In our last blog, we discussed how liquor shrinkage (also known variance) can have a huge impact on the profitability of your bar.
We learned that by taking the time to accurately record your bar inventory, you can gain real insight into how much your business is losing out due to shrinkage and where exactly your bar is experiencing product loss.
To plug the leak in your bar and stop variance eating into your profits, it’s crucial that you take some steps to train your employees and reduce the places where shrinkage may be occurring. For many bars, overpouring is one of the leading reasons for variance.
That’s why, in this blog, we’re going to take a look at some methods your bar can use to reduce overpouring. Before we get into that, however, let’s first take a quick recap on what liquor shrinkage actually is and how to calculate it.
A quick recap on liquor shrinkage
Liquor shrinkage is when your bar loses inventory due to factors other than sales. This could be anything from employee theft, overpouring, spillage or human error (which includes anything from counting your bar inventory incorrectly to ringing items into your POS wrong).
Simply put, shrinkage is the difference between the amount of product your bar has sold and the amount of product your bar has used over a specific period of time.
To calculate this, you need to calculate your cost of goods sold (COGS) and usage rates. Once you know these inventory calculations, you can then use the below calculation to find your shrinkage.
Shrinkage = (costs of goods sold) - (usage).
If you want to learn more about liquor shrinkage and how to calculate it, please read our blog ‘Bar Inventory Management: How to Reduce Liquor Shrinkage’.
How does overpouring impact your bar?
Overpouring is the action of pouring more liquor into a drink than is supposed to be in there. While it may sound fairly trivial at first, a few ounces here and a few ounces there can really add up to impact your bar’s profitability.
Overpouring in your bar can happen for a variety of reasons.
For most bars, overpouring is often unintentional and caused by a lack of measuring best practices or tools. Free pouring or eye-balling liquor pours is almost akin to just throwing product down the drain.
Overpouring, however, can also be intentional. Adding in an extra shot for a friend, topping off a glass of wine to finish the bottle sooner or inconsistent pour amounts are all examples of overpouring that impact your bar’s bottom line.
Some ways to reduce overpouring
One of the leading reasons for liquor shrinkage in a bar is overpouring. While it seems like a straightforward task for any bartender, overpouring is no rare occurrence and it can happen to anyone within the industry.
The question is - what can your bar do to minimize the financial loss caused by overpouring?
We have listed a few tips below:
- Take stock of your bar
If you aren’t regularly performing inventory counts of your bar, then there’s no way you can know what your business has in stock or how much liquor you are losing on a regular basis. That means you have no visibility into how much your bar might be losing from the simple act of overpouring.
To solve this issue, use a bar inventory management system to gain complete control over your bar’s inventory. The insights you gain from proper inventory management will show you what your pour cost percentage is, what your liquor shrinkage is and give you a good idea of where you might be losing money from variance.
- Use tools to properly measure your pours
To prevent liquor shrinkage from free pouring and guesswork, make sure your bar utilizes proper measuring tools to measure exactly how much liquor you pour into each beverage. Jiggers and other precisions tools are all fantastic ways to ensure your employees are pouring correctly.
- Take the time to train your employees
Your employees are the frontline of your bar. They are the people pouring your products, and it’s important that they are fully-trained in the methods and best practices that help to reduce overpouring in your bar.
Take the time to train your employees in some pouring best practices, as well as how to properly use any measuring tools behind the bar. Providing a resource behind the bar that they can refer back to if needed can help ensure consistency.
Once you take the time to reduce overpouring in your bar, profits will follow. Want to learn more about bar inventory and reducing shrinkage? Contact Sculpture Hospitality today. Our team of highly-skilled and experienced inventory experts would love to answer your questions.