2015 DMC2523/2413 Menu Planning and Cost Control

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DMC2523 MENU PLANNING AND COST CONTROL
Topic 15
Beverage Purchasing Control
Principles of Food, Beverage, and Labor Cost
Controls, Ninth Edition

2. Alcoholic Beverage Classifications
 Serving Alcoholic Beverages
 Alcoholic beverages refer to those products which
are meant for consumption as a beverage, and
where a significant amount of ethyl alcohol content
is present.
 Alcoholic beverages are generally classified as:
 Beers (lager beers and ales)
 Wines (red, white, rose)
 Spirits

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In moderate doses, ethyl alcohol is a mild
tranquilizer; in excessive doses, it can
become toxic.
 While the special requirements surrounding
the service of alcohol are many, controlling
beverage costs is similar to controlling food
costs.
Alcoholic Beverages

4. Beer is a fermented beverage made from
grain and flavored with hops.
Wine is a fermented beverage made from
grapes, fruits, or berries.
Spirits are fermented beverages that are
distilled to increase the alcohol content of
the product.

5. Wines
 Varietal: named for the variety of grape that
predominates the wine.
 Brand Name: known primarily by the name
of the producer.
 Geographic: named for its place of origin,
can be as large as a region or a district or
as small as a vineyard, Fr. Chateau.
 Generic: named for a well-known wine
producing region, but not produced there.
i.e. “California Burgundy”

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Additional Wines & Beverages
 Sparkling wines: Champagne, Asti Spumanti, sparkling
burgundy
 Fortified wines: wines with a small quantity of spirits or brandy
added; Port & Sherry
 Wine coolers: blends of wine and fruit juice
 Blush wines: “pink wine” combination of white and red grapes,
light and sweet

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Alcohol Production Processes
 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

8. Nonalcoholic Beverages
 Coffee, Tea or Milk
 Carbonated
 Non-carbonated
 Mixers
Other ingredients
 Garnishes, Cream, Lemon &
Lime juice

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Types of Establishments
 Controls must be modified to meet the
characteristic and inherent increased
responsibility created by the sale of alcoholic
beverages.
 There are two primary classifications of
establishments that serve alcohol:
restaurants that use it as an accompaniment
to food, and those locations whose primary
offering is alcohol.

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Purposes of Beverage
Purchasing Controls
 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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Factors Used to Establish Quantity
Standards for Beverage Purchasing
 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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Two Types of States for Purposes of
Beverage Purchasing
 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

13.  Dramshop laws, passed in many states,
shift the liability for acts committed by
intoxicated individuals from the individual to
the server or operation that supplied the
alcohol.
 In all states, the sale of alcoholic
beverages is regulated either by the licensing
of establishments that are allowed to sell
alcoholic beverages (license states) or by
direct control and sale of the products by the
state (control states).

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While food products only require one level of
quality per item, several qualities are chosen for
alcoholic beverages.
Beer is the most highly perishable of beverage
products, with a pull date of only a few months.
Operators must, therefore, carefully select
brand and packaging methods.
Generally, clientele, ambiance, and menu help
determine what beer product will be selected.
Purchasing Beverage Products

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Beer is typically sold in cans, bottles, or kegs.
Draft beer (beer from kegs) is often the preferred
choice and cheaper for operators to serve.
However, special equipment is required.
The shelf life of keg beer is the shortest of all
packaging types, ranging from 30 to 45 days for
an untapped keg, that is, one that has not yet been
opened by the bartender, and even fewer days for
a keg that has been tapped (opened).
Purchasing Beverage Products

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Wine must also be selected according to
product and packaging.
Operators generally sell wine by the glass,
bottle, and split or half bottle.
If wine is also purchased for cooking, it will
be bought from the beverage wholesaler also,
but generally not of the same quality as that
purchased for drinking.
Purchasing Beverage Products

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As a good manager, you will build a wine
list, the term used to describe your menu of
wine offerings, that fits your own particular
operation and guest expectations.
 In developing a wine list, operators must
offer choices for guests who want to spend a
lot or a little.
 A vintner is a wine producer.
Purchasing Beverage Products

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However, avoid the temptation to offer too
many wines on a wine list.
Wait staff should be trained to be
knowledgeable but not intimidating to guests.
Generally, if operators are having trouble
selling wine, the difficulty lies in the delivery
of the product rather than with the product
selected.
Purchasing Beverage Products

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Distilled spirits have an extremely long shelf
life; therefore, a wrong purchase is not usually a
disaster.
Quality levels are most pronounced with spirits.
Packaging is not a particular issue when dealing
with spirits.
Purchasing Beverage Products

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Call liquors are those requested by brand
name; extremely expensive call liquors are
sometimes referred to as premium liquors.
Operators generally charge a higher price for
call and premium liquors.
•In general, operators will select spirits in two major
categories, well and call.
Well liquors are those spirits that are poured when the
customer does not specify a particular brand name.
Purchasing Beverage Products

21. Purchasing Beverage Products
 Remember, just because a customer is
price conscious and orders a well liquor,
does not mean that he or she is not also
quality conscious.
 Quality spirit products at fair prices build
customer loyalty.
© John Wiley & Sons, Inc. 2009

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Chapter 14
Beverage Receiving,
Storing and Issuing
Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition

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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
Standards for Beverage Receiving

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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
4.Compare the invoice to the order
Standard Procedure for Beverage
Receiving

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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
Standard Procedure for Beverage
Receiving (continued)

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 Prevent pilferage
 Ensure accessibility when products are needed
 Preserve quality
Storing Control Objectives

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 Assign the responsibility for the stored items to a single
employee
 Keep the beverage-storage facility locked at all times
To Secure Storage Areas,You Have Two
Choices:

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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
Beverage Issuing Objectives

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Standards
 Carefully set issue quantities
 Issue beverages only to authorized people
Standard Procedures
 Establish par stocks for bars
 Set up a requisition system
Beverage Issuing Standards and
Standard Procedures
© John Wiley & Sons, Inc. 2009

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Chapter 15
Beverage
Production ControlPrinciples of Food, Beverage, and Labour Cost Controls,
Second Canadian Edition

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Learning Objectives
 15.1 Identify the two primary objectives of beverage production control.
 15.2 Describe the standards and standard procedures necessary for
establishing control over beverage production.
 15.3 List four devices and means used to standardize quantities of alcoholic
beverages used in beverage production.
 15.4 Describe the use of standardized glassware in beverage control and
the importance of stipulating specific glassware for each drink.
 15.5 Explain the significance of standard drink recipes in beverage control.
 15.6 Calculate the standard cost of any drink, given a standard recipe and
the current market prices of ingredients.
 15.7 Calculate the standard cost-to-sales ratio for any drink, given its
standard cost and sales price.
 15.8 Explain why bar operations should be monitored frequently and list
four techniques for monitoring the performance of bartenders.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Beverage Control
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
32

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Objectives of Production Control
1. To ensure that all drinks are prepared according to
management’s specifications
 Take into account the tastes of expected customers
1. To guard against excessive costs that can develop in the
production process
 Management’s desire to prepare drinks of appropriate quality
and size
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Quantity Standards and Procedures
Use of a device for measuring alcohol:
 Shot glass
 Plain
 Lined
 Jigger
 Pourer
 Manual
 Automatic
 Automated dispenser
 Free pour
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Quantity Standards and Procedures
Glassware:
 Controls:
 Liquor quantity
 Overall drink size
 Select appropriate:
 Size
 Type
 Variety
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Quality Standards and Procedures
Standard Drink Recipes
Management must determine which recipe will be used.
 Manhattan 1
 2 ½ oz. blended rye whisky
 ¾ oz. sweet vermouth
 Dash of bitters
 Manhattan 2
 1 ½ oz. blended rye whisky
 ¾ oz. sweet vermouth
 Dash of bitters
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Calculate the Cost of Straight Drinks
Method I
Total number of ounces in bottle ÷ Standard portion size
(ounces) = Number of drinks per bottle
Cost of bottle ÷ Result from Step 1 = Standard drink cost
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Calculate the Cost of Straight Drinks
Method II
Cost of bottle ÷ Total number of ounces in bottle = Cost per
ounce
Result from Step 1 × Standard portion size = Standard drink
cost
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Calculate the Cost of Mixed Drinks
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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One Type of Standard Recipe Detail and Cost Card
Item Gin Martini Bar Recipe # 53
Drink sales price $4.50
Drink cost $1.00
Cost percent 22.22%
Ingredients Quantity Cost
Gordon’s Gin 2 oz $0.82
Martini & Rossi Dry Vermouth ½ oz $0.14
Cocktail olive 1 ea $0.04
Totals 2½ oz $1.00
Glassware 4 oz. cocktail
Procedure Pour gin and vermouth into glass shaker. Add cracked ice.
Stir gently. Strain into 3 oz. cocktail glass. Add olive and
serve.

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Monitoring Sales
It is essential that the sales price be standardized for all drinks.
Observing employee performance:
1. Manager personally observes bar operations regularly.
2. Designated employee, such as a head bartender, observes
bar, reports unacceptable performance and problems.
3. Individuals unknown to the bartenders visit the bar, observe the
employees, and report problems.
4. Closed-circuit television systems can be installed to permit
observation of bartenders and operations from a remote
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Key Terms
 Cocktail, p. 300
 Free pour, p. 397
 Jigger, p. 394
 Lined shot glass, p. 394
 Mixed drink, p. 400
 Plain shot glass, p. 394
 Pourer, p. 395
 Shot glass, p. 394
 Standard drink recipe, p. 400Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Chapter Web Links
 Accubar:
 www.accubar.com/Products/banquet-inventory.asp
 Alcohol Controls:
 www.alcoholcontrols.com/bridlicosy1.html
 Riedel Canada Glassware:
 http://riedelcanada.ca/
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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43. Copyright
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
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Chapter 16
Monitoring Beverage
Operations
Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition

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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
Ways to Monitor
Beverage Production

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1. The Cost Approach
 Cost percent methods
 Monthly calculations
 Cost calculations by
category
 Daily calculations
2. The Liquid Measure
Approach
 Ounce-control method
3. The Sales Value
Approach
 Actual sales record
method
 Average sales value
method
 Standard deviation
method
Approaches for Monitoring Beverage
Operations

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Cost Percent Formulas
and Equations
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

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Cost Percent Formulas
and Equations
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 cost
 Food to bar (directs)
 Storeroom issues
 Mixers
Subtracted from beverage cost
 Managers’ drinks
 Special promotions
Adjustments to Beverage Cost

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1. Determine bottle size and drink size.
2. Calculate drinks per bottle.
3. Multiply drinks per bottle by drink price to
get sales value per bottle.
Example
Bottle size: 1 liter; drink size: 1 ounce
33.8 drinks per bottle
How to Calculate Bottle
Sales Values

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1. Average inventory = (Opening inventory + Closing inventory) ÷ 2
2. Turnover rate = Cost of beverages sold for a period ÷ Average
inventory for the period
Generally accepted turnover rates
Spirits—1.5
Beers—2.0
Inventory Turnover
© John Wiley & Sons, Inc. 2009

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Chapter 17
Beverage Sales Control
Principles of Food, Beverage, and Labor Cost Controls, Ninth Edition

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 Optimize the number of sales
 Maximize profit
 Control revenue
Objectives of Beverage
Sales Control

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 To socialize
 To conduct business
 To eat
 To enjoy entertainment
 To kill time
Reasons That People Patronize
Beverage Establishments

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Market segment: Subgroup of potential
patrons with similar characteristics
Dram shop laws: 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
Automated bar: Computerized device for
dispensing beverages and simultaneously
registering sales
Important Chapter Terms

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 Establishing drink prices that will maximize gross profit
 Influencing customers’ selections
In Beverage Operations, Profit
Maximization Is Accomplished by:

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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
Unacceptable Bartender
Work Habits
© John Wiley & Sons, Inc. 2009