Non-alcoholic wines last post from the two brave souls Sophie Yoneoka and Jeremy Eubanks. Thanks you two! We didn't get buzzed but we still had fun.
This week: Cost control for BTG
Identify five approaches to maintaining a consistently cost effective program. What are the most common downfalls? How do you keep it interesting for your guests at the same time?
-Have GREAT relationships with your sales partners! Being able to get the best pricing is one of the first steps to making your owners money.
-Know your market; Have an in-depth knowledge of what your guests are expecting (whether it be Buttery Charodnnay, Natural Wines, etc) so that you can know what they are willing to pay a little extra for
-Choose wines wisely to eliminate waste; while the Aussie Grenache tastes delicious right after opening, how does it taste on day 3? I always ask my sales partners to bring a new bottle so that I can assess it on days one, two, and three.
-Memorize your sales reports; If you know exactly how much of each wine you're selling, you're then able to make the small changes that can have a greater effect on the bottom line; Getting two dollars off of a slow moving wine is nothing compared to getting 50 cents off of your best seller.
-Inaccurate Pours; increasingly difficult if your servers are pouring all BTG tableside
-Waste/Spoilage; this can be devastating to cost if champagne goes down the drain
Keeping it Fun
-I like to keep a red and white BTG slot that I change frequently. It makes it so that I can buy a case of something I want for the list and blow through half of it on BTG. Also helps broaden my list without tying up too much $$$ in inventory
Max crushed this one. Almost everything I was going to say when I saw this topic posted. I'll add a few things and then talk math & sales mix.
With knowing your market, this is where study and that "quality assessment" skill you develop in deductive tasting comes into play. Does that Bourgogne you want to pour taste like $22, or is it better? What's the source of the fruit? Many of those wines are declassified village fruit so you can easily end up with a "regional" white Burgundy that's 100% Puligny, like the 2011 Benjamin Leroux Bourgogne Blanc I pour for $25 a glass. It tastes like 30. I pay 23.50 for it, COG is 23.5% and guests always get (or vocally say they wish they could have) a second glass because it over-delivers on quality. Most guests like to know they're getting a deal on a great wine, so telling them it's really Puligny and not from who-knows-where enhances their experience and builds loyalty to your skills.
I like to have one or two "gimme" wines that are there for your guests who don't know wine but know styles or buzzwords. A big juicy Cabernet, a fruity Pinot, an oaky Chardonnay, the archetypes we sometimes mock are where your money and cash flow are. Find a good one, run a great margin on it or look around your area and know what others are marking it up, make your money there to take less markup on that dry Riesling or awesome WA Syrah that you love but need to make more price-attractive to drive sales.
If you have a Happy Hour, find wines to feature that make you correct margin during the discounted period and then rake the cash during regular service. I had a $7 Albarino and $7 Garnacha fall into my lap randomly because my rep had them in his bag that both tasted like they could cost $10-11. As it happens, $7 is my HH price for pours, so I'm making my 25% there (pretty standard COG for BTG) and they're $12 all other times...which makes them 14% COG. Where will I put that money to use? The bottom line, and also pouring a 1995 Kir Yianni Yianakahori Hills Xinomavro BTG for $35 when it should be $45. This works because the Xinomavro will be an infrequent sale while the HH wines will ring the cash register all day long.
BTW, one of my restaurants is Mediterranean with a Greek emphasis, otherwise I'd never pour a Xino at that price tier. I also inherited 28 bottles of the stuff (!?) and need to trim the inventory. But, again with knowing your area, it's an affluent area with wine lovers and collectors who see a 23yo wine and can't help themselves. It tastes like aged Barolo, so an easy sell to guests looking for that. But I'm also pouring a $40 Napa Cab to cover my bases; not surprisingly, the Cab sells faster than the Xinomavro.
COG: purchase price divided by the percentage you want to run, like say $11 x .23 (23%) = $47.826, or $48. Four 6oz pours = $12ea
I fumbled with this for years, knowing what the number should sorta be but having a hard time getting there fast, so I always built spreadsheets with the formula...and then fumbled all over again when I was in an exam. Also, some of the equations out there factor in inventory and that's not useful for this theoretical COG number on a single item.
The difference between theoretical and sales-based COG is that different items at different margins sell at different rates. Again, the HH wines making all the cash while the Xinomavro does not. While on paper the theoretical COG not accounting for sales might look out of whack with the 38% COG I run on the Xino, the reality is that it barely impacts the blended COG from all the other correctly priced wines; I can play with fun stuff at that higher COG because I'm still pricing the volume of my sales correctly. BOH does it all the time (or should), building appetizers and features from trim and underutilized ingredients that are being paid for on other dishes. You can do the same kind of thing with your program.