Reducing Food Costs for Bar Owners: Maximize Profitability & Efficiency - podcast episode cover

Reducing Food Costs for Bar Owners: Maximize Profitability & Efficiency

Oct 18, 202337 minSeason 1Ep. 35
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Episode description

Have you ever wondered why your bar's food and beverage costs are spiraling out of control? Brace yourself for an enlightening episode of the Bar Business Podcast, where we dissect Robert Petrie's list of 40 Thieves of Food Cost. Originally developed in 1972, this list remains a crucial tool in understanding the pitfalls of food and beverage service. We thoroughly examine areas that could be bleeding your profits dry - purchasing, receiving, storage, preparation, production, service, and sales. We also explore strategies to identify and eliminate costly mistakes in your operations, ensuring your Key Product Indicators (KPIs) always hit the mark.

Hold tight as we delve into the critical aspect of food storage and inventory management. The episode highlights common drivers of increased costs, such as incorrect food placement, inappropriate storage conditions, and lax inventory. We emphasize the importance of maintaining organized storage and managing credits from suppliers effectively. 

As we tie up this insightful episode, we offer practical solutions to maximize profits and efficiency in your bar's kitchen. From implementing a POS system to forecasting food sales accurately, standardizing recipes, and maintaining a waste log - we leave no stone unturned. Not just that, we emphasize the significance of menu engineering, managing unrecorded sales, and smart utilization of overproduced items. So if you're determined to operate a more profitable bar business, this episode is your goldmine of information. Tune in for an episode packed with value and actionable tips to keep your food costs in check and your profits soaring!

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Chris' Book 'How to Make Top-Shelf Profits in the Bar Business'

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A podcast for bar, pub, tavern, nightclub, and restaurant owners, managers, and hospitality professionals, covering essential topics like bar inventory, marketing strategies, restaurant financials, and hospitality profits to help increase bar profits and overall success in the hospitality industry.

Transcript

Food Cost in the Bar Business

Speaker 1

You're listening to the Bar Business Podcast where every week , your host , Chris Schneider , brings you information , strategies and news on the bar industry , giving you the competitive edge you need to start working on your bar rather than in your bar .

Speaker 2

Hello , and welcome to this week's the Bar Business Podcast . Last week we talked about continuous improvement and problem solving and this week I wanted to build on that a little bit but also go over what I think a great list .

If you are root causing problems with your food cost or beverage cost , because while this is a list developed , discussed food cost , everything that's true about food cost is also true about beverage cost .

Obviously in the bar business we worry a lot more about beverage costs frequently than food costs , just because beverage costs and alcoholic beverages make up a lot more percentage of what we sell and a lot more of our inventory on the shelf , so we have more money set into the inventory for our alcoholic beverages compared to our food .

But , as I said , the list we're going to go over today is all about food cost , but it applies both ways and we'll kind of talk about it like that as we go along . And this list is called the 40 Thieves of Food Cost .

It comes from an old book by a game Robert Petrie that was published in 1972 called Cooking for Profit , and the idea behind this list , the 40 Thieves of Food Cost , is these are the 40 places to look to figure out why your food cost is out of line .

So , thinking about last week when we talked about continuous improvement and problem solving , identifying issues that we find in our KPIs and then trying to root cause those , if you have an issue with either food or beverage cost , where your actual cost is out of line with your theoretical cost or where your cost should be , this is actually a really good list to

refer to , to really look at all the different places that your food cost or beverage cost could be affected and why it is too high .

And while the list itself comes from over 50 years ago because it was published in 1972 , frankly not much has changed in the world of restaurants and bars that would have caused this list to not be just as applicable today as it was then .

And the other thing that I really like about this list is it does give us 40 Thieves of Food Cost , but it breaks it down into seven sections and that way it really helps your brain start to wrap around . Where could these cost problems be coming from ?

Because , if you remember from last week when we were talking about value stream mapping , to really determine the root cause of any issue in your bar you have to look from the second that something is purchased till the second it is sold .

Everything that that product goes through that entire process , from purchasing to actually being served to the customer , is somewhere that there can be an issue , a problem or a problem , waste that is going to throw your KPS off . And , just as a refresher for those who did not listen last week , kpis are key product indicators .

Essentially , these are the metrics that we are tracking that allow us to know how well our business is doing the health of our business . So these seven sections that these 40 Thieves of Food Cost were broken into are purchasing , receiving , storage , preparation , production , service and sales .

So that we have , so that we have , this end to end test of places to look problems , of places to look for waste in our system and places where we need to potentially solve problems to make sure that our food and beverage costs are not out of hand . So let's go ahead and go through the 40 Thieves of Food Costs in these seven sections .

We're going to discuss a little bit about each one as we go and hopefully give you guys some really good ideas of places to look for waste in your bar . So our first section is purchasing , and under purchasing there are six separate Thieves of Food Costs that Petrie laid out in 1972 .

Purchasing too much , purchasing for too high of a cost , no detailed specifications like quantity , weight or type , no purchasing budget , no audit of invoices and payments and too many vendors . Now , in a lot of ways these don't necessarily apply to everyone and it is true . With food you can have too many vendors .

But depending upon where you live , especially in the United States where we have some very archaic laws when it comes to alcohol sales , too many vendors may not be a problem . In some states , the only vendor you can buy from is the government .

In other states , like where I am in Indiana , you can only buy a certain product from a certain company , so it's illegal here for two companies to sell the same product when it comes to alcohol . Now , the other ones here are a lot more applicable everywhere .

So , purchasing too much we have talked about this before when you are buying inventory especially expensive booze , think high-end wines , think really nice bottles of liquor if you have all that money sitting in inventory on the shelf , that's not money in your pocket . That money has been stolen from you and put on the shelf . Purchasing for too high of a cost .

Now again with booze , generally speaking , most places what a bottle of Bacardi cost is what a bottle of Bacardi cost . But when we think about food , there can be a giant variation in food cost depending not only on the exact vendor you are using to purchase your food from , but also on the suppliers to that vendor , so the wholesalers .

And if you think about something like chicken , chicken from brand named companies , say Tyson or Purdue , tends to be more expensive than non-branded chicken . So you can find some cases where you can get the exact same product at a lower cost just because it's coming from a different manufacturer or food wholesaler . Now , no detailed specifications .

So not going into quality , weight or type is huge , and this can work both ways , because if you think about food , quality absolutely matters and if you're not specifying the quality , you're going to end up buying maybe cheaper , a whole bunch of inferior products or maybe for the same price , a whole bunch of inferior products .

A great example of this could be a case of tomatoes .

If you don't inspect that case of tomatoes when it comes in the door for quality , you don't know if you have good tomatoes or not , and I'm sure all of us have been in a situation where we received a case of produce that most of it some of it , a little bit of it was rotten , was not really fit to serve people , and so that's a huge waste .

If you're buying something , bring it in the door and then immediately throwing it away . The other one here that I think is really worth highlighting and talking about is no audit of invoices and payments . So anytime you order something and this should go without saying , but it doesn't you have to check in your invoices .

I cannot tell you how many times I have been receiving product at a bar or a restaurant where what I was invoiced for and what I received were not the same , and frequently this is just a mistake where a box didn't make it on the truck . So the box is on the invoice because it should have been delivered but it wasn't .

And if you're not checking in every single invoice , how would you ever know that ? And especially with booze and I've seen this happen before , particularly on split cases , where you have 12 random bottles in a case , but it's not a singular case of booze you've ordered individual bottles where maybe you have a bottle that's broken .

You need to identify that , because there's no reason to pay for product you didn't receive . So unless you are checking everything in when it comes in the door , unless you are making sure when you go to pay those bills that the amount you pay matches the invoice , you stand a good chance of losing money .

Now , after purchasing , we have receiving , and under receiving , there are six thefts of food costs , in this case theft by the receiving personnel . So just literally people taking it . No system for credits , no system for checking in orders , lack of facilities or scales and perishable food left out of proper storage .

So reading that now , I guess I jumped the gun a little bit on talking about checking things in . But let's dive into these other ones just a little bit really quick . So theft by receiving personnel .

Let's be honest here the biggest thief of your food and beverage cost tends to be your team , and that's part of the reason why it's really important to do inventory every time .

I think I have told the story before , but it bears repeating that one time I took over as food and beverage manager at a establishment and the manager before me evidently had a bit of a drinking problem and was also the one that always did the inventory . Well , come to find out .

The first time I did inventory , inventory was about three grand shy of where it should have been , because a lot of the bottles towards the back of the shelves in the liquor storage room were empty . Someone had gone in there , presumably the prior manager that had walked out , but maybe maybe not .

I have no clue or proof as to who it was whatsoever , but someone had been going in there , drinking out of liquor storage and then just putting the bottle in the back of the row on the shelf and no one had noticed . And it was literally , when I went in there , $3,000 worth of product .

So theft by anyone in the system is bad , but you're receiving personnel , the people getting that . It's really easy for them to grab a bottle , especially like we were talking about before , when you have a split case and they just grab a bottle and say , well , that bottle wasn't there .

Food Storage and Inventory Control Issues

Now , no system for credits . That's also important because obviously sometimes you're going to get credits from your suppliers and you may get credits because you had a beer that went bad or you were delivered a keg that is not fit to serve .

When you tapped it it was turned , or you were delivered food that was rotted or moldy or just passed where it should be . So obviously you get credits for those . You need to make sure that you are using your credits .

One thing I always noticed in particularly food suppliers , but also beverage suppliers they're not going to auto apply a credit on an invoice for you . You have to make note of that .

You have to apply it yourself and if you don't apply that credit , they are like I said they're not going to remind you because they don't really care if you use the credit or not . Now , obviously you should care if you use the credit , because that's money that you wouldn't have to pay . So you need a system for recognizing those credits and remembering them .

The fourth one in here was lack of facilities and or scales . So think about with food , especially if you're buying in giant amounts of meat .

If the box comes in and says this is 25 pounds of chicken wings , you might want to throw it on a scale and make sure it's 25 pounds of chickens , because any meat that you're paying by the pound , it's possible and again , I don't think it was normally be a malicious thing on the fact or on the part of your supplier , but the fact still stands .

Sometimes people weigh things wrong . So it's never a bad idea to double check the weight of what you ordered , especially again with proteins and meats , where it's really by the pound and it tends to be very expensive . And the fifth one here perishable foods left out of proper storage .

I see that happen a lot at a lot of different places and frequently it's because the delivery comes in during lunch . And when that delivery comes in during lunch , everybody's on the line , they're busy , they are working and the food sits in the entryway and obviously if it's left out for more than four hours you have a health safety problem .

So in that way it's important to obviously get everything that's perishable put away as quickly as possible . But it's also important to work with your suppliers to say you know what ? No , you're not delivering between 11 and one . Now , if you're a bar that's only open in the evening , obviously deliver anytime during the day .

As long as someone's there , it's not a big deal . But when people are delivering , if you serve lunch in the middle of a lunch rush , you don't have the time , the effort or the energy to properly check in and receive that order and so you should just have your suppliers not deliver then .

And my experience sometimes suppliers will give you a little pushback because they have routes , they're worried about their logistics . But generally speaking you can get suppliers to deliver at a different time if you ask and if you push it a little bit .

And if you're a good customer , obviously the more you order from someone , the higher volume of business you're doing with them , the more likely they are to work with you on things like that . Now our third category here is storage , another storage that we have seven thieves of food cost Food improperly placed in storage storage at wrong temperature and humidity .

No daily inspection of stored good . Unorganized storage . No physical inventory system . Lack of single person responsible for food storage . No control or record of foods issued from the store room . Number seven control records of food issued from the store room . That's normally going to be something that you do in a much larger organization .

Some bars may do this , but if you have a larger bar with multiple serving areas , multiple bars within your bar , if you will , you may have a store room and then issue inventory out to specific bars to further track it .

But a lot of times these kind of sub or within a business , food issued from store room type inventory controls we're going to see in hotels , in large venues , in giant event spaces , things like that .

Now , with food being improperly placed in storage , obviously you have the same problems that if you don't put food in storage it can lead to spoilage , storage at the wrong temperature . That is probably something that happens way , way , way more than any of us like to pretend that it does .

And the main reason behind that and we've talked about this before when we've talked about maintenance in kitchens and things generally happens to be that a kitchen refrigerator or a freezer is running a little hot and in my experience , probably seven times out of 10 , if a refrigerator is running hot , it's because there is some amount of dust and debris that's

collected on the coils of that refrigerator and usually you can clean it off and it'll run fine . And that saves you a couple hundred bucks on having to call someone out who just cleans it off and you're fine .

Now , obviously , if you have a bigger issue free on leaks , things of that nature , you really need to get someone in to service that piece of equipment . The third one here on storage no daily inspection of stored goods , and if we combine that with lack of single person responsible for food storage , those are two that I feel like most people often overlook .

Now , with food , I'm sure all of you at one point in time have watched a show like kitchen nightmares or restaurant impossible , where you see someone going back into the kitchen and you just see that this kitchen is a total mess and there is rotting food and the food isn't stored properly and there aren't labels on things .

And obviously part of that is on the employees that chose not to do those things , but part of that's on management , because , in the end of the day , something that isn't inspected , people won't do . We are all naturally lazy , and so if we know that we can get away with something , we tend to try to get away with it .

And the only way then to prevent your employees in the kitchen and even behind the bar with storing things properly , organizing them properly , all of that is to inspect it daily and to have a responsible party , because that responsible party is now in charge of that daily inspection . The other two we have here is unorganized tortures .

That goes back to having a person responsible and a lack of a physical inventory system . And I have said this before , I will say this again and again and again and again you must , absolutely must take inventory every week and you should do inventory behind your bar every week . And you should do inventory in your kitchen every week .

And if you have fears of your food or beverage cost being high , abnormally high , and you're looking for root causes , you should identify what items you have waste .

So whether that's your captain is just disappearing or your stakes are disappearing , whatever that may be , identify those high value items and do a daily inventory of those items until you get control of it .

Physical inventory is the only way that you can actually know what you have , and I don't care what kind of computer systems you have , I don't care about any of that . To know what you have actually have , you have to do a physical inventory .

So anytime you're worried about waste , anytime you are worried about preventing theft or think you may have a theft problem , you must do a physical inventory on a regular basis . Otherwise you will never pin that down .

And one of the beauties about doing a daily inventory when you think you have a problem , especially if you think you have a theft problem , is , as you do it daily you can start to narrow down who's working those days .

Because if you have a theft problem in your kitchen and you have 10 guys that work in the kitchen and three of them work at any given night . If you do this for a week and you see theft on two nights of the week , well , who worked those two nights ?

It's the same , because probably you don't have three or four or five people stealing eye , but hope you don't . You probably have one person stealing and you just need to go weed out that one person .

So physical inventory absolutely should happen weekly , but if you think you have a loss issue should happen daily on high value items or the items that you think are being stolen .

Our next area for the 40 thieves of food cost is preparation , and here they list three things Excessive trim on vegetables and meats , no check on raw yields , no secondary usage of items . Now , the excessive trim on vegetables and meats . Most of us are not running high end kitchens and so that really should not be a big deal .

But if you're doing something like buying whole beef tenderloins and breaking them down into fillets , yeah , you need to watch your trim , and if you guys have not , if you don't have a copy , you should get one .

But if you're not familiar with it , there's a book called the book of yields , and all the book of yields is meat , and when you trim it , what you should be left with what percentage should be in your final product . If you start with 10 pounds , a 10 pound whole tenderloin , how many pounds of fillet do you get out ?

And it has that for all sorts of meats . I think it might even have some vegetables in it too , but that book is absolutely wonderful in giving you an idea on what the ideal yield from a primal or subprimal , a large cut of meat should be when you break it down . So if you are doing that , you should be checking those yields .

Improve Efficiency in Kitchen and Bar

Now , the big one here , though , that a lot of us are going to run into in the kitchen is no secondary usage of items , and when we've talked about menus , I always talk about because to me it is brutally important that if you have an expensive protein , it should be on your menu in more than one spot .

As a matter of fact , I don't think you should ever have a protein on your menu that is not used in two places , and , frankly , the same can be said behind the bar . If you end up buying an expensive odd liqueur to make one cocktail , that's normally not a good idea .

There's no reason to have a bunch of pimps around to make pimps cups and not use it anywhere else , because if it doesn't get used anywhere else and those pimps cups don't sell , well , what are you going to do with a bunch of pimps ? And sure , I mean , there are other cocktails you can come up with . That's all true .

But anytime you use an ingredient on your menu , you should really consider using it in two places Behind the bar , that's true , but particularly in the kitchen . When it comes to proteins , that is 100% true . Every protein should be in at least two dishes on your menu . So after preparation , we have production in our 40-thee food cost .

Now the thieves there are overproduction , wrong cooking method , cooking at the wrong temperature , holding food items for too long , no food production schedules , no using standardized recipes , not cooking in small batches and no waste log for items thrown out .

Now , almost all of those are going to apply just to the kitchen and not to behind the bar as well , except for number eight , that waste log . So I am a firm believer that when it comes to anything in your bar , if you are a bar that gives out shift drinks to people , those need to be put into your POS system and comp as shift drinks .

If you have a beer bottle that gets dropped on the floor and breaks , that needs to be put in your computer and comp as waste . You need to account for every single drop of alcohol that gets poured or wasted in your bar . Otherwise there is no way to calculate your actual and theoretical cost . And so any idea then you have .

You say , well , maybe my food cost is high , but I am not accounting for waste , so I really don't have any clue . That doesn't work . There is no way to manage your bar if you don't know when you have waste . Now , obviously , the same is true in the kitchen . Now , a few of these we can kind of lump together .

If we are over producing and we don't have production schedules and we are not cooking in small batches , that means that we have not established proper prayers for our prepping in the kitchen .

If you're serving food , you should always be forecasting your sales based upon last month , last week , your food product mix , all those things to determine what needs to be prepped on a daily basis .

Now , obviously , sometimes you're going to be wrong , but I have always believed and always will believe , you are better off running out of an item than prepping too much of it and throwing it away . If you run out of an item , it's not a great customer experience I will give you that when you say , oh sorry , we're out of that .

But saying oh sorry , we're out of that is a lot better than taking a couple hundred dollars and throwing it in the trash can . So , when it comes to your kitchen , prep pars and standardizing everything is absolutely necessary . The other thing here not using standardized recipes . This is huge behind the bar and in the kitchen . We've talked about this a lot .

We always will talk about this a lot . But everything you serve should have standards to it , and the reason you need standardized recipes for everything kitchen , behind the bar , anything is because that way you're ensuring that you're using the same amount of product every time .

If you have a cocktail recipe that calls for an ounce and a half of liquor and your bartenders are always pouring two ounces , obviously that doesn't work . But if you haven't handed them a standardized recipe , you can't get mad at them for pouring two ounces . Maybe they think it should be two ounces , not an ounce and a half . So that's on you .

You have to give people standardized recipes in your kitchen . You need standardized recipes and everything behind the bar should be measured Whether you're free pouring and you're testing your folks on free pouring , whether you're using jiggers , whether you're using those pour spouts with the stoppers in them , which , frankly , I really dislike .

I'll be honest with you , I'm not a huge fan of jiggers either . To be honest , I like free pouring , but I also like to have a staff that can pass free pour tests every day before they come into work , or rather before they get behind the bar , and that know their counts and know them really , really well .

But if you don't have a recipe for something , you cannot be mad when it screws up and you are wasting that product .

Now we have four thieves of food cost in our service category no standard portion size , no standard size utensils for serving , no records for food production and carelessness , which would be spillage , waste things like serving hot food , cold things of that nature . So the portion size of serving utensils , that really goes back to the recipes .

But obviously everything should have a proper portion size . Everything should have a proper serving utensil , and when we're saying service utensils in this case , think of something that you're scooping out of your cold table or a soup that you're ladling . Obviously , that ladle should be the size of a serving .

Behind the bar , your standard size serving utensil is going to be that jigger . Now , no records of food production . It is important that you have a ticket system right . Those tickets come in , and this is true behind the bar too .

As those tickets come in , normally they get stabbed onto a little stick when the server , say , picks up the drinks from the server . Well , and those receipts , those slips that your bartender used to know what to make .

That is your record of production and I don't know how many times I have been managing or working on or owning a bar that was busy and the server comes back up and says , well , you never made blah , blah , blah , blah , blah . And it's sitting right there , stabbed in those lists or in that pile of tickets . So it definitely was made .

Now , maybe it didn't go the right table , maybe we got a server grab the wrong thing , but this way at least you know that you already made that order and that the problem was not that your bartender didn't do it .

Now , for the record , I have seen , if this comes up , where you have your servers accusing your bartenders of not doing things all the time I have seen bartenders get mad at servers and , rather than make their orders , just stab the ticket . So be aware this can go both ways .

Just because you have a stab ticket doesn't always mean that order was made , but it is really generally a good indicator that that was made and then that drink , those drinks were served to someone , maybe not the right table , but those drinks are out somewhere on your floor or in the hands of a server taking them to a table .

Now for sales , there are seven thieves of food costs , food taken out of the building , which obviously theft if someone takes your food or booze out of the building . Yep , that's gonna cause a loss . Unrecorded sales and incorrect pricing , no charge or a void in your computer .

No food popularity index or comparisons of sales to inventory consumption , no sales records to detect trends , poor pricing of menu items , employee meal cost . So either you're overproducing employee meals or your employees are just eating food and not ringing it in and not running specials on items that were overproduced .

So what's interesting here is I think we can take three , four and five . So no food popularity index or comparison of food and inventory consumption , no sales records to detect trends and poor pricing of menu items . And we can kind of throw that all together with one solution , which is obviously , I'm assuming nowadays . This was written in 1972 .

So in 1972 people like cash registers , not POS system . So we have access to a lot more data now . But if you really think about what is going on there , so we have the sales records from our POS , but poor menu pricing of items and no popularity index or comparison , that all comes down to not doing menu engineering .

And I know a lot of people will say menu engineering is not an end all be all , and for those of you who are not familiar with menu engineering .

It is a mathematical model where you take the popularity of items , compare them to the contribution margin or the number of dollars you make on the item , and you put them on a grid and you end up with high profit , high popularity items , low profit , low popularity items , high profit , low popularity items and low profit , high popularity .

So it kind of just gives you this grid . Now the thing about that is and why there are a lot of people dogged on menu engineering is everyone wants to simplify this and make it so that , oh well , if it's low popularity , high price , you should lower the price . You really increase the popularity . Well , no , not necessarily .

Or if you have a really , really , really good menu and you run this exercise , it's still very valuable , just as knowledge and as an analytical tool .

Maximizing Profits in Restaurant and Bar

But just because something is relatively low profit and relatively low popularity doesn't mean it doesn't make you profit and isn't popular , right ? Because all this is putting your food items on a grid relative to each other .

If you have a menu where you have 100% winners which almost no one does , but let's just pretend you did everything on your menu is a winner , everything is relatively popular , everything on your menu you make good money on . And then you do menu engineering .

Well , some of those items are going to show as low popularity , low profitability , when in actuality they're really good food items and or really good cocktails whatever part of your menu you're doing menu engineering on , and so they don't actually affect your businesses negatively as that analysis would appear . That being said , again , it's an analytical tool .

It's a tool to help you think and help you look at things and help you examine where your profit is , where your popularity is , and what items aren't quite there . And obviously , if you do this over the course of quarters , if you do it quarterly and say you have a quarterly changing food and cocktail menu , this will help you start to establish trends .

What are your customers like ? What are they not like ? What things will they pay more for ? What things do they not want to pay more for ? All of that can be found in menu engineering . Now , unrecorded sales and incorrect pricing voids on your POS system . That is huge . And obviously nothing if we're going to record everything that gets wasted .

Nothing should ever go across your bar , nothing should ever come out of your kitchen that isn't rung in , and if there's something wrong with it , right , we can comp it . If it's an employee meal , they can have a discount . Or maybe you comp employee meals , maybe you do a family meal , whatever .

But whatever comes out of that kitchen , I don't care what it is needs to be accounted for and it needs to be rung into your POS system so that it's in your data . I am a firm believer that with enough thought and enough effort , you can figure out the root cause of any variance in your data . But you have to have the data .

So if things are coming out of your kitchen and not getting rung in , if you have sales that are unrecorded and for the record , let's stop here for a second and let me just say this Bartenders giving away free drinks and not comping them and not having permission to give away free drinks is theft In my mind .

There is no difference between a bartender taking a $5 bill out of the cash drawer and a bartender handing a $5 beer to a customer and not ringing it in and giving it to them for free . So it is theft and that's how I would look at it when it comes to employee issues and HR and all those things . But we're not really worried about that Now .

We're talking about your data your sales and making sure that you don't have food just leaking out Booze , just leaking out of your establishment and taking your money with it , and so anything that's not recorded is obviously going to cause a food or beverage cost item and it ruins your data .

So you can't compare , you can't analyze what's going on anyway , and our last one on the sales list was not running specials on items that were over produced . That is huge , let's be honest . Here . Almost all bars everywhere serve soup , and soup is a fantastic way to get rid of , you know , some extra roast beef . Or you had a prime rib special on Sunday .

Maybe you have prime rib soup on Monday . It's a great way to get rid of things . But you have to find a way to use those items in your kitchen that were over produced , that were over prepped , rather than let something go bad , turn it into a special .

So maybe that prime rib you didn't want to do a prime rib soup , so maybe we shave it , put it on a meat slicer , shave it off . Now we have roast beef and we do roast beef melts or roast beef sandwiches as a special that night .

There are all sorts of ways that you can use food before it goes bad and still provide really cool , great items to your customers .

Now , obviously , behind the bar we're not really running on specials on items that we've made too much of , because unless you're massively batching cocktails that are going to go bad because you poured I don't know a bag of sugar in them , most things behind the bar are not perishable , the same way as food .

But still , if you have a beer that isn't moving right , so now we have excess inventory sitting there . We haven't over produced , we've overordered , but the way to get rid of a beer that's not selling is to put it on special .

Try to sell it cheaper , get it out the door , because even if you are breaking even on that beer , getting the space in your cooler to now put in a different beer that may sell better is going to make you more money in the long run . So hopefully that's helped you guys think through some places where problems can exist .

And again , the reason why I really like this 40 Thieves of Food Cost list , besides the fact that I think it's really fascinating that a lot of the issues that existed in the restaurant business and the bar business 50 years ago are absolutely still relevant today . The technology , all of that has not really changed any of these thieves .

We haven't eliminated any of these potential issues in the last 50 years from technology , so you really have to manage all of them . But the other reason why I really like this list is because it's a great way to start thinking about your entire value stream .

The entire process that an ingredient or a bottle of booze or what have you goes through as it from the time you order to the time you serve it to the customer flows through your establishment , and so anytime you have a problem you're trying to solve , anytime you're working on that continuous improvement we talked about last week , always consider that entire value

stream that that product flows through , and everywhere every step of the process could be an issue , which is why when you notice something like food or beverage cost is high , it is absolutely essential to figure out the root cause , because otherwise you are literally just thrown spaghetti at the wall trying to get something to stick , because there are too many places

where that problem could exist . So hopefully this conversation has made you think a little bit . Hopefully it's pointed out to you that you know , beyond food cost right , take this in your brain . Realize everything in your business can be this way . There are so many places things can go wrong and you have to be aware of all of them .

So with that , I will let you guys go for the week , but before I do , if you have not had a chance , go down the show notes . Check out Bar Business Nation on Facebook . Join us there . We're having some great conversations .

Also , if you have not had a chance to pick up my book how to Make Top Shelf Profits in the Bar Business , there is a link in the show notes to go get that off Amazon . If you have Kindle , it's available on Kindle Unlimited . There's also an audio book out , so if you have Audible , that's always an option where you can purchase that separately .

And with that , I hope you guys all have a great week and I will talk to you later on .

Speaker 1

Thanks for listening to the Bar Business Podcast . Make sure to subscribe so you don't miss any future episodes . Check out our website at barbusinesspodcastcom and join our Bar Business Nation Facebook group for more strategies and tips .

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