Are You Making Smart Alcohol Purchases for Your Restaurant?

| Created on January 2, 2018

Updated on February 13, 2020

restaurant management software


restaurant management software

Are you planning to open a new restaurant? If yes, you are soon going to realize that there are a million things to do. From equipping the kitchen to designing the dining room, your next few days are going to be super busy.

But, that’s not all!

Having a bar section inside your restaurant is equally important to bring in high profitability and margins. We bet, you are now wondering if you need a liquor license to sell alcohol in your restaurant. The answer to this question is yes!

First, Let’s Find Out How to Get a Liquor License

To get Liquor License L-4 (L-17 as per new excise rule), you need to contact the office of local excise commissioner in your region. If you have a restaurant in Delhi, you can click here for detailed liquor license procedures and documents required. You need to take approval for selling different liquor brands along with fulfilling the minimum sales criteria as per maximum retail prices.

Once you have got the liquor license for your restaurant, the next step should be of managing the overall liquor inventory cost. Your negligence towards smart alcohol purchases in the beginning may play the spoilsport and impact your profitability.

A profitable restaurant typically generates up to 28% beverage cost. To maintain the beverage cost (Liquor, Beer, Wine) at your restaurant below the industry average, you need to take care of these smart hacks.

  1. Create a Depreciating Budget for Alcohol Purchases

To set the budget for liquor purchase right, you need to start by calculating the cost of liquor sold.

Standing Inventory Amount* + Cost of Purchases – Closing Inventory Amount = Usage Amount

Usage Amount / Sales Revenue = Percentage Cost of Liquor Sold.

*The standing inventory amount is not just the bottle count, but also the price value of each item.

Once you know the percentage cost of inventory sold, the next step is of defining the sales projection for every week, based on variables like events, festivals, weather and a lot more. This way, you can put a cap on your alcohol spending every week and be profitable in the long run.

  1. Standardize Your Cocktail Pours

To put a check on theft by bartenders and liquor wastage, restaurant owners often go by certain liquor control standards, such as:

  • Use jiggers to avoid over pouring
  • Pre-batch cocktails to make sure the portions are in control
  • Follow cocktail recipe cards that contain standard recipe for cocktails like Manhattan and Gin Fiz.

Other common methods for liquor portion control are the use of liquid dispenser with dial, electronic liquor scales and liquor bottle ruler.

  1. Track Your Alcohol Inventory Weekly

The innovative technology of bar inventory management software has made it possible to quickly count inventory, empties, receiving and transfers. Restaurant owners can have key metrics and insightful reports on a weekly basis to manage their bar section efficiently. Also, this technology helps bar owners in attracting the digital generation which prefers to browse through liquor and beverage menu on mobile devices and place orders quickly.

  1. Build Strong Contacts with Your Distributors

When you build strong business relationship with distributors, you are likely to get discounts on high-volume orders. Start by analysing the monthly sale of different liquor and beverages at your restaurant. As you require higher volumes of top-selling liquors, discounts from vendors will help you cut down on the cost considerably. For instance, if the sale of rum drinks and cocktails is higher, make a deal with liquor distributors that if you buy X number of Bacardi bottles in a month, then you will get discount on Y number of bottles in the next order. This way, you can save some pennies without compromising on the liquor quality or the quantity that you serve to guests.

  1. Avoid Liquor Promotions that Deter Chances of Higher Revenue

Your efforts towards drumming up the restaurant business should not hurt your revenue stream at any cost. We often come across restaurant promotions like bottles of wine at discounted prices with a la carte dinner menu. Also, there are discounts like beer pints at nominal price or a complementary glass of brewed beer with dinner buffet. Such offers seem attractive, but diminish your chances of generating higher revenue. The profit margin on wine bottles is usually high, and you can miss profit targets if you end up giving them as freebies.

One of the best ways to push wine sales is to introduce gamification at your restaurant. This way, your servers will feel motivated to promote wine bottles in front of guests, and win gifts like a gift card, a wine bottle or a cash prize.

Revenue management system is another important tool of the trade along with inventory management software, which can help you run the bar section profitably. With these software solutions, you can leverage sales and purchase data to improve revenues and reinforce competitive advantage.


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