How To:
ur Cost-out Yo Beverage Program
The Price is Right (It Better Be)
Using tools like, cost cards, targeted beverage cost percentages, and contribution margins, the author recently audited a bar’s beverage costing to come up with the best possible pricing. Here’s how it works. By Brian J. Warrener, Associate Professor The College of Management, Johnson & Wales University
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t’s a good time to be in this business. The market’s appetite for creativity and quality at the bar and the efforts of a new generation of supremely talented and dedicated bartenders has converged to create the cocktail renaissance. But it’s also a good time to remember that it is a business and success depends on operators refocusing on operational controls, especially key success measures that depend on accurate and systematic costing and pricing. 22
Bar Business Magazine July 2013
The Key Financial Metric: Cost of Goods Sold Percentage (CGSP) Most operators understand the need to constantly monitor the financial results of their operations. One of the key metrics employed in the industry has traditionally involved measuring actual beverage cost percentage against a targeted or expected beverage cost percentage for a given period, say a week. An inventory is taken at the beginning and at the
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