Chapter 4 - Managing inventory and production. This chapter presents the following content: Product storage, inventory control, product issuing and restocking, managing food production, managing beverage production, technology tools.
Chapter 4 Managing the Cost of Beverages © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Main Ideas Serving Alcoholic Beverages Forecasting Beverage Sales Standardized Drink Recipes and Portions Purchasing Beverage Products Receiving Beverage Products Storing Beverage Products Bar Transfers Computing Cost of Beverages Special Features of Liquor Inventory Sales Mix Technology Tools © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Serving Alcoholic Beverages Alcoholic beverages – a significant amount of ethyl alcohol content is present Alcoholic beverages are generally classified as beer, wine or spirits © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Serving Alcoholic Beverages Beer is a fermented beverage made from grain and flavored with hops Wine is a fermented beverage made from grapes, fruits, or berries Spirits are fermented beverages that are distilled to increase the alcohol content of the product © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Serving Alcoholic Beverages These products will be specified, ordered, received, and stored much like food products. However, there are control issues that are much more difficult to handle Such controls must be modified to meet the characteristic and inherent increased responsibility created by the sale of alcoholic beverages © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Serving Alcoholic Beverages Dramshop laws, passed in many states, shift the liability for acts committed by an individual under the influence of alcohol from that individual to the server or operation that supplied the intoxicating beverage License states versus control states © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Forecasting Beverage Sales BEER Forecasting beer sales is basically the same as forecasting any regular menu item use sales histories Keg beer is also known as draft beer, or beer in a form of packaging in which the beer is shipped to you in multigallon units for bulk sale © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.1 LeRae's Bar Beer Sales Beverage Sale Product: Beer Budweiser Bottles Coors Bottles Miller Cans Coors Cans Budweiser Draft Harp’s Draft Total © 2011 John Wiley & Sons Date: 1/1-1/8 Number Sold 45 18 61 68 115 93 400 Percentage Sold 11.25% 4.50 15.25 17.00 28.75 23.25 100.00 Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Forecasting Beverage Sales WINE Forecasting wine sales is divided into two parts: bottledwine sales winebytheglass sales When forecasting sales by the bottle or glass use sales histories House Wines – wine served to a guest who does not stipulate a specific brand when ordering © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.2 LeRae's Bar Wine-by-the-Glass Sales Beverage Sales Product: Wine by-the-Glass Fabiano Chardonnay House Merlot Bolla Soave House Zinfandel Total © 2011 John Wiley & Sons Date: 1/1-1/8 Number Sold 30 16 62 52 160 Percentage Sold 18.75% 10.00 38.75 32.50 100.00 Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Computing Cost of Beverages Beginning Inventory PLUS Purchases =Goods Available for Sale Less Ending Inventory Less Transfers from Bar Plus Transfers to Bar = Cost of Beverage Sold © 2011 John Wiley & Sons no “employee meals” Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.13 Cost of Beverage Sold Unit Name: Rio Lobo’s Beginning Inventory PLUS Purchases Goods Available for Sale LESS Ending Inventory LESS Transfers from Bar PLUS Transfers to Bar Cost of Beverages Sold © 2011 John Wiley & Sons Accounting Period: 1/1 to 2/1 $24,405.00 21,986.40 $46,391.40 18,741.25 1,572.00 2,140.00 $28,218.15 Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Special Features of Liquor Inventory Opened containers must be counted. Three inventory methods are commonly in use to accomplish this goal. They are: Weight Count Measure © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.14 Specific Gravity of Selected Liqueurs Liqueur or Cordial Color Specific Gravity Kirsch Sloe Gin Rock and Rye Triple Sec Peach Brandy Blue Curacao Crème de Cacao Crème de Cassis Crème de Banana © 2011 John Wiley & Sons Clear Red Amber Clear Peach Blue Brown Purple Yellow 0.940 1.040 1.065 1.075 1.085 1.120 1.150 1.170 1.180 Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Sales Mix Sales mix is defined as the series of guest purchasing decisions that result in a specific food or beverage cost percentage Guests can contribute to major changes in the food or beverage cost percentages, due to sales mix © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.15 Raider Resort Monthly Beverage Percentage Report Location Banquets Surfside Bar Harry O’s Total © 2011 John Wiley & Sons Cost of Beverages Beverage Sales Beverage Cost % $20,500 $80,000 25.6% 10,350 45,500 22.7 16,350 67,000 24.4 47,200 192,500 24.5 Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Sales Mix To analyze the beverage sales mix, the item % of total beverage sales must be calculated, as follows: Item Dollar Sales Total Beverage Sales = Item % of Total Beverage Sales © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.16 Raider Beverage Outlets Monthly Beverage Percentage Recap # Outlet Name: Banquets Product Beer Wine Spirits Total #2 Outlet Name: Cost of Beverages $ 2,500 12,000 6,000 20,500 Starlight Bar Product Beer Wine Spirits Total #3 Outlet Name: Product Beer Wine Spirits Total © 2011 John Wiley & Sons Month: January Beverage Sales $10,000 40,000 30,000 80,000 Cost of Beverages $ 3,750 1,500 5,100 10,350 Harry O’s Beverage Sales Cost of Beverages $11,250 2,100 3,000 16,350 Beverage Sales $15,000 5,000 25,500 45,500 $45,000 7,000 15,000 67,000 Beverage Cost % 25.0% 30.0 20.0 25.6 Beverage Cost % 25.0% 30.0 20.0 22.7 Beverage Cost % 25.0% 30.0 20.0 24.4 Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Figure 4.17 Raider Resort Beverage Sales Percentage Recap Unit Banquets Beer 12.5% Wine 50.0% Spirits 37.5% Total Sales 100% Starlight Bar 33.0% 11.0% 56.0% 100% Harry O’s 67.0% 10.5% 22.5% 100% © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Technology Tools For those operations that sell a significant amount of alcoholic beverage products, there are a variety of programs designed to discourage theft and carefully monitor product sales and expenses In fact, the software and hardware available to help you in the beverage service area is generally more sophisticated than that found in most foodrelated areas © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Technology Tools Programs available in the beverage area include those that can help you: Monitor product sales Monitor product (inventory) usage Calculate actual and targeted pour percentages Adjust product costs for happy hours and specials, as well as product transfers to and from the kitchen Maintain adequate levels of product inventory Establish par stock quantities and values © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Technology Tools Generate purchase orders Schedule employees based on forecasted sales levels Create and print customized wine lists and specials menus 10.Maintain sales histories 11.Maintain drink recipe files 12.Project the impact of sales mix on beverage cost percentages © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Technology Tools It is important to realize that some barrelated software may be dependent on specific and sometimes expensive automated beverage dispensing systems Other software is either standalone or designed to operate in conjunction with many of the basic POS systems currently on the market © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller Summary Serving Alcoholic Beverages Forecasting Beverage Sales Standardized Drink Recipes and Portions Purchasing Beverage Products Receiving Beverage Products Storing Beverage Products Bar Transfers Computing Cost of Beverages Special Features of Liquor Inventory Sales Mix Technology Tools © 2011 John Wiley & Sons Food and Beverage Cost Control, 5th Edition Dopson, Hayes, & Miller ... 67,000 Beverage Cost % 25.0% 30.0 20.0 25.6 Beverage Cost % 25.0% 30.0 20.0 22.7 Beverage Cost % 25.0% 30.0 20.0 24. 4 Food? ?and? ?Beverage? ?Cost? ?Control, 5th Edition Dopson, Hayes,? ?& Miller Figure 4. 17... Transfers to Bar Cost of Beverages Sold © 2011 John Wiley & Sons Accounting Period: 1/1 to 2/1 $ 24, 405.00 21,986 .40 $46 ,391 .40 18, 741 .25 1,572.00 2, 140 .00 $28,218.15 Food? ?and? ?Beverage? ?Cost? ?Control, 5th ... © 2011 John Wiley & Sons Food? ?and? ?Beverage? ?Cost? ?Control, 5th Edition Dopson, Hayes,? ?& Miller Figure 4. 4 Beverage Cost Competition Beverage: Product cost: Bourbon $ 24. 80/liter Number Portion of Liter Size Portions Cost