Chapter 13

Beers (lagers and ales)Wines (red, white, rose)Spirits

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Fermentation: Natural, chemical process by means of which sugars in a liquid are converted to ethyl alcohol and carbon dioxide

Distillation: Process by means of which alcohol is evaporated from a fermented liquid and then condensed and collected as a liquid

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To maintain an appropriate supply of ingredients for producing beverage products

To ensure that the quality of ingredients purchased is appropriate to intended use

To insure that ingredients are purchased at optimum prices

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Frequency with which management chooses to place orders

Storage space available Funds available for inventory purchases Delivery schedules set by purveyors Minimum order requirements set by purveyors Price discounts for volume orders Price specials available Limited availability of some items

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License states: States in which beverage wholesalers (and sometimes manufacturers and distributors) are allowed to sell alcoholic beverages directly to foodservice establishments

Control states: States in which the state government actually sells some or all alcoholic beverages through its own network of stores, thus exercising complete control over prices

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Quantity of an item delivered must equal the quantity ordered

Quality of an item delivered must be the same as the quality ordered

Price on the invoice for each item delivered should be the same as the price quoted or listed when the order was placed

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1. Maintain an up-to-date file of all beverage orders placed

2. Remove the record of an order from the file when a delivery arrives and compare it to the invoice presented by the delivery driver

3. Before the driver leaves, check brands, dates, or both, and count or weigh delivered goods

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5.Call to the attention of management and the delivery driver any broken or leaking containers and any bottles with broken seals or missing labels

6.Note all discrepancies between delivered goods and the invoice on the invoice itself

7.Sign the original invoice and return it to the driver.

8.Record the invoice on the beverage receiving report

9.Notify the person responsible for storing beverages that a delivery has been received

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Prevent pilferageEnsure accessibility when products

are neededPreserve quality

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Assign the responsibility for the stored items to a single employee

Keep the beverage-storage facility locked at all times

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To ensure the timely release of beverages from inventory in the needed quantities

To prevent the misuse of alcoholic beverages between release from inventory and delivery to the bar

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StandardsCarefully set issue quantities Issue beverages only to authorized

people

Standard ProceduresEstablish par stocks for barsSet up a requisition system

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To ensure that all drinks are prepared according to management’s specifications

To guard against excessive costs that can develop in the production process

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Shot glass (plain or lined) JiggerPourerAutomated dispenser

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Method I1.Total number of ounces in bottle ÷ Standard

portion size (ounces) = Number of drinks per bottle

2.Cost of bottle ÷ Result from Step 1 = Standard drink cost

Method II1.Cost of bottle ÷ Total number of ounces in bottle

= Cost per ounce2.Result from Step 1 × Standard portion size =

Standard drink cost

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Each card should include: Name of drink Drink sales price Drink cost Cost percent Quantity and cost of Individual Ingredients Total quantity and cost of mixed drink Type of glassware Recipe procedure

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Management observes bar operations Designated employee observes others

working at the bar and reports back to management

Individuals unknown to the bartender visit the bar, observe employees, and report back to management

Closed-circuit television systems permit observation from some remote location

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1.The Cost Approach Cost percent methods Monthly calculations Cost calculations by category Daily calculations2.The Liquid Measure Approach Ounce-control method3.The Sales Value Approach Actual sales record method Average sales value method Standard deviation method

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Opening beverage inventory+ Beverage purchases this month= Total available for sale this month– Closing inventory this month= Value of beverages issued to the bar 

Bar inventory value at the beginning of the month– Bar inventory value at the end of the month= Bar inventory differential 

Value of beverages issued to the bar+/– Inventory differential= Cost of beverages consumed

Beverage cost percentage = Beverage cost ÷ Beverage sales

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Added to beverage costFood to bar (directs)Storeroom issuesMixersSubtracted from beverage costManagers’ drinksSpecial promotions

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1.Determine bottle size and drink size2.Calculate drinks per bottle3.Multiply drinks per bottle by drink price to get

sales value per bottle 

ExampleBottle size: 1 liter; drink size: 1 ounce33.8 drinks per bottle33.8 × $3.00 = $101.40

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By comparing the price of the alcohol sold as straight drinks to the price of the mixed drink, a more accurate picture of potential sales values emerges

To find the differential:  Sales value of bottle of alcohol ÷ Number of ounces in

bottle = sales value/ounce Sales value/ounce x Number of ounces in mixed drink =

Sales value of alcohol sold as straight drinks If sales value of alcohol sold as straight drinks > sales price

of mixed drink, then the difference between the two figures is the negative mixed drink differential

If sales value of alcohol sold at straight drinks < sales price of mixed drink, then the difference between the two figures is the positive mixed drink differential

Finally, multiply the +/– differential by the number of mixed drinks sold to determine the adjusted total bottle sales value for spirits

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Calculations1. Average inventory = (Opening

inventory + Closing inventory) ÷ 22. Turnover rate = Cost of

beverages sold for a period ÷ Average inventory for the period

Generally accepted turnover ratesSpirits—1.5Beers—2.0

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Optimize the number of salesMaximize profitControl revenue

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To socializeTo conduct businessTo eatTo enjoy entertainmentTo relax or kill time

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Establishing drink prices that will maximize gross profit

Influencing customers’ selections

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Dram shop laws are state statutes that hold the serving establishment and the server financially liable for damages to third parties resulting from the serving of alcoholic beverages to intoxicated customers

Given these laws and changing social attitudes that encourage responsible drinking, managers try to optimize sales rather than maximize them

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Working with an open cash drawer Under-ringing sales Overcharging customers Undercharging customers Overpouring Underpouring Diluting bottle contents Bringing one’s own bottle into the bar Charging for drinks not served Drinking on the job

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Current Compensationo Direct: salaries, wages, tips, bonuses, commissionso Indirect: paid vacations, health benefits, life insurance, free meals, free living accommodations, use of employer-operated recreational facilities, discounts on accommodations at other properties within a chain

Deferred Compensationo Pension benefitso Social Security

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Labor turnover rate Training Labor legislation Labor contracts Use of part-time staff Outsourcing Sales volume Location Equipment

Layout Preparation Service Menu Hours of operation Weather Competent

management

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Labor turnover rate = Number of departing employees ÷ Total number of employees on staff

 Break-even for staying open an

additional hour = Fixed costs ÷ (1 – Variable rate)

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With all full-time staff:

Wages: 4 dishwashers × 35 hours × $7 per hour = $980

Benefits: $980 × 20% = $196

Total labor cost: $1,176

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With full-time and part-time staff: Full-time dishwashers

Wages: 2 dishwashers × 35 hours × $7 per hour = $490

Benefits: $490 × 20% = $98

Part-time dishwashers Wages: 10 shifts × 7 hours × $4.50 per hour = $315

Benefits: $315 × 10% = $31.50

Total labor cost: $934.50

1. Organize the enterprise2. Prepare job descriptions3. Schedule employees

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Job objectivesSpecific tasks required to achieve

objectivesPerformance standardsKnowledge and skills necessaryEducation and experience required

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Interviews and observations are designed to provide information about the following:

Answer three questions What is to be done? When is it done? Where is it done?Contain three parts1.Heading that states the job title and the

department in which the job is located2.Summary of the duties of the job (typically in

paragraph form)3.List of the specific duties assigned to the job

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1.Determine the number of employees needed to serve a specified number of covers in a certain time periodExample: 8 servers for 500 covers in a three-hour lunch period

2.Standard work hours = Number of servers × Number of hours8 servers × 3 hours = 24 work hours

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Number of standard work hours × Hourly wage = Standard cost

Example: 24 hours × $4.00 per hour = $96 standard cost

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Objectives Approaches to training Training methods Instructional timetables Location Lesson plans Trainer preparation Trainee preparation Training session(s) Evaluation

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On-the-job versus off-the-jobStructured versus unstructured Individual versus group

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In general, trainers first select a training approach; then they employ a variety of training methods that compliment the approach

By hearing information (oral)By seeing information (visual)By doing the skill (kinesthetic)

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Studies show that people tend to prefer learning things in one of three ways:

Lecture Demonstration Role playing Individual assignments Field trips Seminars Case studies Panels Programmed instruction

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Therefore, an effective training should use a variety of methods:

Objectives of the training Instructional method being usedSkills trainees will learn

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Since people learn better when they understand the need for learning, an introduction to any training should always include:

1. General background2. Specific duties of a job3. Specific procedures for carrying

out the duties4. Summary

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1. Customers2. Employees3. External

agencies/organizations/groups4. Managers

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Government agenciesChain organizationsFood criticsRating organizations

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1.Meet with appropriate staff to point out the problem and to determine its cause

2.Identify all appropriate corrective measures that might be adopted

3.Select the best corrective measure from among the alternatives

4.Institute the selected measure5.Monitor performance to be sure that the

corrective measure has the desired effect

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Inadequate performanceUnsuitable standards Inappropriate organization

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Improper materials provided to workers Lack of required equipment or tools Need for additional training Inadequate management or supervision Poor union/management relations Personal problems away from the job Difficulties with interpersonal relations on the job Inadequate compensation Illness Poor working conditions Improper work schedules

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