Hello Hospitality professionals,
As someone who has been involved in the hospitality industry for almost 20 years, I wanted to discuss a few sound inventory practices to get you through the busy summer months and beyond. Depending on your locations, the summer can bring about a great boom for your business, especially as people rush out to get some sun and a few drinks on a nice patio. With the summer madness, it’s easy to let some things slip, especially on the inventory side. Below are a few observations and suggestions from the many different locations I have worked at over the last decade in Toronto.
FIFO:
The first one seems simple but is very easy to let slide. FIFO—first in, first out. Your kitchen uses this and so should your bartenders and bar backs. Many locations increase their beer and liquor orders in the summer months to deal with the volume and as a result FIFO goes out the window. This is especially true with bottled beer. Take a look at your cold room and you might just find one or two old cases of beer under a large stack of new ones. A telltale sign is when the boxes on top have a new and completely different design than those on the bottom. Your inventory levels were getting low and the old cases got buried under the new order. Now, these lonely cases will continue to be buried as you stock up for the summer. The same thing can happen at your bars. As the staff restocks the fridges, the product isn’t necessarily rotated, and the same ten bottles become stuck at the back. And, just like those cases, the labels start to differ as they sit in the back in obscurity. As a result, these beers sit, spoil and become useless just because the staff didn’t rotate the product. Your money is left to spoil in old broken cases in your cold room. Rotate your product, keep it fresh and ensure no bottle is left behind.
PAR LEVELS:
Another trend that pops up is over-stocking for the next big thing. We see trends come and go each year, whether it’s cider, rosé or the next great gin, bar managers will order what’s new and hot and order a lot of it. This might leave you with too much stock, not enough space, and a lot of rosé that no one wants to drink in October. I encourage you to check your sales and consumption frequently, weekly or monthly at the longest. Keep an eye on what is moving and what isn’t. If that great gin from last year isn’t as popular this year and you have eight bottles sitting in your storage, consider sending it back. Don’t leave your money on the shelf. It takes a skilled leader to keep your par levels balanced with your sales, while keeping stock lean and the product moving. You reduce the risk of your money sitting on the shelf after the patios close and times slow down by staying on top of your par levels. Don’t be afraid to send back product that isn’t moving even if it did ten months ago. Consumers are fickle and you can’t always predict what will be selling but sitting on too much of a ‘maybe’ isn’t a great way to recover your hard-earned margins.
FLAT WINE:
Finally, keep an eye on your wines. With stock being moved to patios, there is a lot of risk associated with wines. Staff can open too many bottles of the same wine, let them sit out in the sun and spoil or just plain forget about them. More often than not, locations will have 2-4 bottles of the same wine open in their fridges, eventually leading to spoilage. Other bottles are opened, transferred from one bar to another bar and your wine is left to spoil. Have a strict policy to only have one bottle open at a time. This is particularly important for white and sparkling wine. Both don’t do well in hot weather and if left in a fridge or out on a bar can turn bad quicker than people realize. Along those lines, also make sure your wines are properly sealed. It’s all too common to see prosecco or sparkling wine left in a fridge with no cap or stopper—this is a sure-fire recipe for pouring your money down the drain.
If you keep these three points in mind, you can help keep your margins tight, profits up, and make your establishment a well-oiled machine!
Many thanks,
Dave
