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Tag: beverage costs

6 Effective Ways to Control Your Beverage Costs

Beverages, both alcoholic and non-alcoholic, can eat up a substantial portion of your monthly budget for your restaurant or bar food services. They are one of the supplies that are difficult to control in terms of costs as well. This is because possible inadequate pricing, spills and waste, and over-pouring make it hard to control the expenses that come with serving beverages. 

If you own a restaurant, bar or café, below are several tips shared by leading beverage wholesalers to help you control your beverage costs and increase your profits:

1.   Order beverages in bulk

If you always sell the same beverages, order them in bulk. Distributors always aim to sell more products so they are likely to offer buy-in-bulk promos and discounts. 

Through these special deals, you will save money on your purchases. This is a good start to keeping your beverage costs down; since you pay less for the product, your beverage cost percentage will be lower as well.

2.   Price your beverages carefully

Whether you are about to open your business soon or you’re thinking of updating your menu, when you start pricing your beverages, think about competition and profitability.

Keep in mind that if your drinks are too expensive, you will drive away customers and have difficulty attracting new ones. But if your drinks are too cheap, you will end up losing money and possibly going out of business.

To correctly price your drinks, compute your current beverage cost and compare it to the industry standard of 25 to 30%. If your average beverage costs are near or within the range, your drinks are reasonably priced.

However, you will likely see a variation in beverage cost across the products you have due to other factors such as your location and client base, so consider them as well.

3.   Be consistent with your serving sizes

In case you serve fruit juices, sodas, and other types of beverages by the glass, make sure your staff pours the right amount for every order.

Using the same glassware for these products will allow the staff to be consistent with the beverage serving size. In case your current glassware comes in different sizes, it would be best to stick to only two or three types. By doing so, the staff won’t be confused by the serving sizes. 

Being consistent with the serving sizes also helps with customer satisfaction, similar to following the same portions by weight for serving steaks.

4.   Conduct regular inventory

As a business owner, keep in mind that you won’t be able to use any money you spend on your inventory towards other expenses. You, therefore, need to keep track of how many and the variety of products you have. By doing so, you will avoid overstocking or understocking, and you will be sure that you always enough of the products that actually sell.

In addition, by conducting regular inventory, you will immediately be aware of any product losses and take the necessary steps to prevent this from occurring again.

For food and beverage business owners, it is highly recommended that you conduct an inventory at least every two weeks.

5.   Share the results of your inventory with your staff

Every time you complete your inventory, set a meeting with all your employees and share the data with them. However, make sure you do this in a non-threatening or non-confrontational way.

Your goal for sharing the information with them should be to educate them and get their suggestions for finding ways to reduce waste and control beverage costs.

6.   Instruct your staff to record spills and complimentary drinks

Complimentary and spilled drinks increase your beverage costs. It can be hard to avoid these circumstances since your staff will accidentally spill drinks from time to time. They will give occasional free drinks to loyal patrons as well.

Aside from instructing your employees to be more careful when pouring and serving drinks, tell them to record these instances. Instruct them to keep a record or note of all the complimentary drinks they give out in the POS. When there are records of these, you will be able to keep track of what percentage of product loss goes into such.

Lastly, to control your beverage costs, give your employees a limit of how many free drinks they can give out. Make sure you monitor the total amount spent on free drinks each month as well. By doing this, you will see when your expenses on complimentary drinks are getting too high and take the necessary actions to reduce them.

As a final tip, hiring experienced and trustworthy employees will also help you keep beverage costs to a minimum. So the next time you hire new workers, make sure you go the whole screening and recruitment process and select only the most qualified candidates.

AUTHOR BIO

Jad Asaad is the Marketing Manager at Horeca Trade LLC with more than eight years of experience in digital, online and offline marketing. He started his career in Beirut working in a creative agency and then moved to Dubai to further expand his career. He created and implemented award-winning high-impact digital and offline marketing campaigns that consistently generated revenue streams and improved performance in targeted segments.

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