Innovations: Software helps restaurants and bars reduce liquor waste

Restaurant and bar owners in the Milwaukee area can increase their profitability and reduce wasteful practices by using software from Toronto-based Bevinco Corp.

Greg Clark acquired Bevinco’s franchising rights in Wisconsin and formed Bevinco of Brew City, with a home office in Waukesha and a remote office at 610 N. Water St. in downtown Milwaukee.

Bevinco uses custom-designed software to measure existing bottles of alcohol against purchase orders and sales receipts on a weekly or bi-weekly basis to determine how much product went missing and was not sold, and how that affects the company’s profitability.

“We start by doing a secret audit at first,” Clark said. “That way, none of the bartenders change their habits. After we conduct the secret audit, we can show owners how much they are losing on average in a one-week time period.”

According to Clark, all restaurants experience some degree of liquor inventory loss, but some could be losing more than $3,000 per week.

“Almost no one believes me when I first show them how much they lost,” Clark said. “They are shocked and generally want to know right away how they can fix it to get that money back.”

Lost liquor can occur due to over pouring, running of the beer tap, spilled drinks, drinking behind the bar and employees giving away drinks, Clark said.

Once an owner decides to advance beyond the secret audit, Benvinco employees will conduct a meeting with the entire staff and walk them through the audit process, Clark said.

Typically, Bevinco employees will come every week to count the liquor, beer and wine inventory. All bottles and kegs are weighed on a scientific scale that is connected to a laptop, equipped with the Bevinco software. The inventory is then tallied against weekly sales, pinpointing any discrepancies between liquor amount sold and amount used.

“We can then issue a variance report to an owner that shows the total amount of ounces used, the total amount sold and what those numbers mean in terms of potential revenue,” Clark said.

According to a variance report on a local bar, about 1,500 ounces of liquor went missing in one week. That translates to a more than 35 percent shortage, which according to Clark, translates into around $4,500 of potential retail value and a 59.3 percent Bevinco efficiency rating.

“We want to strive for a rating of 95 percent or better after three weeks,” Clark said. “Even owners that allow drinking behind the bar or for some drinks to be given away generally are shocked at the retail potential of 1,500 ounces.”

After the audit, Clark will meet with the staff and give the owner some tips on how to curb some of the habits that lead to loss of revenue. The tips can be as simple as just making the staff aware that the audits are being done, making sure everyone understands portion size and drink recipes, or as severe as taking away staff discounts, shift drinks and drinking behind the bar.

Clark’s employees are former bar or restaurant owners who understand the stress associated with loss of revenue. Bevinco of Brew City has around 30 bars and restaurants as clients.

“Most of our business comes from referrals, one friend telling another that what we do can really help their business,” Clark said. “Because of that, I know that bars that call us really want us to come, so I have no problem going anywhere east of Madison and south of Sheboygan.”

It takes an average of three hours to perform an audit, depending on the size of the inventory, Clark said. Bevinco charges an average of $200 per audit, depending on how long the audit takes.

“After the first few weeks, what we charge is three to four times less than what owners will be getting back in revenue once they can see the numbers associated with what they are losing,” Clark said.

Hans Weissgerber III, owner of Riptide Seafood Bar and Grill located at 649 E. Erie St, and The Old German Beer Hall, 1009 N. Old World Third St., has been a Bevinco customer for more then a year.

“Before we used Bevinco, we had no idea what we were losing or how to control it,” said Josh Neureuther, general manager of the Beer Hall. “Bevinco is very precise. This is a very real way to know, and it gives you the ability to target where the waste is occurring if you want.”

If revenue doesn’t go up, Bevinco has the ability to perform random daily audits in order to pinpoint which shift is losing the most liquor, but it usually doesn’t get that far, Clark said.

“Usually, the staff changes their habits before it gets to that point,” he said.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display