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Five ways to boost bar profits

Many of today’s trendy bars are all about star mixologists, molecular cocktails, craft beers on tap and boutique wines. But stocking the latest exotics and creating mixology moments doesn’t necessarily boost the bottom line. Here’s how a bunch of business-minded bar managers go beyond the dazzle to stay in the black.

#1 Mind your math: Lemon counting matters. Jeff Isaacson, managing partner for the Gerber Group, which runs bars at 28 hotel and restaurant locations, herds the whims of managers by centralized ordering—with some local leeway. He expects staff to keep meticulous records to control liquor cost. But he won’t tolerate dead stock and urges restraint in purchasing that extra case of coconut vodka.

After 16 years of studying bars across the U.S., John Buchanan, president of Lettuce Consulting Group, observes that the most common drain on profit is overstocked inventory. Monitoring true liquor cost is so basic that it’s often overlooked, says Buchanan. He also emphasizes that bartending is the rare profession where the same person takes the order, serves the customer, totals the bill, handles the cash and takes inventory—all directly influencing profits. Buchanan recommends layering checks and balances into operations to minimize opportunities for dishonesty.

Teaching cost-sensitive practices is also imperative, says Lu Brow of the Swizzle Stick Bar at Café Adelaide in New Orleans. “Measure to standard recipes—sweeteners, juices and other ingredients. Too many profits go down the sidebar sink.”

#2 Prep for profits: Using fresh ingredients and quality spirits, bars can charge higher prices. But at busy bars, “not everyone can infuse their own spirits, hand-make bitters, marinate fruit and chip ice,” says Isaacson. At the Gerber Group’s 28 bar locations, advance prep and training is a given for the two dozen specialty cocktails. By the time a new drink hits the menu, Isaacson’s team has carefully studied and approved profit margins and trained staff on how to make it efficiently with hand-squeezed juices and fresh garnishes. Yet Isaacson doesn’t condone his bartenders’ interest in brewing up pomegranate bitters or experimenting with exotic infusions during work hours.

The smallest environment cues can also count. At Flea Street Café in Menlo Park, California, Jesse Cool pays attention to the visuals. She uses smaller glasses and pours half the drink from an attractive, small carafe, increasing the perception of value.

#3 Work the deal: Partnering with vendors can bring direct and indirect benefits. Large vendors offer packaged POS programs.

Yet smaller brands can also build the bar’s social culture, differentiate your value points and build loyalty.

Consider inocente tequila. Since launching the brand in 2008, owner Bruce Rekant has spent more time learning about his customers’ clientele than hard-selling his premium tequila. At Fred’s, a “Cheers” type bar on Manhattan’s Upper West Side, he sponsored a staff competition. The winning cocktail, the Flirty Bird, is the top tequila seller; it’s made with inocente, pomegranate liqueur, triple sec, fresh lemon and lime juice. Bartenders christened the elderflower liqueur and inocente-based “Tequila Bruce” drink after him. The value of Rekant’s deal, says Fred’s owner Kimberly Evans, is simple. “I sell the inocente cocktails at the same price as pricier Patron—at a better margin.”

For lesser known spirits, educating staff is a necessity. Tal Nadari’s mission as managing director U.S.A. of Lucas Bols is to enlighten bar staff on how to serve Bols Genever. This style of gin, made from un-aged whiskey, is not a common call.

Nadari teaches the ritual of kopstootje or “little head butt,” which involves sipping the full tulip glass and then downing a Pilsner. During Happy Hour at the Comstock Saloon in San Francisco, Jonny Raglin serves the “Dutch Headbutt,” a shot of Bols Genever with a Trumer Pilsner back.

#4 Provide value: The deals you create count towards profits—and customer loyalty.

The 8-unit Big Bowl concept from Chicago’s Lettuce Entertain You rewards customers with a VIP Lunch Club card. Dan McGowan, president of Big Bowl, initiated a profit-boosting twist: rather than the customer holding the card, the bartenders keep it; patrons earn a free lunch after five paid lunches at the bar. This “old-fashioned” system ensures that bartenders pay attention to regulars who return.

Celebrity Cruises was the first to offer pre-cruise booking of onboard beverage. The packages include several tiered beverages and a premium package at a set price for all drinks up to $12. Guests gain ease of purchase with a pre-paid sticker on their cruise card—and operations locks in revenue and customer satisfaction.

Other deals impact branding and goodwill. Last summer Big Bowl held “Farm to Bar” Wednesdays. McGowan presented farmers’ market-driven drinks such as hibiscus tea and organic vodka with fruit salsa and white peach sangria. Wednesday spirits sales increased as did repeat business. Cocktail competitions spark creativity from the bar staff and positive press. The Fairmont Sonoma Mission Inn in Sonoma, California, recently won a regional event with “The Sparkling Apple Pie” made with cold-pressed apple juice, lime juice, simple syrup, cinnamon and Gloria Ferrer Brut. “Our wine country team took mixology to the next level and guests are enthusiastically ordering the Apple Pie cocktail,” says beverage manager Danielle Taylor.

#5 Show off the food - and more. Some bars pair food and beverage while lifting branding to new heights. At Dogfish Head Brewings and Eats in Rehoboth, Delaware, assistant manager Matt Patton’s recommendations range from Dogfish Shelter Pale Ale with crab-based pizza or their bestselling brown ale, Palo Santo Marrow, with the Indulgence Burger.

Cool, an early adaptor of all-organic menus, has built a strong organic bar at Flea Street. Cocktails are garnished with organic Meyer lemon and mint; when local cherries are out of season, she reconstitutes organic dried cherries instead of using maraschino. A modern old-fashioned is paired with house-made lamb sausage, and martinis partner with crispy fried local sardines. Although her prices aren’t the lowest in town, people are willing to pay for an organic food and drink experience. -Deborah Grossman

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