5 Free Ways to Lower Your Liquor Cost

At Bar-i, we help our clients lower liquor cost and increase bar profits in numerous ways. While our liquor inventory system provides detailed data that identifies products which are underperforming, we understand that this is only one component to successfully maximizing your profitability. To complete the job, we also act as consultants to our clients.

Sometimes, our advice might entail investing in improved equipment, such as when your draft beer system is not functioning at optimal levels. But there are also certain actions you can take that don’t involve spending any extra money. Here are 5 simple tips that you can implement right away to boost profits without increasing your costs.

1. Do a better job checking in your inventory. Doing a thorough job checking in your liquor inventory is one of the easiest ways to improve your profitability. This can help you avoid being overcharged when a product on your invoice was not actually delivered, and it can prevent you from being charged for a product you didn’t order.

The following tips will help you avoid these pitfalls:

• - Have delivery drivers place new deliveries in a different location than existing liquor inventory until all products in the shipment are checked against the invoice
• - Try to make sure someone is always available to check in deliveries as they arrive so that you can address any issues immediately
• - Go through each invoice line by line to ensure all quantities, prices and products on the invoice are accurate, and have the employee checking the invoice initial each line to increase accountability
• - Clearly mark any errors when you notice them on the invoice, and communicate these errors to your bookkeeper to avoid overpaying for incorrect products
• - Do not accept any products which were not specifically ordered, unless they are free

2. Program your POS buttons to increase accountability and ensure every drink is priced and portioned correctly.

Many bars have their POS system set up in a way that uses one button to ring in several different types of drinks. A common example would be having one “rocks” modifier button that is used with both well and premium drinks. This creates two problems:

• - Pressing this modifier will add the same cost to all drinks, regardless of the price of the product – this will cause you to lose money when the modifier is used on premium products
• - There is no way to identify exactly how much of each product was sold, as this makes it impossible to measure and manage liquor inventory shrinkage at your bar

To avoid these problems, set up your POS system in a way that gives each drink a specific button. If we return to the “rocks” example, this would involve adding a specific “Rocks” screen to your POS which would have individual buttons for every product that gets poured in a rocks glass. You can do this for every way a drink can be poured, such as martinis, on the rocks, or doubles.

This will add more buttons to your POS, but when organized efficiently, it will enable your bartenders to more accurately identify the product being poured. This will ultimately improve your ability to evaluate the performance of each product and charge appropriately for every drink you sell.

3. Make use of the free products you receive.

Often, liquor distributors will include free bottles with your weekly deliveries in an attempt to convince you to carry their new products. There are several ways you can make use of these free products:

• Create a shot or drink special using the free liquor – This is a win-win for you and your customers – patrons receive a good deal, and you make money on a product that would typically languish on the bottom shelf of your liquor cabinet.
• Give it away – You can give it to one of your customers in a promotion. This may help generate a buzz for your bar and get people in the door. You can also give it away to a staff member as a reward for a job well done, such as having the highest sales for a given day or week.

4. Create a signature drink.

Many people associate the term “signature drink” with a list of overpriced cocktails with fancy names. This strategy is often employed to create the illusion of exclusivity since these signature drinks can only be found at your bar. But are these signature drinks really any good? Sometimes they are, but more often they are not (and they don’t necessarily sell well).

However, a signature drink can also refer to an item that you make very well which becomes associated with your bar.

When deciding on a signature drink for your bar, think about the preferences and buying habits of your regulars. After all, they are the people who will be returning to order your signature drink the most.

If you are known for having a great Sunday brunch, you may want to create a delicious, yet unique Bloody Mary. If you serve Mexican food at your bar, you may want to develop a specialty margarita. Or you may want to develop a unique cocktail by infusing certain herbs, fruits, or flavors with your liquor.

Put some thought into the presentation of this drink. Is it served in a special glass? Is it adorned with colorful fruit? To maximize the value of your signature drink without sacrificing taste, consider using a mid-range liquor instead of a well or premium product.

5. Portion your drinks consistently.

We cannot stress enough the importance of pouring your drinks consistently. Inconsistency in the way drinks are poured creates two problems:

• Drinks that vary in strength vary in how much they cost – A “heavy pour” will use more liquor than a “light pour,” which will cause you to lose money on your products in the long run.
• Drinks that vary in strength also vary in taste – This makes it difficult to ensure that your patrons are always receiving consistently high quality cocktails. By pouring the same amount of liquor in every drink, your customers will always know what to expect. This will make them happier, which will ultimately improve your profits.

We often hear bartenders explain the practice of varying the way drinks are portioned by saying, “We generally pour a little heavier for our regulars.” While it is important to keep your regulars happy, this practice will eat away at your profits in the long run.

A better way to take care of your regulars would be to pour all drinks consistently, and buy them a free drink on occasion. Free drinks are typically noticed and appreciated more than a heavy pour, and this will encourage your regulars to continue coming to your bar. Just make sure your bartenders ring in these free drinks under a comp tab so that you can track how many drinks are being given away.

Please contact Bar-I today to find out how we can help improve the efficiency and profitability of your bar by using our proprietary liquor inventory software. Count your inventory using scales and voice command then get on with your day while we take care of the rest remotely.