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On Premise Advice: Evaluating Your Product Mix

By February 6, 2023Rhode Island, Top News

Len Panaggio, Beverage Consultant

By Len Panaggio

February is nearly upon us and most of us are thinking of the excellent sales holidays coming up—Valentine’s Day and President’s Day weekend! Historically, to me, Valentine’s Day signals the end of winter and the beginning of better days to come. The sun is higher in the sky and the days are finally getting longer: all good stuff!

When Valentine’s Day hits on a weekday, as it does this year, it creates a bonus period, as couples will make reservations to take their sweetie out to a romantic dinner during this slower, midweek period. Many restaurateurs will create a special menu for the day, some featuring aphrodisiacs paired with an adult beverage. Then, we have a three-day holiday weekend after that to look forward to a week after Valentine’s Day.

Prior to these busy holidays, which are perfect opportunities to market specific products and experiment with pricing, I suggest you visit your point of sale (POS) system and pull up your product mix for the last three months, which reflects current purchases, and then go back six months to capture what was moving then. One of the struggles our industry continues to deal with is price increases. Everything is going up and adult beverages are not immune, as their input costs and delivery costs continue to rise.

With your product mix in hand, scour the report and look for opportunities to raise beverage prices. I suggest looking at the big movers and the cost of those products, then make the decision whether or not to raise the price. Beer and wine are also fair game.

Have you adjusted prices for these products as they are slowly going up? And are there any beers or wines that frankly aren’t moving? Often, a conversation with the chef is warranted to see what he or she can do with these products to integrate them into the culinary program or into specials.

While many restaurants have had the courage to raise prices to offset a declining bottom line, many more simply cannot as they risk their customer base. Some easy cost-savings to think through include soft drinks—the days of free refills may be over very soon.

Perhaps it is time to evaluate this offer if you are providing it in your business. If so, the first glass needs to be generous in soda, not just ice so that customers are not put off. Additionally, coffee, tea and espresso are areas that are often overlooked. Are you matching up what was rung in to what you are buying?

This may also be a time to call a bar staff meeting and go over pouring amounts. Free pouring is wonderful, but if your bartender oversteps your portions, they will definitely be adding to the cost creep. Have them each pour water from a bottle and see where they land!

Lastly, this is a perfect time to clean up your POS system, both front and back of the house and get rid of the clutter, as well as the clutter at the back bar and your beer and wine coolers. It may not feel like it, but summer is coming—this is the perfect time to prepare for it.

Cheers to better weather and business days ahead!

Len Panaggio’s career in food and wine spans more than three decades as an owner and as a beverage director at some of the top restaurants in Rhode Island. Currently a hospitality consultant, Len is a graduate of the University of Rhode Island and has attended the Culinary Institute of America Master Sommelier program and the Sterling School of Service and Hospitality.

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