Bar Management| Industry & Culture

2-Minute Tuesdays: Keeping Your Bar Menu Profitable

By Trevor Bernatchez

One of the most important elements of any bar program is menu pricing. The challenge is that fluctuating ingredient costs sometimes make it difficult to stay on-top of menu prices.

TMT-Bar Menu Profitable-1

In our most recent edition of 2-Minute Tuesdays, Sr. Manager of Customer Education 
Trevor Bernatchez, outlines four steps to take that will keep your bar menu as profitable as possible.

Read on to learn more, or watch the whole video (~2 mins) above.

One of the most important elements of any bar program is menu pricing. The challenge is that fluctuating ingredient costs sometimes make it difficult to stay on-top of menu prices. 

Generally, it’s hard to raise menu prices based on cost increases because your guests may not be willing to pay more, and you don’t want to constantly print new bar menus if you can avoid it. 

Today, we’re going to briefly touch on how to quickly check into some of your top selling products to make sure that current menu prices are generating the profits you need for your business. If they aren’t, we’re going to cover some simple changes you can make to drive greater profits as soon as possible.

Step One:

First, focus your attention on your top 5-10 selling menu items since that is where the largest opportunity lies - If you don’t know this information off of the top of your head (which you probably do) then you can check your point-of-sale system to see what your top-selling items were in the last 30 days or so.

Step Two:

Next, make sure to update your ingredient costs with the most recent vendor invoices. This is critical because it’ll show what your current menu item profitability is versus what you originally priced it at. Use these newly updated costs to calculate the new COGS for each of these top-selling items.

Step Three:

Then, it’s time to experiment with opportunities to substitute less-expensive ingredients, re-price it, or feature it differently on the menu. If you’re finding that you are hitting your pricing threshold for the new price here, this is also a great time to start experimenting with different ingredients to bring the overall cost of this drink down while simultaneously increasing the profits.

Step Four:

Now, based on any changes you’ve made, calculate your new expected profits to see how performance compares to this drink’s previous profit margin. Even one small change on one drink can bring in thousands more in profits over the course of the year!

If there aren’t any pricing changes or substitutions that you can make based on what you know about your guests, or any other limitations, then use this new knowledge about menu pricing to train your staff to best position the business for success by featuring your most profitable menu items more often. 

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