Are Your Cocktails Actually Making You Money? (Part 1 of 2)
Updated: May 1
Barkeeps. Tapsters. Bartenders. Whatever you might call them, modern mixologists have taken center stage as the newest celebrities of the culinary world. These cocktail masters play an important role in creating exciting new recipes and trends while keeping customers entertained at their favorite restaurants and bars. Some even share the same notoriety as celebrated Michelin star‒awarded chefs, and business owners vie to have the best of the best pouring at their establishments.
Setting aside the glitz and glamour surrounding these award winning masters of mixology, what are the true economics of cocktail service at the regular establishments that make up 99.99% of the restaurants and bars around the world? To put it another way, what is the actual profit potential of having a bartender in-house? Although it is true that restaurants can make great money from cocktail sales, the revenue potential can be surprising when the practical realities behind drink creation are examined.
As with most things, the true value-opportunity of your cocktail program can be found through simple math and a few easily defined variables. To find your beverage program’s maximum gross revenue potential, we look at the two key inputs required to forecast best-case top line revenue. Drink Velocity and Sales Price.
Drink Velocity = the average number of drinks that can be made in an hour.
Sale Price = the average sales price of each drink.
Using this simple formula, we arrive at a surprising result.
By analyzing the two key elements of sales price and drink velocity that determine your beverage program’s revenue potential, standard cocktails, which most would think to be the most profitable offering at your establishment, are in the lower-half. And those extraordinary specialty cocktails? They actually contribute the lowest revenue potential simply because they require such a large time investment for every drink made. And this is even before taking into consideration the cost of your bartender and its impact on your drink margins.
Photo by Kobby Mendez
By understanding these numbers we learn that although cocktails may provide the highest sales price (and also often benefit from the lowest product cost, which will be covered in Part 2 of this article), there is a clear and powerful need to increase cocktail drink velocity. And just as technology has improved many other aspects of our lives, there are now compelling solutions for the cocktail time‒trap in the form of professional automated bartending machines. The most powerful, efficient and value-enhancing of these products to automate your professional cocktail program is Somabar, the industry-leading countertop professional bartending system.
Using Somabar as an example, which crafts each cocktail in 10 seconds or less, the table below illustrates that by increasing drink velocity alone you can dramatically increase your cocktail program’s maximum gross revenue potential. Not only does this newfound efficiency result in a 4x improvement in the classic cocktail category, but cocktail potential is now more than double that of wine and beer, which previously led the pack.
Even though high-velocity automated drink mixology is the quickest and least costly way for your cocktail program to leapfrog all other alcohol categories and become your best performer, it does not mean that your bartender has become a relic of the past. For locations with existing bartenders, human interaction is, and will always be, a great value to your establishment, along with the entertainment, pageantry and “wow” factor of watching drink creation in action. For these locations, classic cocktail automation will greatly help excellent bartenders focus on their strengths by rapidly accelerating classic cocktail service through automation and freeing them to better interact with customers. And in locations that do not have bartenders, automation such as that provided by Somabar is the ideal solution as it allows for high-velocity professional cocktail service without the need for hiring additional waitstaff or any mixology training.
In Part 2 of this article, we will explore the costs associated with cocktail creation that impact your margins, along with modern methods to further optimize and supercharge your cocktail program.
Photo by Somabar