Posts Tagged ‘ Wine List; Cocktails Menu; Selling Cocktails

Is Your Menu Missing Something?

Your dinner menu lists appetizers, right? Or maybe “Starters” or “Small Plates” or a clever synonym suggesting that this is where you start your meal.

But really, it isn’t the start, is it? I mean the start is usually a beverage. Perhaps you offer a beverage menu or a table tent that promotes beverages. OK.

"I wonder where the cocktails are..."

But experts suggest that you (also) list drinks, including wines, on the food menu.

January 26 was interesting for me. That morning I was asked by a client to review a dinner menu for a top notch hotel in the upscale segment.

The dinner menu I reviewed had no cocktails, beers or wines listed anywhere. This isn’t unusual for hotel dinner menus. The menu did have coffee, milk and juice. I recommended enhancements which would put select beverages at the top left of the menu, at the beginning. Why not let the menu “begin at the beginning”?

That same afternoon I attended 2011 Cheers Conference (www.Cheersconference.com) in New Orleans, and an excellent presentation (one of many at the Conference) – Menu Trends:  What the Top 25 Chains Are Pouring. The presenter was Michael J. Ginley, a Partner at Next Level Marketing (http://www.nextlevel-co.com).  Ginley suggested that 86% of the top twenty-five full service restaurant chains list at least “some” drinks on their menus. He then stated that he was puzzled that the number isn’t 100% since there is evidence that the practice improves sales.

But there’s more. In October 2009 I published a blog “How to Sell Less Wine”. In it I cited the remarkable Cornell wine list placement study. Thanks to Sybil S. Yang and Michael Lynn, Ph.D., and The Center for Hospitality Research at Cornell University we now understand which wine list attributes correlate to increases in wine sales. In their breakthrough finding, “Wine List Characteristics Associated with Greater Wine Sales”  [Cornell Hospitality Report, Vol. 9, No. 11, July 2009, http://tinyurl.com/6c8tsc9], Yang & Lynn detail how they meticulously studied the wine lists and wine sales of 270 restaurants spanning several major markets.

In my blog I summarized the findings, and now refer to this one: Wine list design: only two attributes were found to correlate to higher wine sales: placing the list on the menu (instead of a separate book), and not using the dollar sign ($).

Are you using your dinner menu to optimize beverage sales?

Those are my thoughts, let me know yours.

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Time to Lose (Inventory) Weight?

Well, this IS the month to trim fat, right? Every fitness center is filled, this is the number one month for fitness center enrollments, etc. But I’m not concerned here about body fat. Not that I don’t have plenty to be concerned about. The topic today is inventory fat. That’s right: inventory fat – otherwise known as dead inventory – is bad for you. 

What is dead inventory? Usually I think of beverage inventory. Mostly wine. Food inventory is easy to work out: banquet menus, employee feeding and systems for daily specials enable us to do this with some ease. We’ve gotten good at it because it’s perishable, and because storage space is limited. Dead beer inventory happens – hard to sell that summer seasonal in December. But in my experience it doesn’t represent a lot of dollars. Spirits can be a problem if you let distributors make your inventory decisions for you by giving you “free” sample products you wouldn’t otherwise order. How’s that banana-lime tequila cordial working for you, the one your distributor swore was the hottest thing going in (name any trendy area in California)?

So, we’re back to wine. I’ve seen dead inventories as high as $100,000. I’ve seen dead inventories that increase year after year after year with no movement. Does your bar accounting team wear dust masks when they do your beverage inventory? Like those extra pounds you want to shed, you know the risks of too much dead wine inventory:

  • Ties up cash
  • Perishable – it goes bad eventually
  • Takes up valuable storage space
  • Discourages you from updating your lists with the latest products

The most commonly used methods for reducing old inventory still work. “Selling” it to the kitchen and “selling” it to your sales and marketing department for VIP amenities, sales gifts, etc.

Here are some additional ideas:

  • Have a “Wine Sale” – Use this to build business on slower nights by offering it on those nights only. Example:  Sunday & Monday half-price bottles
  • Or, make a separate half-price wine list, noting that these are available until sold out
  • Or, where legal regulations allows this, prepare a half-price “to take home after dinner” list (unopened by you, of course)
  • Or, a variation – a BOGO. Buy a bottle from our “special” list for dinner, get a second bottle “free” to take home. (Promotional wording and procedures subject to your local regulations, of course.)
  • Pour off as a special BTG Happy Hour promotion
  • Create a “special” list with lucrative employee incentives for selling these itrems. Increase the value of the incentive with each sale. $2 for selling the first bottle. $3 for the second. Up to $5 per bottle. In other words, “give” the discount to your employee instead of the guest (or price it so the discount is “shared”).
  • Create the world’s best Sangria, and promote it

Those are my thoughts, let me know yours.

 

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When Selling the Right Thing is the Wrong Thing

Once last month I was thinking too hard and managed to work myself right into a contradiction. I was at a property roughly 75 miles from Wine Country.  I was congratulating management on their wine promotion, a simple but effective Best Practice, how I reported it. I was also congratulating myself on congratulating management as this would reinforce the Company’s excellent wine sales culture that I had supported in previous reports and meetings.

Regrettably, while compiling the report I encountered a sinister force trying to destroy the superb writing and brilliant conclusions of my masterful report: data. Oops. 

Turns out, the customer didn’t follow the well-merchandised direction: “drink more wine…drink more wine…” This is the thing about customers, that just when you expect them to do just one simple thing…well, you know.

Previously I had looked at sales, or the beverage mix. So, the spirits-beer-wine mix might be 30% – 32% – 38%. Great, we’re selling more wine. Keep it up. Promote wine. Good job. Report emailed.

Then I stumbled across some additional information. By “stumbled across” I mean I decided to look at the other data contained in the sales mix report. The other data was “number of items sold” though it wasn’t labeled clearly and this will continue to be my excuse for missing it first time around.

So, it turns out, incidents of beer sales surpass, significantly, incidents of spirits or wine sales in the lounge. Of course spirits and wine sales are critical and must be promoted, but promoted strategically. In fact wine sales and incidents of wine sales dominate room service beverage, for example.

But back to beer. Digging some more. Beer at this location wasn’t discounted significantly. Craft and imports were popular. The beer selection paled (pun?) next to the wine selection. There is a wine list but no beer list. There was excess capacity in the beer cooler. Management is smart and open minded. In other words, all of the usual obstacles were gone, and opportunities abound.

The hotel is adjusting inventories, re-writing beverage menus and developing new promotions. Adding some taps in the Lounge. Ratcheting up room service wine promos. All because of some data.

Six months from now I’ll request an updated mix and overall sales analysis,  and we’ll see happened. We’ll see together – I’ll share it here.

Those are my thoughts, let me know yours.

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How to Manage a Light Bulb

Let’s get this out right now: this is not “how many _______ does it take to screw in a light bulb” or anything like that. I’m not good at screwing in light bulbs. My wife will ask her seven-year-old daughter to replace a bulb, before she’ll ask me. Sure, I’m exaggerating. Sometimes she asks the ten-year-old.

But once that bulb is in, I can manage it as well as anyone. No so at some bars and restaurants I’ve seen in hotels. Bright lights in the bar. Bright lights at dinner. Lighting levels that change dramatically for no apparent reason. Lighting levels that differ from area to area within a restaurant or lounge, for no apparent reason.

Light Bulb Energy

We often overlook the importance of managing lighting levels. Lighting levels? How about music levels? Type of music? And TV’s. What’s showing – and why? It’s 9 o’clock, do you know where your mute button is? Do your guests like the cacophony of three separate programs blaring in your bar? We don’t understand why our places are sometimes empty, yet we’ve effectively killed any and every opportunity for energy.

How do you fix this? Sure, sometimes a better speaker or two and an additional dimmer switch might be required. But mostly it’s about strategy and scheduling.

We schedule our teams to service the guest. Every week. No problem. So why can’t we schedule the environment in which the guest will be served as well? The answer is, we can. Here’s one way to do it.

Make a grid for each outlet, with the hours of operation in columns, an hour for each column. TIP: if the outlet is open to or visible from a public area when closed, it’s just as important to manage its look and “feel” for that time period as well.

First, The FORECAST

At the top row, write “customer” – who is the customer you are targeting each hour the outlet is open?

Next row, write “occasion” – what is the occasion of their visit? Breakfast (re-fueling)? Meeting? Unwind after work? Unwind after meetings? Returning from dinner outside the hotel? Etc.

Finally, third row, write “energy level” or “mood” or whatever best sets the tone for the “feel” you want to support.

Now, the SCHEDULE

Record the appropriate level or channel or number for each hour, for each of the managed ambience items, including:

  • Lighting level #
  • Music volume
  • Music channel
  • TV station (mute except for scheduled “events”)

You will have multiple light controls, multiple TV’s, etc. And you can add items – maybe how the bar looks (“meal set” for certain hours, for example).

Recently I was at a smartly managed hotel in the New York area and the Lobby Lizard – here known as a Lobby Ambassador – has a checklist that includes six items that influence bar atmosphere, and they are checked multiple times each evening. I like that.

Teach your lizard how to manage that light bulb.

Those are my thoughts, let me know yours.

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RFID Beverage Controls: a New Paradigm?

Heads up: you may think this blog is about RFID technology (it is not). Or, you may think it’s about beverage controls (it is not). It is about using technology to unleash practices that change behavior and enhance the guest experience.

RFID – Radio Frequency IDentification – is among the latest and most sophisticated technologies to be applied to beverage cost control.

Are you familiar with the technology? Does an image of Mel Gibson with a tin foil skullcap pop into your head when you hear “information through radio frequency”? If this is news to you, take a quick peak at the sites of some of the companies that offer these systems (Capton, www.captoninc.com, Beverage Metrics, www.beveragemetrics.com, and Liquor Monitor, www.liquormonitor.com are three that come to mind).

"Signs" 2002

In short, a bottle’s pour spout (or collar) contains an RFID chip and battery, and by measuring the tilt of the bottle along with other information such as the bottle’s contents, size and initial volume, the system measures amounts poured with remarkable accuracy, and reports data via radio frequency to a pre-specified program which may be accessed later or even in real time by a computer. They provide best results when interfaced with the POS, which enables management to learn, for example, if a specific recipe was executed properly.

Cool. But how do you “control” beverage costs? Historically we control costs by restricting access to the raw materials, or restricting output. Locks & keys are a timeworn technology for restricting access.

Mechanical and electronic devices have been in place for decades: mechanical portion-pourers like Posi-Pour (http://www.posi-pour.com) and electronic pour restriction systems like Berg Company’s (http://www.berg-controls.com) have been industry standards for years and continue to have relevance today.

But this is an age-old paradigm: control through constraint. Now let’s look at the RFID model again: there is no restriction of pouring or access, there is only information. THIS is the “paradigm shift”: controlling through information rather than restriction. How do you “control through information”? The answer: by changing employee behavior.

That’s right. Results are achieved when these time-honored practices are employed:

  • Measurement & analysis
  • Training & teaching
  • Feedback (two-way!) & recognition
  • Re-training as needed, more teaching
  • Recognition & reward

Restrictions, though sometimes necessary (I’m not advocating open storerooms, for example) don’t “stick” without help. The locked liquor storeroom requires a second lock, perpetual inventory, broken-empty requisition procedure, marked bottles and cameras in the hallway. This might be OK – but all of it adds little value to the customer experience.

On the other hand, behaviors changed through training, teaching, measurement, recognition and reward will “stick”. And they will impact the customer experience in a positive way.

And THAT is why this blog is not about RFID or beverage control. It’s about combining the measurement systems you have (RFID, POS, Guest Survey System, P&L) with training, teaching, analysis, feedback, recognition and reward to achieve the results you are after.

Those are my thoughts, let me hear yours.

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The Purpose of Beverage-Cost Control Is Not Lower Cost

The purpose of controlling beverage cost is to increase your sales. I’ll explain.

First, let’s digress. You are an F&B Director, or perhaps Beverage Manager or Bar Manager. You work hard to keep your beverage costs in line. If your cost margin is over budget you are “challenged” by your boss. If the cost is better than budget you are praised in the short term (but sometimes “punished” by future budgets that will now set this lower number as the new expectation).

Here is the typical scenario: 

But if the current economic environment teaches us anything it’s this: the model above isn’t sustainable. And here’s why – eventually the never-ending demand for lower cost will create pressure to raise prices, and this could threaten your business. 

 

So, what should your bar cost be – what is a “good” bar cost? I’ve seen everything from 14% to 35%. BTW both numbers might be “good”, because a “good” cost is any cost within acceptable variance to the theoretical (or “potential”) cost. That’s right: 14% might be good, and 35% might be good.

Then what should your theoretical cost be? That’s a strategic decision, and the tactics that will fulfill your cost strategy begin with your target market and include pricing, purchasing, promoting, merchandising, inventory and accounting practices, recipes, menu engineering, equipment selection and more. Controlling costs is about meeting your cost strategy targets – 14%, or 35%, or somewhere in between – and is success measured by the variance between your theoretical and actual costs. Ideally your budget is based upon this “cost strategy”.

Your cost strategy should allow for “targeted pricing”, i.e. pricing (supported by promotions and merchandising) that will promote sales. I’m not saying lower prices across the board, rather consider the category of products favored by the primary customer target, and then find ways to add value to select offerings in that category. Incorporate this into your cost strategy, factor it into your theoretical cost analysis, support it with a special program or promotion with merchandising and marketing: and now you have a sustainable process. You are controlling your costs strategically so that you can increase sales.

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Cocktail Menu Insanity

My wife and I enter an upscale restaurant. The door is opened for us, or not, and we’re greeted  warmly as we enter. Perfect. At the hostess stand (it could be a host, of course) we are again welcomed and asked if we have reserved a table. We have not. However a table will be made available to us and although the hostess does not know us, she is happy to see us, and we are delighted to have made her happy. Perfect. The hostess gathers the appropriate menus, points at something on the screen, huddles briefly with others gathered around the stand,  makes eye contact with us again, and explains that “Elaine will seat us”. (Of course, it is not always Elaine, it could be any name but Elaine seems suitable for illustrative purposes.) Perfect.

This is going rather well, don’t you think?

Once seated, we are handed two menus, one for each of us. Perfect. Often we are also handed a single wine list, should we wish to peruse the contents of the restaurant’s cellar (or not). Perfect. Now comes the cocktail list. Possibly including popular beers and wines by the glass, and other drink specials. Or not. And herein lies the insanity.

We are handed just one cocktail list. Note – there are still two of us at the table. Not Perfect.

Let’s recap. What is the most profitable incremental sale the restaurant can make? (Hint: beverages.) What is the first thing the restaurant would like us to order? (Hint: still thinking, “beverages”). What is the first thing the server will ask us. (OK,  after “tap” or “bottled” water.) That’s right – what is our beverage order?

But wait, there are two of us. And we have one beverage list. We are sitting across from each other and cannot both read it at the same time. (I know what you’re thinking and of course we prefer side by side but since that seating preference requires a four-top, our wish is not always granted.) We both like to scrutinize the list and so our ordering is delayed, or we feel rushed and therefore do not allow our selections to be influenced by the drinks’ enchanting descriptions. Or both.

What are the reasons that two persons get two menus, two sets of plates and silverware, two napkins, two chairs, etc. – but just one cocktail menu? Maybe history, or old habits? Because the cocktail menu is embedded in the 20-page 7-pound leather-bound and logo-embossed wine list, and these are expensive to reproduce? Whatever. Let’s get with the program. It’s nearly 2010. Each adult is entitled to their own menu now.

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