You may have heard that “a penny saved is a penny earned,” but that expression understates how much our bottom line actually benefits from cutting costs (without sacrificing quality). Controlling overhead allows you to invest in things like training or bar upgrades that will enhance your business and thus your revenue.
While thoughtful menu planning and minimizing waste and breakage are great ways to prevent loss, saving should start at the buying stage. Whether that’s leveraging relationships with distributors to secure the best package and bulk deals or thinking strategically about what you can cross-utilize behind the bar, it’s worth taking a step back to examine how you can buy liquor and supplies more efficiently. Here’s how, according to industry experts.
1. Establish an Inventory System
Before you make a purchase, ensure that you have a system in place to track orders, deliveries and usage. This is an essential, long-term and ongoing project that will account for human error, as well as loss, breakage and theft. Be sure that everyone on your team tracks and manages inventory the same way and that someone can be held accountable for oversight.
If you’ve done inventory before, you know it’s a tedious task, but just think: An efficient inventory management system can not only cut costs, it can also provide useful data for menu planning and drink creation. What drinks did well on your last menu? What product really flew off the shelf? And how can you use that information to replicate successes and avoid repeat failures?
“Of course, it’s always the goal that all featured menu items sell well,” says Robert Mason, the owner of Toro Loco in New York City. “If you’re not moving one particular cocktail, incentivizing the bartenders or servers to move the item with a reward is a common tactic used by many venues.”
(image: People Images)
2. Buy in Bulk
Managing your inventory allows you to make strategic buying decisions, namely identifying your high-volume or recurring purchases and buying in bulk.
“If you have storage and the money to lay out, buying in bulk can save you a lot of money,” says Reno Christou, the owner of NYC’s Elea and Kyma. “This especially makes sense for high-volume categories like vodka and tequila. With bulk buying, keeping a tight and correct inventory count is paramount. No one wants to see money sitting on shelves, and wrong inventory could lead to over ordering.”
Even if you don’t have enough space, however, consider asking your vendor or distributor about storage solutions for your order. “The size of the business and the amount of storage space will determine a lot of savings,” says Salvatore Tafuri, the bar director at The Times Square Edition in NYC. “Consider the ‘bill on hold’ policy, where a spirit can be purchased at favorable price yet stays at the distributor, so storage fees are minimized, further driving savings.”
3. Don’t Ignore the Bottom Shelf
There are tons of underappreciated, cost-efficient gems on the bottom shelf. Take, for example, Mellow Corn whiskey or any of those random fruit schnapps you have lying around. In multiple-ingredient cocktails, these ingredients can actually round things out and add complexity.
Consider splitting bases in shaken drinks with whiskey or pricier tequila. Your cocktails might actually benefit from it.
4. Be Nice to Your Distributors
In order to strike the best bulk or volume deals, treat your distributors right. This will encourage returning business and generate good will that can translate to you being the first to know of smart deals and new products.
“It’s all in developing a relationship,” says Mine Raymond, the owner of Reserve 101 in Houston. “I view working with brands as a long-term partnership. I plan to have my businesses around for a long time and don’t want singular deals that burn bridges but rather deals that are mutually beneficial for both parties.”
Raymond says he meets with vendors once a year to discuss their priorities, as well as share his own. “Sometimes that means tastings, and other times we set up volume deals,” he says. “The volume deals are centered around our cocktail menu with the brands listed in hopes that a drink will be a home run.”
Reserve 101 backbar (image: Julie Soefer)
5. Cross-Utilize Wherever You Can
“What do you want on your menu, and how many ways can it be used? Cross-utilizing helps you purchase items in bulk to receive the best discounts and brand support,” says Darnell Holguin, a partner at NYC’s Las’ Lap.
Of course, you can always create drinks around your leftover product, but that requires additional training and menu editing that ultimately might not pay off. Instead, think strategically from the get-go. Can your well gin also be used in the gin cocktail you’re launching for the summer? Can the single-malt scotch you’re using for your Old Fashioned variation also be the smoky scotch you float on top of a Penicillin? Where else can your bar staples be applied while still encouraging creativity?
Having your staff understand the importance of inventory will also help familiarize them with your bar’s stock. For bars that encourage recipe contributions from bartenders, this means they’ll be thinking strategically about how to cross-utilize and help fill in any gaps you may have.
6. Stay Up to Date on Booze Trends
There’s a difference between pandering to clicks and simply being aware of what’s going on in your own industry. It doesn’t make you less of a bartender to stay on top of trends, but it does make you more of a businessperson. Subscribe to and read sites like this one to find out what new products are hitting the market or gaining traction. It can certainly pay off when you’re nabbing the next new thing before the rest of the market. Just imagine being the first bartenders who got to the Japanese whisky train early.
“Keeping healthy liquor costs are absolutely the key to success in the bar business, but let’s never forget quality as well,” says Tafuri. “I personally have meetings every week to make sure I am updated on all the best prices and deals available. I also rely on beverage media consistently.”
7. Don’t Ignore Low-ABV
Luckily, one of those booze media trends has been low-ABV cocktails, often made with amari, sherries and other fortified wines, which are generally less costly than spirits. “Having low-ABV cocktails helps with liquor costs, as does finding great deals on vermouths and amari to create seasonal cocktails and balance the cocktail program,” says Tafuri.
“As part of our commitment to sustainability, we do not use plastic straws,” says Tafuri. “We discovered a very talented designer who produces glass straws that are easy to clean. Of course, we put a lot of care in washing them. This too will reduce costs over the long-term versus single-use plastics.”
9. Consider Branded Glassware
If you’re working with or showcasing a style of drink that’s typically out of your area of expertise, consider reaching out to a relevant brand for glassware assistance. For example, a bar that does not typically serve Moscow Mules could create a variation that’s then served in fancy copper mugs provided by a brand like Reyka or the pineapples from Absolut Elyx.
“If branding is allowed, there’s a lot POS from different brands that can be very helpful in reducing costs,” says Tafuri. “Especially in a city like New York, where branded glassware and tools are out of favor, companies are more than happy to help.”
At the same time, you can and should keep a few extra sets of your primary glassware items so you’re not caught empty-handed in the case of breakage.
“At Las’ Lap, we tend to get high volume, which leads to more breakage,” says Holguin. “We always keep a small backup of the essential glassware, like the glasses that can be utilized for a variety of different liquids. This allows us to be ready in the event that we’re super busy and suddenly can’t rotate glasses from the dishwasher fast enough.”