In my last blog (My mom told me not to waste my food. She said nothing about liquor.) I stated:
“If there was ever an industry plagued by waste, it’s the bar industry. My experience suggests most bar owners unnecessarily lose between 30-42% of their liquor profits. “
Let’s explore where that range comes from, beginning with the lower limit of 30%.
The Kerr Study in 2008 evaluated pouring practices in 80 bars in 10 different counties in California. The study only examined 1-liquor pours, not multi-liquor cocktails (Mai Tai, Long Islands, LA Water, Adios, and on and on).
The Kerr Study revealed bartenders over-poured 1-liquor drinks by an average of 42%. Meaning, instead of pouring 1.50 ounces, they poured 2.13 ounces.
How does that affect your bottom line? If all your cocktails were over-poured by 42%, then only 70% (1.50/2.13) of the liquor you purchased was really needed for the sales created. So a 42% over-pour means 30% of the liquor purchased (that’s profit) is simply given away free.
But the problem is much worse.
Bar Optimizer secret shoppers evaluate bartender pouring practices for all cocktails. How do the secret shoppers know if a cocktail is over-poured? In other words, who decides how much liquor should be poured in an Adios, or any other cocktail? The owner. To date, our clients want their bartenders to pour popular cocktails in accordance with recipes taught in bartending schools.
That’s not what typically happens.
In Orange County, three and four spirit cocktails are over-poured by an average of 80%. Yes, 80% (updated July 7, 2021).
Bar Optimizer secret shoppers also find an average 1-liquor over-pour in Orange County of 55% (granted, many of our clients are so because they know things are out of control).
Doing a weighted average of two 1-liquor cocktails sold for every one multi-liquor cocktail sold, liquor is over-poured in Orange County by 63%.
The 63% average over-pour in Orange County means 39% of the liquor purchased is given away free.
I began by stating: “bar owners unnecessarily lose between 30-42% of their liquor profits.”
But I’ve only demonstrated a range of 30-39%. Where’s the other 3%?
We’ll talk about that 3% next time, and more important, how the 30-42% is loss profit is only part of the story. There’s also the lost opportunity cost….oh my.