Bar operations are facing a climate of razor-thin margins as costs of doing business continue to rise “Margin is top of mind for restaurants,” says Granett Douglas, VP Foodservice, GBS Foodservice Equipment Inc. in Oakville, Ont. “But bars were probably hit the hardest during the lockdowns. Operators have to think about everything — even how much ice to put in a glass.”
Neil Baker, Hospitality Operations manager for Kensington Brewing Company in Toronto agrees. “Margins are shaved right down. If you’re doing 10 per cent these days that’s amazing, and if it’s five per cent you’re doing something right. Now we’re looking at slightly under five per cent if you don’t want to raise pricing and start gouging customers.”
Operators must look at every possible area to maintain their profitability, says Baker. “Previously a per cent here or there didn’t matter. Now we’re having to look at a half of a quarter per cent to maintain our effectiveness and profitability.”
There are a number of innovations that can help operators maintain those margins, from automating routine tasks and integrating back-of-house systems to labour-saving equipment and self-service technologies. Here are few examples.
Taking the labour out of the equation
David McCullough, managing director and founder of Freepour Beverage Management in Mississauga, Ont. says its wireless ScanChecker device can scan and weigh 20 bottles per minute and can interface with 15 food-and-beverage solutions and 100 POS solutions.
“Labour is as thin as it can be. The beverage category is low-hanging fruit. You can get three to four-per-cent savings with systems like this.”
People used to buy the scale because they thought bartenders might be stealing, he adds. “Now they are doing it to save labour costs. This takes a function that used to require two people down to one person who can complete it in a quarter of the time with more accuracy.”
PourMyBeer, an intelligent self-service beverage system, allows consumers to dispense their own drinks, including beer, wine or pre-mixed cocktails that are charged by the ounce. The combined hardware/software concept has made its way into Canada in provinces where self-service options are allowed.
Because the unit integrates with POS and other backend systems, everything is processed in real time, says Tana Rulkova, VP of Marketing, Wheeling, Ill. “Customers open a tab, present their ID and credit card for verification, and the system will show their spending while they are pouring, and it can all be managed by a single person.”
Another labour-saving equipment technology worth a look for wine bars is a glass-polishing machine, says Douglas. “If you have a high-end wine bar and servers polishing glasses by hand, the machine can do 350 wine glasses in an hour with just one person and eliminate breakage.”
Knowing your numbers
“Shrinking, pilferage…you really need to know your numbers,” says Glenn Murphy, CEO, Restaurant and Bar Guru in Los Angeles. “Technology plays a good part as far as tracking things go. POS is really the key. It can be a great tool for inventory control and analyzing labour costs. These days, you need to squeeze out every nickel you can out of everything.”
“Shrinkage is a big part of our business. Things can walk out the door when your back is turned. You need to keep an eye on that,” says Baker.
Kensington’s integrated Square POS system has been critical in managing operations, says Baker. “The tap room is our highest profit centre. We also do quite well on delivery apps. Integrating Ritual into the whole system became a big thing for us during the pandemic.”
From accounting to staff, information flow is seamless, adds Baker. “Everything integrates with our Xero accounting software. It allows us to upload and download from Square, while we use the Ekos system for tracking our products. We try to act like a mom-and-pop shop up front, but in the back end we’re acting as a corporation.”
Bumping up the buying power
Beyond technology for cost-cutting measures, there’s no harm in investing in new technologies to increase revenues. “There are new trends within the bar-equipment category that can translate into profits,” says Douglas.
A commercial juicing machine is a great way to improve margins and a popular add-on item in European operations, he says. “One brand, Zummo automatic citrus juice machine, can deliver a gross margin on freshly squeezed juice of over 70 per cent — that’s more than coffee.”
The Minipak infuser is a compact vacuum sealer that is gaining popularity with mixologists in the U.S., says Douglas. “It’s very new to Canada. They can infuse anything on the fly with fruits or other flavours. So instead of stocking 17 bottles of vodka, you can have one and use fruit to create a higher margin product you can charge a price premium for. Innovative products like these are providing innovative solutions that amplify your margins.”
By Denise Deveau
