterthought. Few bar programs truly fail, but most could be doing more for the business. In my experience, creating an effective beverage program comes down to three things: balance, cost effectiveness, and uniqueness.
Balance is probably the most important factor, and one that is far too often overlooked. In order for your bar to bring money into the top line, your guests have to actually order the drinks. Too many bar programs now focus on “mixology” or “classics” or “wow” type cocktails, at the expense of balance. While it’s great to have some high priced, high margin, or really amazing drinks, if only one person at a table of four sees something they would actually enjoy, you’re leaving 75% of your potential bar revenue on the table, so to speak. We’ll get to creating unique drinks later, but remember, never sacrifice a universal appeal for the sake of staying “on brand.” It is possible to do both, but getting as many drinks in the hands of as many people (of the legal drinking age, of course) as possible should always be priority number one.
A common mistake is for a bar manager to come up with, or to ask the staff to come up with, a plethora of cocktails, and then pick the “7 best” or “10 best” to go on the menu. This is a great start, but the next step is to look at those cocktails (however many you decide to put on your final menu), and see if they cover all of your bases.
The most common way of doing this, which is fine, is to pick a certain number of drinks from each spirit category that you’d like to see on the menu. This can be based on the idea of covering each of the most popular categories (whiskey, rum, gin, tequila, vodka), and can also take into account the season (more dark spirit cocktails in the colder months). This is a great way to start.
A better way of approaching it, though, is to quit thinking as a bartender, mixologist or bar manager, and putting things by categories (base spirit, classic vs. original, cocktail vs. mixed drink), and start thinking about customer tastes.
For instance, it’s great to have a vodka and a bourbon cocktail on your menu. If your bourbon cocktail is bourbon, lemonade, and soda water, though, it is a light, refreshing, fruity cocktail. It appeals to similar types of drinkers as a typical vodka cocktail.
If you have a decent sized FOH staff, a great way to test if your cocktail list is actually balanced is to have everyone taste all of the cocktails. Every employee, regardless of their personal preferences, should be able to find a drink that they love. If you have an employee or two that don’t like any of your drinks, make it a personal challenge to create one they do like.
Another area where balance is important is price. Yes, in an ideal world, seven nights a week, you could get every person in your restaurant drinking a $12 cocktail, beer, or glass of wine with a 17% cost. In real life, though, you make more off of a person drinking a $4 Miller Lite at a 24% cost than you do if the same person chooses to drink water.
You can absolutely push guests toward higher priced and higher margin items, but remember that your goal should be to get an alcoholic beverage (preferably more than one), in every guest’s hands. Use menu placement and marketing to highlight higher priced and higher margin items. But also have more value-friendly options available for your guests. If you are worried that if you put Miller Lite on the menu, someone that otherwise might drink one of your cocktails or a craft beer will choose Miller Lite, you probably need a stronger cocktail and beer program.
The same is true with wine pricing. If you are going to offer two to three by the glass reds and the same number of whites, stagger the pricing! The other side of balance with wine pricing is to make sure that you have some premium options available by the bottle. Depending on your concept, that could be a $4,000 bottle, or a $75-100 bottle. Owners and investors hate sitting on inventory (especially of high priced items). What they should hate is the thought of not having a premium sparkling or red wine (or rare bourbon, scotch, or cognac) on hand when someone is in the mood to hand over twice your average check for one beverage. Your whole list doesn’t need to be 25 year scotches, Napolean cognacs, and rare wines. But there should absolutely be one of each available.
Hopefully you found this perspective valuable. Remember, the key to bringing more to your top and bottom line through the bar is to get alcoholic beverages in front of as many guests as possible. This makes a balanced program (with something for everyone) key. That doesn’t mean you have to sacrifice cost effectiveness, or the uniqueness of your brand. Come back next week to see how to work effective costing into a balanced program.