HM-6459A FOOD AND BEVERAGE COST CONTROL

BEVERAGE CONTROLS AND SERVICE PROCEDURES

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Module 004 BEVERAGE CONTROLS

AND SERVICE PROCEDURES

Learning Objectives:
After reading this module, you should be able to:

 beverage control, including portion size control (PSC) and standard

drink recipes (SDRs);

 other beverage controls, such as the following:

o bar par stock
o color-coded outlet stickers or stamps
o waste, breakage, spoilage, and spillage
o interbar transfer
o control of cash bars
o control of hosted bars
o banquet beverage storeroom procedures

 beverage cost variance;

 service procedures regarding wine, liquor, and beer service; guest

requests for

 unusual recipes; and suggestive selling techniques.

Cost control isn’t simple; it takes teamwork. Controlling costs in all areas is
always the objective, but the truth of the matter is, while you can cut costs in
payroll, you must not jeopardize service. Customers will pay more for a meal with
great service, and will recommend and return.
-Fran Rizzo,
Hotel and Restaurant Financial Consultant
Researching beyond the coverage of this module is highly encouraged to
supplement your understanding of the topics covered. Always, think and see
beyond the box.
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The citation provided is a guideline. Please check each citation for accuracy
before use.

So, what are we waiting for? Let us now explore the Food and Beverage Cost
Control.

Introduction

Myla played the role of a secret shopper in the story above. A secret
shopper measures and compares customer service levels, spots trends, and
provides accurate feedback in the form of mystery guest hotel, restaurant,
and spa reports. Managers view secret shopping as an independent
verification of what is working and what needs fixing. There are several
companies on the Web that offer these types of services to hotels and
restaurants.
Despite the worst-case scenario painted in this story, your staff can
actually play very positive roles in the beverage profitability of your
establishment. While you and the management team set up procedures that
establish control over your inventory assets, your servers and bartenders
are out there on the front line, making sure your guests’ needs are heard
and answered. Again, you are balancing the needs and preferences of your
clients with your profit-making goals. Both control in the back of the house
and service in the front of the house can help you achieve these goals.
The starting point in beverage control and sales is the establishment
of portion size control (PSC) and standard drink recipes (SDRs). All
employees and managers must work to see that these two controls are
followed. Without them, you will not be able to evaluate valid data or to
control costs. The objectives of these controls are
 to monitor and identify deviations from standard operating
procedure (SOP) so that you can quickly correct the situation.
 to aid the manager in compiling cost data, which is used to compare
and analyze potential versus actual cost.
 to provide a basis for consistency.
 to set ingredient quantity guidelines.
 to simplify and standardize training information.
 to serve as a continuous source of reference for everyone involved
in service.
 to act as a watchdog for combating both internal and external theft.

Portion Size Control (PSC)

Portion size control is the standardization of beverages in order to

control both quantity of liquor and quality of the drink. It is vital to create
a method for pouring exact portions because you are often dealing with
numerous bartenders and possibly high turnover. The point here, as
always, is consistency. This is undeniably important to building a client
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base. New customers expect your Bloody Mary to taste like others they
have had, and repeat customers expect it to taste like the last one they
ordered from you.
Meeting customer expectations may be even more important for
good profit than setting your drink prices correctly. Sales price multiplied
by sales volume produces your revenue. You cannot build volume with
drinks that do not meet customer wishes consistently. To achieve this, you
need portion size control (PSC) for each and every drink. When PSC is in
place and followed by the whole staff, the customer will get the same drink
no matter who makes it.
Another advantage of consistency is accurate control of the amount
of liquor poured. If you control the quantity of liquor, you also control costs.
In this way you can maintain your cost-to-sales ratio and protect your
profit. To achieve all of this, standardize three elements of each drink: size,
recipe, and glass.
Size
There are three common methods of measuring liquor. The first is
to use an automated pouring device, with which the major ingredients are
measured and dispensed through a handgun or specialized pourer. These
shut off at pre-established amounts per drink. A second way is for the bar
staff to pour drinks using an established jigger size and to fill them only to
the line on the jigger. A third method is to free-pour. This is a subjective
form of measurement that involves turning the bottle, with a pourer in
place, and pouring upside down at full force. The bartender counts in his or
her head; to pour an ounce, for example, he or she might count “One, two,
three” or “Ten, twenty, thirty.” This method is not recommended because
it is the least accurate; it is only as consistent as the bartender. Free-
pouring varies between bartenders and from day to day. (jigger A
measuring device used to serve predetermined quantities of a beverage)
Inconsistency is one of the biggest sources of guest complaints. Mr.
Jones might receive a perfect Bloody Mary from one bartender at lunch on
Monday; then, on Tuesday at dinner, his drink might be diluted or too
strong or too peppery. Even the same bartender will make very different
drinks at times. The way to combat this is to implement standardized
recipes, discussed later in the module.
Computerized dispensing systems are used for portion control,
perpetual inventory, standard recipe controls, and accuracy in guest
charges. These systems have an electronic control device attached to each
bottle to monitor and control the amount of alcohol dispensed. Beverages
are poured accurately each time. Some systems have check-processing
capabilities that ensure that the guest is charged properly for every drink.
Taking control over the pouring of beverages is one of the most critical
decisions a manager can make. The following are some of the advantages
of using computerized dispensing systems:
 Less time is needed to train bartenders.
 There is less spillage and less breakage.
 Prices are preprogrammed into the machine, so pricing mistakes are
eliminated.
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 Standard recipe pour amounts are consistent and accurate.

 The system deters dishonest employees from stealing or giving
away free drinks.
 Operational control of the bar is improved.
 You have an accurate accounting of the sales and profitability of
each item.
 The system produces the sales, inventory, and employee reports
you need.
There are several automated dispensing systems on the market; not
all of them provide you with every advantage mentioned above. The biggest
criticism is that the systems can break down on occasion. The following are
some other disadvantages:
 Because of the way beverages must be stored, guests cannot see the
bottles or the brand names at the bar. Ambience and brand
promotion are lost.
 Most systems cannot mix all possible drinks that are available.
 Most bar operations do not have a contingency plan for use when
the computer breaks down. Therefore, a malfunction can literally
shut down sales until manual operation is installed.
 A dishonest employee may be able to beat the system by breaking it.
As a manager, you must weigh these advantages and disadvantages
in light of your own operation. You should research the available models
and try them out, weighing your operation’s needs against each system’s
functions. Whether or not you choose an automated dispensing system, you
will still need to establish adequate PSC standards.

Standard Drink Recipes (SDRs)

A successful standard drink recipe, or SDR, is a carefully calculated

relationship of ingredients, with further calculations and standards for the
glass, ice, and garnish. This is one area in which the chef’s expertise can play
an important role; it is advisable to combine the chef’s cuisine with a
suggested drink that goes well with the food. Many diners are calorie-
conscious, however, so chefs may need to keep this in mind when
suggesting drinks. Twelve ounces of regular beer contains 150 calories; 5
ounces of wine contains 100 calories; and 1.5 ounces of 80-proof distilled
spirits contains 100 calories.
There are many bar books to refer to when planning a drink menu
and making recipe calculations. Simply write down the exact recipe for
each drink you serve. Then, train the bar staff to follow the recipes
consistently; this way, they’ll produce a consistent product no matter who
tends the bar.
Prepare each drink and take its photograph; compile these photos
into a visual presentation manual for your bar staff. The following
information should be included:
 The amount of the primary ingredient to be poured (which becomes
the jigger size you need to make available to your staff)
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 The other ingredients and their amounts or proportions to the

major ingredient
 The size of the glass to be used
 The amount of ice in the glass
 The amount of garnish and its arrangement on the glass
The ice in the glass is a key ingredient in any drink made with a
carbonated mixer or juice. Its function is to chill the drink and control the
proportion of liquor to mixer by taking the place of liquid in the glass. The
ice goes into the glass first. The more ice you use, the less mixer goes in the
drink.
Experts will tell you that the size and shape of the ice cubes makes a
difference. With large, square cubes you have to fill the glass more full with
ice, as these cubes have big spaces between them. If you want a strong
proportion of mix in relation to liquor, use less ice or a larger glass. If you
want a stronger liquor taste, use more ice or a smaller glass. All of these
factors must be considered in writing your SDRs and establishing their
consistent use.

Getting Specific: How the Controls Work

Your costs will vary widely when different amounts are poured.
Review the information in Figure 9-1. From a 33.8-ounce (1-liter) bottle of
vodka, you can get 33.8 one-ounce servings, 27 one-and-one-quarter ounce
servings, or 22.5 one-and-a-half-ounce servings. Let’s assume the bottle
price was $12 and you are selling one drink for $3. Watch what happens to
your cost when you have three bartenders who use different pours (Figure
9-2).

Figure 9-1 Control for Liter Sized Bottles

Figure 9-2 Sales Variations with Different Pours

You can see that, for just this one item, the cost difference is
staggering. The difference between the 1-ounce and the 1.5-ounce servings
in terms of cost percentage is 5.92 percent. This is equivalent to Bartender
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B giving away 6.8 drinks while Bartender C gives away 11.27 drinks.
If this difference were applicable to total sales figures, the impact on
your bottom line could be critically significant. If you are not controlling
your recipes (with SDRs) and pours (with PSC), you will need to implement
such measures right away.
Master Beverage Pour Cost Sheet
You can use Figure 9-3 to determine the ingredient costs for your
beverages and to keep them all in one place. The data must be accurate to
be relevant. If you have more than one outlet, use a separate form for each,
as you may have different pricing strategies from one outlet to another. Use
and update these forms for each outlet. The information gives you a ready
perspective on costs across your beverage offerings.

Figure 9-3 Master Beverage Pour Cost Sheet

Other Beverage Controls

The manager is the custodial authority of the beverage storeroom.
He or she will be monitoring the stock of each item at all times. When
everything is systematically in place, he or she can easily notice if
something is missing. One method to systematize your storeroom is to use
bin cards, including a unique bin number for each item.
A typical bin card shows the brand name, bottle size, quantity on
hand, and bin or inventory code number. The minimum or maximum stock
levels may also be recorded on the cards, as this information makes it easier
to determine purchasing needs. The card is then affixed to the appropriate
shelf. Bin cards note each entry and exit of a product. They are also very
useful in a perpetual inventory system. The amount of stock delivered is
added to the quantity on hand, and the amount issued is subtracted. The
number of bottles shown on the bin should always agree with the actual
number on the shelf. Storeroom personnel will need to spot-check
inventory against the bin cards to help keep track of inventory. The
information on the card, then, provides reliable rates of inventory use.
Another aspect of beverage control is eliminating the confusion in
bottle sizes, spelling of names, and different brands. The purchasing
manager should identify every kind of beverage carried in the restaurant
or bar by means of a bin number or item number. Each type of beverage is
assigned a block of numbers. For example, in a four-digit system, gin might
be 1000, rum 2000, tequila 3000, and so on. Then particular brands would
fall into those categories—for example, Tanqueray is 1001, Beefeater’s is
1002, and so on. This system makes storage, inventory, par stock, and
ordering procedures more organized and standardized. Bin or item
numbers are used in a beverage control system for the following reasons:
 To simplify and standardize beverage control procedures and forms
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 To facilitate purchasing, storing, requisitioning, and recording of

physical inventories
 To provide precise numerical product descriptions to be used in
inventory and purchasing control systems
The restaurant or bar par stock list is one of the most important
procedural controls in a beverage control system. A par (Figure 9-4) is a
pre-established limit of an outlet’s beverage stock.
A copy of each par stock listing should be located in the outlet itself;
there should also be one in the manager’s office and one in the beverage
storeroom. Each outlet is then issued only enough beverages to meet those
par numbers. The purchasing clerk should never issue any beverage
product in a quantity greater than the par value without special
authorization by the manager.

Figure 9-4 Example of Par Stock

This might be necessary if the par value is being modified because of an

increase in the outlet’s business activity. For the most part, however,
issuing over par will not be necessary, and this control provides a strong
basis for beverage cost reckoning. Establishing par levels for each outlet,
and sticking to them, can even eliminate the need for monthly inventory.
The person in charge of inventories should conduct regular spot checks to
be sure that par stock is maintained. If these levels are in place, you need
only multiply the par stock by the purchase price to determine inventory
value figures. This system also does the following:
 Assures adequate supply
 Minimizes the physical inventory kept in stock, which helps reduce
the opportunity for theft and maximize cash flow
 Reduces the number of trips to the storeroom and thus improves
the labor productivity of the bartender and purchasing clerk
 Facilitates requisitioning when empty bottles are counted for return
 Provides an immediate inventory accountability by all personnel
 Discourages a bartender from bringing in his or her own bottle and
selling its contents; the outlet-coded sticker or stamp system (see
below) will also help to prevent this form of pilferage
For a par stock listing to be worthwhile, the par stock should be
spot-checked on a random, unannounced basis in each outlet at least once
per month (in addition to the inventory process). These spot-audits,
however, are no substitute for direct, hands-on involvement by the
manager who has supervisory authority over the bartender. Outlet
managers should also understand the par stock system and see that it is
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enforced.
Color-Coded Outlet Stickers or Stamps
Color-coded outlet stickers or stamps should be placed on liquor
bottles when they are requisitioned from the beverage storeroom. These
stamps will identify all bottles as company issue, and will also indicate to
which outlet they were issued to provide a backup check of where the
bottles go. This can prevent theft and can also keep staff from trading
bottles between outlets without documenting the transfer.
To enact this procedure, the storeroom clerk should mark all the
liquor bottles for a given outlet with some type of color-coded outlet sticker
or stamp, as established by the purchasing manager. This sticker or stamp
should be placed on the back label of the bottle, rather than on the bottom;
this facilitates recognition during inventory-taking and spot-checking
procedures. The stamps should be impervious to removal. During any
random check, every liquor product in an outlet should match its par stock,
and all the full, partial, and empty bottles should have that outlet’s
identifying color sticker or stamp on them.
Waste, Breakage, Spoilage, and Spillage
Waste is a common occurrence in the food and beverage industry.
This does not mean it should simply be accepted as tolerable. Your job is to
minimize its occurrence and to control procedures when it does occur.
Consider the case of breakage. If a bottle is broken or spoiled in storage or
at a bar, the manager or bartender should return the broken bottle neck or
spoiled product to the person in charge of the inventory. This inventory
control person should complete and sign a requisition for the item and
return the requisition to the manager or bartender, who will then submit
the signed requisition with the daily order. This provides an authorized
paper trail of the variances that inevitably occur, so that patterns or
problem areas can be tracked. The requisition, together with the spoiled or
empty bottle or the broken bottle neck, is returned to the beverage
storeroom for replacement. The broken bottle neck is discarded.
The requisition should be clearly marked as breakage. From an
accounting perspective, the bar should bear the cost of breakage. If the
quantity in question is more than a single bottle (for example, a case falls
from a pallet or mechanical lift), the manager should be notified to verify
physically that this breakage has occurred.
When a bottle of wine has been sold to the guest and then is judged
to have spoiled, the sale of this spoiled product should remain documented
through the POS system. It may be channeled to a special spoilage account
set up by the manager or simply voided. For purposes of requisition, a
record of the void slip will serve as proof.
Spoilage involves either ingredient spoilage or a guest who
mentions dissatisfaction with the quality of a drink. Spillage, on the other
hand, is what happens when a server spills all or part of a drink. The server
may reorder the same drink and process a separate beverage charge
through the POS system. The check should then be settled or closed, with
all explanatory notes included and signed by the outlet manager as spillage
or dissatisfied guest. The bar should bear the cost of spillage; spoilage also
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should be charged to the outlet if the item could not be returned to the
vendor for credit. The manager should complete a breakage, spoilage, and
spillage report to justify why actual cost is different from potential cost.
(See module 5 for this form.)
Interbar Transfer
In an operation with more than one outlet, interbar transfers are
commonly carried out. These transfers need to be included in an outlet’s
cost. While the transfer of full bottles from one bar to another is
discouraged, on those occasions when it is necessary, train your staff to use
an interbar transfer form. It should be completed and signed by the
receiving bartender at the time of the transfer, and each bartender should
retain a copy. To make this explanation clear, let’s call the receiving bar Bar
A and the transferring bar Bar B.
Bar B now has one bottle short of its par stock, having sent a bottle
to Bar A; the copy of the interbar transfer form serves as reconciliation
when Bar B’s par is audited. The form is then used in lieu of the usual empty
bottle when Bar B submits its beverage requisition to the beverage
storeroom; the bartender should attach the form to the beverage
requisition.
Bar A now has one bottle over par, and the interbar transfer form
will serve to reconcile the item if the par is audited. This form also explains
why, in the case of liquor, there is a bottle with Bar B’s stamp in Bar A’s
stock. Bar A’s bartender should not submit the empty bottle to the beverage
storeroom as a requisition, thereby increasing the par. If the bartender in
this outlet were to forget and try to requisition a replacement bottle, the
storeroom clerk should notice that the sticker or stamp is from another
outlet and should not fill the requisition without authorization from the
manager.
Cash Bar Control
In a cash bar, a guest pays for each drink as it is ordered. This type
of service is often used in the case of banquet events like weddings or large
parties. Cash bars are often carried out in a remote location, such as a
banquet room or an outdoor deck. However, it should operate with the
same type of controls as the main bar. Because such remote locations often
preclude the use of automated dispensing systems and POS access is
unlikely, pouring methods should be established to monitor and account
for all revenues collected. One way to account for sales and inventory, and
to ensure that there is no missing revenue, is to use a cash bar worksheet
as in Figure 9-5.

Figure 9-5 Cash Bar Control Sheet

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If you multiply the results in Column D of Figure 9-5 (2, 0, and 3) by

the selling price for each of those drinks, you should get the amount of the
cash that the event hosts paid for the function. If there are differences, the
manager should investigate them. One person should be in charge of
monitoring the cash bar operation for effectiveness and control, and he or
she should use this form to monitor what is used and sold, and at what
prices. Module 7, you will find a detailed discussion of how this process
works, both for regular POS systems and for special banquet events.
The procedures and policies you develop for cash bar control will
help to prevent loss of cash due to theft. In addition, the following controls
should be incorporated into cash bar systems:
 Ticket or guest check control systems. Some operations have a
cashier sell tickets that can be given to the bartender in exchange
for a drink. This frees the bartender from handling cash, facilitates
better service, and allows tighter controls. The number of drinks
consumed should match the drink tickets sold and collected. When
there are void transactions where the drink tickets are sold, have
the manager authorize them and make the reason for the void clear
for reporting purposes.
 Recording sales. It may be cost-effective to use a cash register for
cash bar events. This saves hours of manual paperwork time, frees
employees from memorizing item prices, and facilitates service
procedures. The drink prices can easily be preprogrammed into the
register.
 House bank. The bank is an amount of money with which the
employee begins the shift. The size of the bank should depend on
the expected amount of business. Servers may carry individual
banks, or the bartender may collect all cash received. Choose a
method that meets the needs of your operation.
In a hosted bar, the host pays for all items consumed. The price,
agreed upon ahead of time, is applied to the amount of services or food and
beverage consumed. When the price is per bottle, a special par stock is set
up just for that function, and the amount of food or beverage consumed is
computed by subtracting the ending inventory from the beginning
inventory (par inventory plus any additions during the event). Generally,
there is no cash for staff to steal in a hosted event, because payment for
services and goods is not made directly to them; however, adequate record
controls must still be established for billing and accounting.

Banquet Beverage Storeroom Procedures

Banquet beverage use brings up special issues that cannot be

reconciled through standard procedures. A banquet beverage storeroom is
commonly established for banquet service in large operations, because this
type of service is markedly different from any outlet service we have
discussed. The banquet manager should restock from the purchasing
beverage storeroom as needed by using a requisition form. This form may
be preprinted with all the beverage products you carry. The bartender
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would then only need to enter the quantity needed.

For each individual banquet, a special banquet beverage requisition
is completed. Products should be issued from a separate banquet beverage
storeroom to the individual service bars. After the function, all unused
liquor should be returned to that storeroom. If you have enough banquet
business to have standard issues to banquet rooms, these can be entered
on a requisition form, and they should be charged by function. A standard
issue is a repeated restocking of products to par levels, just as in a regular
outlet. Every item issued, minus the ending inventory, should be charged
to that function. In most cases your company will establish a contract with
the banquet client prior to the event. The charges can then be reconciled to
that contracted price. (standard issue A repeated restocking of banquet
beverage products to par levels, just as in a regular outlet. Every item
issued, minus the ending inventory, should be charged to the function)

Beverage Cost Variance

When you compare your actual cost to your potential cost, the
difference between them is called the variance. This amount will probably
vary from month to month, due to the ever-changing nature of the business.
Assuming that control procedures are followed and there are no significant
changes in the sales mix, the beverage variance percentage should not be
more than 1 percent off from the calculated potential cost.
Calculating potential cost for your beverage business is essentially
the same as doing so for food. Begin by determining the number of drinks
per bottle and multiplying this by the selling price per drink. This is the
potential sales per bottle. For example, a 1-liter bottle will yield
approximately 27 drinks at 1.25 fluid ounces each. If the drinks are sold at
$3.75 each, the potential sales reach $101.25 for one bottle. If your cost for
that bottle was $22, you need only divide that cost by the potential sales to
reach the potential percentage. In this case it is 21.7 percent.
But perhaps you do not sell all drinks made with a particular liquor
at the same price or with the same amount of alcohol. In this case, you will
need to determine weighted averages for both drink size and selling price.
Let’s take a $14 bottle of gin as an example, as shown in Figure 9-6.
The number of ounces used (415.5) divided by the number of drinks
sold (315) gives you your average drink size, 1.32 ounces. This number,
divided into your bottle size (1 liter or 33.8 ounces), equals the average
number of drinks per bottle, 25.6.
Next, find your average selling price by dividing total sales by total
number of drinks sold. Your average selling price is $3.18. Multiply this
average price by the average number of drinks per bottle. In our example,
this is $3.18×25.6 for a total of $81.41. This is your potential sales value
per bottle. The potential beverage cost is equal to the cost divided by the
potential sales, or $14÷$81.41. We get a potential beverage cost
percentage of 17.2.
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Figure 9-6 Weighted Averages

Now you need to determine your actual sales revenue. Simply

multiply the numbers of each drink sold by the drink’s selling price, and
total the result. In our example, the total revenue was $1,002.25. Your POS
reports should show you the actual number of drinks sold at each selling
price and the sales mix of each category.
The next step is to determine the actual beverage cost percentage.
The formula for calculating the beverage cost for a specified period is as
follows:
Beginning Inventory+Purchases−Ending Inventory=Cost of Product
Consumed
In food and beverage operations, which commonly transfer food
products such as juices and garnish fruit to the bar, adjustments to the
gross cost need to be made. Similar adjustments must be made for any
products transferred from the bar to the kitchen, such as wine for cooking.
In these cases, the gross beverage cost would be adjusted as follows:
Cost of Product Consumed+Transfers to Bar−Transfers from Bar=Net
Cost of Product Consumed
Using our example, assume the net beverage cost was $180 and the
total beverage sales was $1,002.25; the actual beverage cost percentage
would be $180 divided by $1,002.25= 18.0 percent. Now we can compare
the potential cost—at 17.2 percent—with the actual18 percent we
calculated.
Compare these two numbers to check for significant variations.
When you have added up many items across food and beverage categories,
however, it can be hard to see where problems lie. This is made worse if
your company has multiple outlets, as we illustrate in the example below.
In addition, companies that do not have a perpetual inventory system
tabulated by outlet or that have not computed their cost by outlet may find
it difficult to identify exact causes of variances because outlets are different
and may have varying stock and pricing. So, what do you do? The example
in Figure 9-7 shows how to allocate the unexplainable cost variance, so that
(for accounting purposes) you can charge a proportionally correct amount
to each outlet’s costs.
In the example shown in the figure, the calculated potential costs sit
at 21.63 percent, while the actual percentage was 22.77. The cost overages
on Line 9 are allocated to the outlets proportionally based on their actual
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revenue. Dividing the actual cost by the potential cost derives the factor of
1.05. The factor could be used also to derive the actual allocated cost on
Line 9 by multiplying it by the potential cost. As you can see, there are a lot
of small issues—such as losses, waste, and failure to inventory properly—
that turn out to be significant when these costs are totaled and compared
each month. These are the sorts of issues that can explain a variance. The
following list includes many possible reasons to investigate if you are
seeing unwarranted variances in your costs.

Figure 9-7 Actual versus Potential Cost

Incorrect Charges
 A food requisition has been charged to beverage cost, or vice versa.
Beverage revenue has been processed as food revenue, or vice
versa.
 Sales tax has been mistakenly included in calculating potential
beverage cost.
Incorrect Physical Inventory Valuations
 Items have been incorrectly counted or double-counted. (The
person who counts the items during inventory-taking can simply
turn the label on the bottle to the back when it has been counted, as
a reminder not to count the item twice.)
 Inventory extension is incorrect. This occurs most commonly when
the database is corrupted. An example might be that an increased
purchase price has not been updated in the inventory item files, or
a bottle of one size is recorded under a different size.
 An entry or entries are incorrect. For example, one bottle of vodka
is entered as one case.
Sales Mix Changes
 More premium label products are sold. Premium labels are usually
higher in pour cost than well brands. Refer to the sliding scale
pricing strategy, discussed in module 2.
 Bottle beer sales are higher than those of draft beer. Bottle beers are
usually higher in cost than draft beer.
 Imported beer sales increase over those of domestic brands.
Domestic brands are usually cheaper than imported brands.
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 Wine sales increase. Wine cost percentages are usually higher than
those of all other categories of beverage products.
Incorrect Drink Pricing
 Pricing is inadequate to cover costs.
 Item entry into the POS system is incorrect due to staff error.
Incorrect Par Stocks
 Par stocks are not being maintained. If you are using par stock
figures to extend your inventory, make sure they are correct.
 Missing, spilled, spoiled, or broken merchandise is not accounted for
properly.
 Bottles are not marked or coded by outlet.
Overpour, Spillage, and Underpour
 Bartenders may overpour or spill products when preparing drinks.
They may not be using pour-top control devices.
 Electronic liquor dispensers are not checked every 30 days and
recalibrated as necessary.
 Draft beer dispensers are not properly calibrated to reduce foam.
 Service staff may overpour wine by the glass.
Inadequate Cash Control Procedures
 A transaction was not pre-checked on the POS system before
preparing the drink.
 The sale amount recorded on the register did not correspond to the
number and type of drinks served.
 The guest check was not placed in front of the guest or customer
immediately after serving, in order to have evidence of the
transaction openly available at all times.
 The No Sale key was used during a sale. Major differences among
bartenders’ sales on the same shift might be an indication of this
problem.
 Guest check controls are not enforced.
 Bartenders may be making change from their tip jars.
 Overages or shortages are not investigated. This problem is
common when bartenders undercharge guests in order to earn
large tips or to please friends. When guests ask for a favorite
employee, it could be because that employee favors them with
unauthorized discounts.
 The employee may be charging for a drink not served, and the guest
unknowingly pays for it. A dishonest bartender could resell that
drink and pocket the cash.
Purchasing
 Beverages are not purchased competitively.
Your job is to investigate these areas of possible loss and, when
necessary, implement appropriate controls. People are very creative; you
may even discover new problems not mentioned in this section.
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Service Procedures

You have seen the unique challenges facing the manager in the
operation of an outlet and in the sale of beverages. The purpose of the
following sections is to set up standard operating procedures (SOPs) to aid
you and your employees in training and coaching. No training or staff
system is perfect; you may need to refine what is mentioned here to fit your
company’s needs. Without the consistent and accurate cooperation of your
staff, however, all of your controls may be worthless. Be sure to include
comprehensive training and ongoing coaching for your staff as an
operational goal and necessity. Below we provide information that you can
use in training your service staff; it is written in a style that speaks directly
to servers and bartenders. Be sure to emphasize that these are the
procedures and behaviors that you expect your staff to perform. Cody Plott,
president of Pebble Beach Company, phrases it like this: Service should
“exceed the expectation of every guest, by providing a once-in-a-lifetime
experience . . . every time.”
When Guests Arrive
 Greet guests with a welcome as they come into the room. If you’re
busy, acknowledge them with a word or a smile and establish eye
contact. If guests know that they have been recognized, they will not
mind a short delay in service. No matter where you are in the room,
always keep your eye on the other tables.
 Always face the tables while standing at the bar.
Serving Our Guests
 Always be positive. “May I get you another cocktail?” or “Would you
care for another round?” is preferable to “Is that all?”
 Place cocktail napkins in front of the guests with any logo, emblem,
or written material facing them.
 If you know the guests, call them by name. If they are regular
patrons, remember their favorite brand or cocktail and how they
like it.
 Suggest one or two featured beverages to the customer when
ordering. Use up-selling techniques to encourage customers to
purchase more premium products.
 Serve cocktails as soon as possible
Pouring Drinks
 Place the pour spout in the bottle in such a way that the label is
turned toward guests seated at the bar. This allows guests to see
what is being poured.
 Never overfill a glass so that it spills on the bar or on the guests
when they attempt to drink the cocktail. Never pick up a glass—
clean or dirty—by the rim. Always hold stemmed glasses by the
stem.
 Strictly adhere to the company pour policy in accordance with
recipes. Use pour control devices on all liquor bottles, except odd-
sized liqueurs or cordials.
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Presenting a Check to a Bar Guest

 Always process the order through the POS system, if available.
 Always place the guest check in front of the bar guest at the same
time the cocktail is served. This is very important!
Service Standards We Expect
 Ensure that the table is maintained well at all times. For example,
remove soiled napkins and replace used ashtrays. Used ashtrays
should always be replaced with a clean one.
 Be alert for minors. If there is the slightest doubt, ask for
identification; if the person can’t produce an ID, or if you have
reason to distrust the ID he or she provides, you will have to refuse
service courteously.
 Never argue with a guest. Call the manager to settle disputes.
 It is every staff member’s responsibility to refuse service to an
intoxicated person. If there is a problem, call the manager.
 Be alert to the guest’s need for another cocktail.
 Talk, but be a good listener. Don’t join conversations, and never give
the impression of listening in on a conversation. Be attentive
without being overly familiar.
 If you make an error with a cocktail, rectify it at once. Make the
correction without question, and clearly dispose of the mistaken
drink. Notify the manager and give a copy of the spillage report to
the accountant.
Collecting Payment
 Do not attempt to collect payment until guests indicate that they are
ready to pay or to sign the check. If the guest pays by credit card,
note his or her last name and expiration date on the guest ticket. If
it is a hotel room charge, have the guest print and sign his or her
name and room number; then match the information on the
registered guest list to the name and room number on the check.
 Finalize the closed check in the POS system. Immediately return
change or a credit card receipt to the guest along with the check stub
receipt.
When Guests Depart
 Express your appreciation and invite guests to return.
 Tables should always be wiped down with a damp cloth. Wipe
crumbs from chairs, replace ashtrays, and replenish matches. Tidy
the floor if necessary.
Our Restaurant Standards
 Always be courteous and helpful to fellow employees. This will be
noticed and appreciated by guests.
 Pay particular attention to personal appearance and grooming, and
wear a clean uniform.
 When leaving the floor for any reason, tell the room manager or the
bartender first.
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Specific Procedures: Beer Service

For both bottle and draft beer, always serve beverages cold, at
approximately 40° Fahrenheit. Certain specialty beers may have other
temperature requirements, which your vendor should be able to provide.
Use cold glasses when serving beer; a room-temperature glass makes a
beer mediocre. Fill the glasses with ice cubes, or put them in the
refrigerator—whatever is necessary to serve cold beer in a prechilled glass.
Beer temperature rises 2° Fahrenheit in an unchilled, rinsed, thin-shell
glass, and it rises 4° to 5° in a rinsed, heavy-shell glass or mug.
Draw or pour beer properly. The size of the head you put on each
glass can be controlled by the angle at which you hold the glass at the
beginning of the draw. If the glass is held straight and the beer drops into
the bottom of the glass, a deep head of foam will result. If the glass is tilted
sharply (about 90°) and the beer flows down the side of the glass, the head
of foam will be minimized. How much you tilt the glass and when you
straighten it to allow the head to form can be determined by a few trial
draws. You can also control foam by opening the lever fully. Partial pull of
the lever can create too much air.
Keep your beer glasses clean. This is very important, as beer will
lose its delicate taste and zest when it is poured into a glass with the
slightest film of soap, grease, lipstick, cream, or other substance. A beer
glass should be washed each time it is used unless the guest requests that
the glass be refilled. Proper cleaning and drying can be accomplished in
these simple steps:
1. Empty and rinse used glasses with clear water prior to washing.
2. Wash each glass with a brush in water containing a solution of odor-
free and nonfat cleaning compound that will clean the surface of the
glass thoroughly and rinse off easily in clean water.
3. After washing the glass, rinse it in clean, cool water. The final rinse
should be sanitized. Do not dry glasses with a towel. Stack them on
a rack or on a corrugated surface where they can drain freely and
air can circulate in them.
4. One of the secrets to serving a perfect glass of beer is to rinse the
glass in cold, clean water before filling.
Ring the order through the POS system. Serve beer by placing the
glass (serving from the right) in front of the guest. In the case of bottled
beer, pour the glass one-third full and place the bottle (with the label facing
the guest) next to the glass. Then, thank the guest. Most people will react
more positively when they feel appreciated.

Specific Procedures: Wine Service

Prepare the supplies you will need for wine service: a wine bucket
for whites and sparkling wines, a wine opener, a service cloth, and the
correct number of the right kind of wine glasses for what you are serving.
Set the glasses on the upper right side of the table setting, above the knife.
Then, present the bottle so that the host can read the label. (The host, male
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or female, is the person who orders the wine.) Wait until the host confirms
that this is the bottle of wine that he or she ordered.
Remove the foil cap by placing the bottle near the edge of the table
and cutting the cap cleanly without twisting the bottle. Move your hand
around the bottle; the label should face the host. Use the knife part of the
corkscrew to cut the foil 0.5 inch from the top of the bottle. Remove the foil
cap and wipe the bottle neck with the service cloth before uncorking.
To uncork the wine, insert the tip of corkscrew into the middle of
the cork while keeping the bottle on the table. The corkscrew should enter
straight and should not break the cork. Turn the corkscrew until the tip of
the screw almost reaches the bottom of the cork. Then, remove the cork by
placing the lever on the neck of the bottle. Push the lever down, grasp the
lever and cork together, and lift the cork out gently. Unscrew the cork and
place it next to the host. Wipe the mouth of the bottle with a cloth again.
When opening champagne, do not pop the cork. Maintain pressure
on the champagne cork as it pushes against your hand. Do not hold the
champagne bottle by the neck. Your hand will cause the air in the neck to
warm up and expand. This may cause an unexpected forceful release of the
cork from the bottle. An ideal way is to wrap a towel around the cork and
then grasp and wiggle the knob of the cork with a twisting motion. Let the
pressure inside the bottle and the twisting of the knob force the cork out.
Serving the host from the right side, pour a minimum of 1 ounce of
wine into a glass by holding the bottle in your right hand with the label
facing up while pouring. Do not lift the wine glass when pouring, and do not
allow the bottle to touch the wine glass. Wait for the host’s approval, and
then proceed to pour the wine for the other guests. Follow these
instructions while pouring the wine:
 Serve ladies first, moving counterclockwise and ending with the
host.
 Never overfill a wine glass. White wine glasses should be a
maximum of two-thirds full, while red wine glasses should be a
maximum of one-half full (5 ounces in either case).
 Old red wines should be treated with care and poured gently. Do not
angle them abruptly.
 To avoid drops from running down the bottle neck, twist the bottle
a half turn before lifting it away from the glass.
Lastly, in the case of chilled wine, place the bottle in the wine bucket
(which should be 6 inches from the edge of the table) near the host. A red
wine should simply sit on the table without a bucket. Be sure to enter the
order into the POS system and verify the proper sales price (report any
discrepancy to the accountant or manager on shift). Retain the wine tag,
which is usually the company control number for identifying the type of
wine sold and POS receipt. At the end of the day, you will do the following:
 Take all wine tags and complete a wine requisition sheet. Submit
this wine requisition sheet, along with the wine tags, to the
purchasing department.
 The storeroom should not issue a replacement bottle of wine if a
wine tag, wine bin number, and POS receipt are not presented.
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Specific Procedures: Guest Requests for Unusual Recipes

When a guest orders a drink the bartender is not familiar with, the
bartender should be honest with the guest. However, if the guest can
provide the recipe, method of preparation, glass to be used, garnish, and so
on, the bartender should be pleased to prepare the drink. The bartender
should relate the ingredients and portions to a similar drink and charge the
guest accordingly. In the event that there is an unstocked liquor or
ingredient involved, advise the guest accordingly. Do not make a
substitution without the guest’s knowledge or suggestion; just politely
suggest another drink.
Do not be ashamed to admit not knowing an unusual drink; simply
follow the above procedure. For example, in some areas of the country,
water is requested with the word ditch or branch. Ask the guest
courteously what he or she means if you do not understand, and later,
inform the manager and the accountant so the other staff can be alerted to
language that they, too, might hear.

Service Procedures: Suggestive Selling Techniques

Suggestive selling is the creative and enthusiastic merchandising of

your products to generate sales and to enhance guest service. To be an
effective salesperson, a service staff member must be knowledgeable and
must put to use all the selling aids and tools available. These selling aids
and tools include the following:
 Food and beverage menus
 Cocktail and wine lists
 Your own knowledge
 Your enthusiasm
 Proper language and manners
 Food and beverage product boards
 Table tents or posters
 Your sincerity
 Your confidence in your products
The key to these selling techniques is suggestion. Servers need to be
trained to “read” the customers so that they can suggest something
appropriate. They should not say, “Can I get you something to drink?”
Servers should guide guests to order something specific.
Techniques to Use
 Be positive. Phrase sentences so it sounds as though the guest is
already sold on the idea and they need only tell you the particular
item. Here is an example:
Server: “Good evening. May I take your order?”
Guest: “I’ll have a Budweiser.”
Server: “The shrimp cocktail is excellent. May I order one for you?”
 You can also offer two choices, making it more difficult for a guest
to say no. Don’t ask if guests want something, but ask which one
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they’ll have: “Deep-fried zucchini or onion rings would go great with

your Budweiser.”
 Understand the ingredients and preparation methods used to help
in sales: “Try our deep-fried zucchini.”
 Be honest.
 Servers can be salespeople, but they do not have to be pushy to be
effective.
 Know the chef’s specials before beginning the shift

References and Supplementary Materials

Book and Journals

Practical Food and Beverage Cost Control Second Edition
Author: clement Ojugo