Restaurant Owners Need to Check Beverages for Profits
It’s clear that 2008 will chew at the bottom line for independent and chain restaurants alike. Both have one category of products on the menu that are still high margin and should not be ignored for squeezing that last dime from every item in your system. Beverages present opportunities to boost your P&L.
For operators that do not sell alcohol, you will see slight (comparably) increases. Here is an opportunity to bolster your margin by offering more beverage choices and pricing existing items well in front of the increases. For instance, be creative with alternatives. A root beer from a fountain may be priced at $1.29 for a 12 oz. portion. If you offer a “gourmet” product like IBC root beer in the bottle (or similar brands), for $2.29, in most cases your profit will be higher since there will be no refills, ice or cups that add cost.
Other examples may be:
- A special hot chocolate made with an imported chocolate. There are inexpensive Mexican chocolates that are unique and cost very little.
- Herbal teas are inexpensive and may offer alternatives to coffee and a healthy choice.
- Boutique sodas are popping up by region around the country.
- The emphasis on organic and natural products could be the way to boost sales of juices.
If you offer alcohol, there are opportunities with regional wines produced in your area. Many are much less than wines transported from other countries and have a following for people trying to consume locally produced products.
Bartenders must watch for trends with drinks that include mixes made with house brands that can be “upsold” to call brands. Watch your mix prices carefully. A touch of Grenadine is a lot less expensive to create color than a liqueur. Regional brewers offer a way to offer a higher per glass profit on draught beers than domestic brands which have increased substantially due to transportation and bottling costs.
Beverages are also the most common source of potential abuse by servers, bartenders and other employees. Servers forget to ring in that coffee after dinner or the soda a diner switches to after a cocktail. In some cases, re-portioning and prepackaged items can be tracked easier than fountain pours that can be difficult to monitor. Many POS systems can be programmed to force wait staff to include a beverage for every person on the table. Managers must override a check that does not include a beverage. This eliminates servers using beverages to bolster their generosity for a tipping guest.
Have you compared your beverage prices lately? Can you get an extra 10 cents for coffee, tea or soda? Have you seen the fuel surcharges on suppliers’ invoices? Have you included those in your pricing? The consumer is hardened to price increases. Now is the time to make small adjustments while the media has educated the public to expect them.
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