Restaurant dine-in with restrictions has returned to just about every state, with some counties in California, Colorado, Illinois, New Mexico, Oregon, and Washington retaining outdoor service only. There is a light at the end of the tunnel, but that light is dim, at best, for some.
As anyone in the restaurant industry knows, profit margins are thin, generally running between 2% and 6%. Operating them in reduced capacity mode results in even less revenue, with many failing to net a profit. While some restaurants have successfully segued into a takeout and delivery model, now, more than ever, every order counts.
The Restaurant Business Model
In the restaurant industry, profit is made in the extras. Sides, appetizers, desserts, and drinks make the difference between profit and loss. The pandemic has altered the basic functionality of this business model. Appetizers, desserts, and drinks don’t always travel well in to-go containers.
The way forward and through the pandemic will require rethinking about menus, pricing, and promotions. According to a report by McKinsey & Company, it could take more than five years for the most affected sectors, such as food service, to get back to pre-COVID-19 levels.
There are a few benefits that have erupted from the pandemic. In-app ordering for table service may be here to stay—operators found out that customers order more when they place their order via an app—and people like to order specially made cocktails with their takeout meals. While many states lifted bans on-to-go alcohol to help operators stay afloat during the pandemic, some states have made the practice permanent. A few of the states permanently legalizing alcohol delivery include Ohio, Oklahoma, and Iowa.
Another approach that is helping restaurants succeed going forward is taking an in-depth look at their beverage program. The industry’s most profitable segment needs some attention, and restaurants are turning to the experts in this field, the beverage consultant, to help them find needed solutions.
The Restaurant Beverage Consultant
In the restaurant industry, bars earn the highest profit margins. Food costs can be 10-15% higher than liquor costs, and the markup on alcoholic beverages is much higher and varies according to the type of drink. The average liquor cost is 18-24%, while the average food cost is 28-32%.
While some brands are fortunate and profitable enough to have a full-time beverage manager on staff, these are fewer and farther between since the viral siege. In their place, operators are turning to beverage consultants that, for a specified fee, redesign their beverage program by creating an efficient, appropriate, and profitable liquor and drink blueprint.
Like all freelancers, each beverage consultant has their own specialty, likes and dislikes, and processes. When choosing a consultant, operators need to ensure that they are aligned with the brand’s vision and understand the restaurant’s needs and goals. Here are a few things to look for when choosing a beverage consultant.
- Set Up a Consultation – Some beverage consultants have learned the fine art of conversation, including listening, while others have not. While looking for a consultant’s expertise, most restauranteurs also have their own approach and preferences. Choose a consultant that takes the time to converse and set up a process together, rather than one that arrives with a preconceived plan already in place.
- Initial Assessment – An experienced beverage consultant takes the time to evaluate a restaurant in terms of demographics, check averages, seasonal and promotional menu changes, target customers, and most valued guests. A consultant can determine if a location is better suited for flights of craft beers, local wines, alcohol-free selections, or innovative craft cocktails from this initial assessment. Or, possibly, all of the above.
- Increase Profits – Reducing costs while increasing profits is one of the goals of a beverage consultant. To this end, streamlining the beverage program plays a significant part in their role. Their goal is to increase sales while creating a program that staff can facilitate. Education, cost tracking, and producing the beverage menu should all be a part of a consultant’s platform. Creating innovative recipes with fresh ingredients that pair well with the cuisine can make a brand’s reputation.
- Cost and Inventory – A beverage consultant prepares a restaurant for success by ensuring they understand pricing, inventory, and budget forecasting. Pricing according to the cost of goods sold (COGS) and setting up an inventory process that ensures daily counts and limits theft are just two of the duties an operator should enquire about.
- Education – An educated staff is one of the most important elements in a successful beverage program. A consultant should have strategies or software apps such as Tipzyy to complete this goal. An educated staff increases sales, promotes upsells, and pours according to precise measurements.
In the end, a successful beverage consultant can increase profit margins, boost satisfied customers, and promote a brand—important considerations in today’s changing restaurant landscape.