In general, most Bar-i clients tend to focus more on draft beer and liquor sales than wine sales. That being said, it’s important that you don’t overlook wine as part of your product mix. Wine sales can have a significant impact on your business, especially if you take the time to have a carefully thought-out wine menu.
We’ve found that many of the bars we work with that experience a low volume of wine sales do so because they don’t have very many good wines to offer their customers. By more carefully designing your menu, you may be able to significantly increase your wine sales. This doesn’t necessarily need to entail having an extensive wine selection. You can experience a solid volume of wine sales with only a few good quality bottles to offer.
At Bar-i, our expertise is mostly related to wines by the glass. When you’re pouring a lot of wine by the glass, you’re typically doing a higher volume of wine sales. This means you must be on the lookout for the following issues:
- Portioning matters – When you’re pouring hundreds of glasses of wine every week, it’s crucial that your bar staff get the 6 oz. pour right. If every glass is over by a half ounce, it’ll add up quickly and you’ll lose a lot of money.
- Inventory is challenging – There are many factors that make performing inventory on your wine by the glass products challenging, and you’ll need to be very careful during the inventory process in order to ensure you’re not wasting valuable profits from your wine sales.
Pitfalls of Taking Inventory on Wine Products
There are many factors which complicate the wine inventory process and make it hard to calculate the accountability of your bar staff on wines sold by the glass:
- All wine looks the same (and there are often no bar codes).All bottles of wine essentially look the same, especially compared with liquor bottles that are all much more unique and easy to identify from a distance. This issue is further complicated by the fact that many bottles of wine don’t have bar codes on the back. Therefore, if you’re confused about what brand a certain wine is, you often won’t have the ability to simply scan a bar code to quickly figure it out.
- Naming conventions are inconsistent.
New World wines (United States and South America) are named after the type of grape (ie. pinot noir). This makes it easier to know what type of wine you have.Old World wines (Europe) are named according to the area where the grape is grown. As a result, a burgundy wine is from the Burgundy region of France, but if it were named after the type of grape, it would actually be a pinot noir.
These inconsistent naming conventions complicate your ability to know what type of wine you have.
- There are an unlimited number of selections.
There are a bewildering number of varieties of wines and vineyards. This makes it impossible to carry every type of wine. However, unlike beer and liquor drinkers who typically become loyal to their favorite brand, wine has more of a culture of experimentation. Many wine drinkers like to try different types of wines from different regions.In general, this causes many bars to change up their wine list on a regular basis, which increases your transaction costs and complicates your inventory process. Every time you add a new bottle of wine, you need to perform actions such as create a new button on your POS and enter the wine into your bar inventory system.
- You pay a higher price per serving on wine products than liquor products.
Well vodka is often approximately $0.23 per serving. In contrast, cheap wines are usually around $1.50 per serving and expensive wines can cost as much as $4 per serving. This means that your wine products are more valuable and costing you more money, making it even more important to be cognizant of managing your wine inventory process effectively.
- The vintage complicates the inventory process.The year in which a wine is made matters. With lower end (value-oriented) wine, the vintage isn’t as important. But once you get into high end wines, the vintage becomes very important because some years are better than others.
You can tell when the vintage isn’t important because most of these wines don’t have bar codes and when they do, they are the same from year to year. But for higher end wines where vintage matters, the bar code will vary by vintage to account for the difference in quality from year to year.
For wines with bar codes, this factor won’t impact your inventory process all that much. But for wines without bar codes, it can be exceedingly difficult (yet important) to distinguish the vintage during the inventory process.
Use of “Open Wine” Button on Your POS Creates Accountability Issues
We recently did a trial audit for a new client. It was a very large corporate establishment that got very high numbers of accountability for all of their products. When looking at wine by the glass products, we found that they were being rung in 97% of the time. These numbers are typical because wine is typically given away less often than beer or liquor.
However, due to their large wine selection, it was difficult for them to keep their POS system up-to-date with their current wine list. When a wine wasn’t in their system, the bar staff would ring it in as “Open Wine.” This establishment had $13,000 of wine rung in as “Open Wine” in just one week!
The problem with this is that there’s no accountability. You can’t audit what’s missing if your bartenders are pouring an incorrect amount because so many different types of wine are rung in using the same “open” button on your POS. We’ve found that this is a common issue among bars that do a high volume of wine sales.
Fortunately, their accountability was very high on wine products (97%). But by failing to have a well-designed wine program and an effective system to keep their POS up-to-date with all the changes in their wine selection, they wouldn’t have been able to accurately identify problems in performance if their accountability on wine products was poorer. For bars that experience this problem and have poor accountability, it’s most likely costing them a significant amount of money.
Two Solutions: Sommelier or Sophisticated Liquor Inventory System
There are two ways to combat these challenges, and the right option for you will most likely depend on the extent to which wine sales are a major focus of your business.
Many bars with a heavy wine focus will hire a sommelier who is dedicated to running their entire wine program. This is especially common in high end restaurants with extensive wine lists. Working with a sommelier eliminates the need for an external inventory service to handle your wine products since you already have an in-house employee performing this job.
For bars that don’t focus on high end wine sales enough to warrant a sommelier on their staff, it’s crucial that you work with a third party liquor inventory service provider that has experience performing inventory on wine products. This will ensure that your system adequately addresses the challenges listed above and you maintain a high level of accountability for your bar staff.
To take advantage of a free consultation regarding your wine inventory or to learn about how our bar inventory system can help streamline your operations and maximize profitability, please contact Bar-i today. We serve clients nationwide from our offices in Denver, Colorado.