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LAS VEGAS NIGHTCLUB & BAR SHOW MARCH 2010 Presented By: JACK ROBERTIELLO PowerPoint PPT Presentation


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Successful Beverage Management — Proven Strategies for the On-Premise Operator Part Two: Increasing Sales In A Down Economy. LAS VEGAS NIGHTCLUB & BAR SHOW MARCH 2010 Presented By: JACK ROBERTIELLO Beverage Writer/Former Editor of Cheers Magazine, Drinks Ink ROBERT PLOTKIN

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Las vegas nightclub bar show march 2010 presented by jack robertiello

Successful Beverage Management —Proven Strategies for the On-Premise OperatorPart Two:Increasing Sales In A Down Economy

LAS VEGAS NIGHTCLUB & BAR SHOW

MARCH 2010

Presented By:

JACK ROBERTIELLO

Beverage Writer/Former Editor of Cheers Magazine, Drinks Ink

ROBERT PLOTKIN

Author/Beverage Management Consultant, BarMedia


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Sales Trending Up — Americans Are Drinking Less But Better

Despite the Recession, on-premise sales of premium spirits continue to increase

Prevailing attitude in U.S. — life’s too short to drink cheap booze

As evidence, on-premise sales of inexpensive value brands are flat or dropping

Consumers now have higher expectations about the quality of their drinks


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Sales Trending Up — Americans Are Drinking Less But Better

A recent consumer research study:

Conducted August 2009 by NextLevel Marketing and Nightclub & Bar

Involved 1250 on-premise consumers — LDA, split 50% male / 50% female

Over 80% strongly agreed that cocktails made with premium spirits taste better than those prepared with house brands

Consumers said they expect to pay an additional $2.80 for a branded cocktail


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Sales Trending Up — Americans Are Drinking Less But Better

Call Brands Deliver Bigger Profits

Margarita made with WELL Tequila

$ .68 drink cost ÷ $4.50 sales price = 15.1% cost percentage

$4.50 sales price - $.68 drink cost = $3.82 gross profit


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Sales Trending Up — Americans Are Drinking Less But Better

Call Brands Deliver Bigger Profits

Margarita made with PREMIUM Tequila

$ 1.05 drink cost ÷ $6.00 sales price = 17.5% cost percentage

$6.00 sales price - $1.05 drink cost = $4.95 gross profit


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Sales Trending Up — Americans Are Drinking Less But Better

Call Brands Deliver Bigger Profits

Margarita made with SUPER-PREMIUM Tequila

$ 1.72 drink cost ÷ $7.50 sales price = 22.9% cost percentage

$7.50 sales price - $1.72 drink cost = $5.78 gross profit


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Sales Trending Up — Americans Are Drinking Less But Better

Margarita made with Well tequila

$ .68 drink cost ÷ $4.50 sales price = 15.1% cost percentage

$4.50 sales price - $ .68 drink cost = $3.82 gross profit

Margarita made with Premium Tequila

$1.05 drink cost ÷ $6.00 sales price = 17.5% cost percentage

$6.00 sales price - $1.05 drink cost = $4.95 gross profit

Margarita made with Super-Premium Tequila

$1.72 drink cost ÷ $7.50 sales price = 22.9% cost percentage

$7.50 sales price - $1.72 drink cost = $5.78 gross profit


Las vegas nightclub bar show march 2010 presented by jack robertiello

Well Liquors — The Most Important Bottles in the House

Well liquor is used in more drinks than any other type of spirits and typically has the highest sales volume

As a result, featured brands will significantly impact profitability

Bar’s price structure based on the well (e.g. well price plus $1 = call price, etc.)

Selection criteria — featured brands need to conform to concept and clientele


Las vegas nightclub bar show march 2010 presented by jack robertiello

Pouring Brands in the Well

Often featured at operations with a predominantly price-conscious clientele

Advantages — low cost per ounce and relatively low carrying cost

Disadvantages — low quality, no brand recognition, heightened liability

Well Liquors — The Most Important Bottles in the House


Las vegas nightclub bar show march 2010 presented by jack robertiello

Example of a Pouring Brands Well

Well Liquors — The Most Important Bottles in the House


Las vegas nightclub bar show march 2010 presented by jack robertiello

Profit Potential — Pouring Brands

Well Liquors — The Most Important Bottles in the House


Las vegas nightclub bar show march 2010 presented by jack robertiello

Premium Brands in the Well

Well Liquors — The Most Important Bottles in the House

Best suited for a value-conscious clientele or brand-conscious clientele

Advantages — moderate cost per oz, high quality, enhanced brand recognition

Disadvantages — elevated cost per ounce, slightly higher carrying costs


Las vegas nightclub bar show march 2010 presented by jack robertiello

Well Liquors — The Most Important Bottles in the House

Example of a Premium Brands Well


Las vegas nightclub bar show march 2010 presented by jack robertiello

Profit Potential Premium Brands Well

Well Liquors — The Most Important Bottles in the House


Las vegas nightclub bar show march 2010 presented by jack robertiello

Profit Comparison

Well Liquors — The Most Important Bottles in the House


Las vegas nightclub bar show march 2010 presented by jack robertiello

Profit Comparison

Well Liquors — The Most Important Bottles in the House


Las vegas nightclub bar show march 2010 presented by jack robertiello

Backbar Management — Setting the Stage For Success

Beverage sales in casual and tablecloth restaurants average nationally around 25% of gross revenue and account for over 50% of average net profits

The backbar is an operation’s principal and most effective marketing device

It’s essential to assess whether the backbar is stocked with the right product mix


Las vegas nightclub bar show march 2010 presented by jack robertiello

Look to reduce inventory levels — frees working capital & lessens exposure to loss

Reassess status of underperforming products — those that take 4+ months to deplete

Drop dead stock — products that take longer than 9 months to deplete

Drop duplicate flavors or repetitive styles

Concentric merchandising — bestselling products positioned in center of backbar

Backbar Management — Adopting a Marketing Position


Las vegas nightclub bar show march 2010 presented by jack robertiello

Vertically extend each category of spirits with at least one above-premium brand

Adopt a marketing position — horizontally expand a select category of spirits

Staff education crucial to success of the strategy, facilitates server credibility

Focus a portion of the bar’s marketing to that spirit:

Create a line of specialty cocktails featuring the adopted spirit

Devote space in the bar menu to list the name brand spirits stocked

Promote tasting flights to showcase nuances between various brands

Backbar Management — Adopting a Marketing Position


Las vegas nightclub bar show march 2010 presented by jack robertiello

Suggestive selling helps clientele make informed decisions

A look at consumer perceptions about suggestive selling:

Nearly 70% of the consumers said they walk into a restaurant without knowing beforehand what they were going to drink

About two-thirds said they listen to server suggestions and trade-up to a premium brand

Only 3% responded of the consumers said they stick with their original order

Suggestive Selling — A Small Skill Set that Yields Big Results


Las vegas nightclub bar show march 2010 presented by jack robertiello

Three sales tactics — suggesting one, two or no name brands spirits

Bar staff should deliver suggestions as if relaying insider information

Guest hesitation before ordering is opportunity to present bar menu

Of those consumers who typically stop after one drink, almost 25% said they would order another drink if only the server asked or didn’t take the cocktail menu away

Suggestive Selling — A Small Skill Set that Yields Big Results


Las vegas nightclub bar show march 2010 presented by jack robertiello

Every bar regardless of size should promote using a bar menu

While guests will typically spend 2 minutes perusing a food menu — people on average spend 20 seconds looking through a bar menu

That makes it essential your bar menu is well-conceived, easy to read in dim lighting and loaded with sensational cocktails

On average, consumers want to see 14 beers, 14 wines and 16 cocktails promoted on a bar menu

Bar Menus — Proven Sales Drivers


Las vegas nightclub bar show march 2010 presented by jack robertiello

Conduct Your Own Market Research

Bar Menus — Proven Sales Drivers

Test the appeal of specialty drinks before dubbing them your house signatures

Create three separate menus each with different specialty drinks

Rotate the menus every two months and track the sales results

The bestselling drinks should then be combined in one menu


Las vegas nightclub bar show march 2010 presented by jack robertiello

Consumers Prefer Stand-Alone Drink Menus

Bar Menu Effectiveness — Consumer Research

Nearly 90% of consumers read the drink menus at full-service bars and restaurants

The majority of consumers surveyed said the bar menu is the most significant choice influencer

58% of the consumers want the bar menu on the table at all times

17% responded that the prefer table top cards to menus

Only 11% said they prefer specialty drinks listed in the main food menu


Las vegas nightclub bar show march 2010 presented by jack robertiello

Most Consumers Want Drink Prices and Drink Descriptions on Menus

Bar Menu Effectiveness — Consumer Research

81% of the consumers want drink prices listed on the menu

68% said they wanted to be able to read descriptions of the drinks

41% responded that they prefer seeing pictures of the drinks

35% of the consumers want brand names listed in descriptions


Las vegas nightclub bar show march 2010 presented by jack robertiello

Menu Test #1 — Functional Descriptions Only

Bar Menu Effectiveness — Consumer Research

Functional descriptions only include mention of the ingredients in a drink

Consumers presented a Margarita menu with only functional descriptions

47% of consumers would order house, 31% top-shelf, 22% the ultra-premium


Las vegas nightclub bar show march 2010 presented by jack robertiello

Bar Menu Effectiveness — Consumer Research

Margarita Menu

House Margarita

Cuervo Gold Tequila, triple sec and sweet and sour mix.

Top Shelf Margarita

Sauza Hornitos Tequila, Cointreau and margarita mix.

Ultra-Premium, Margarita

Patron Silver Tequila, Cointreau, and margarita mix.

Source: NextLevel Marketing 2009


Las vegas nightclub bar show march 2010 presented by jack robertiello

Menu Test #2 — With Added Romance Copy

Adding romance drink copy to menus drives significant drink trade-up

Consumer interest in ordering the house Margarita dropped from 47% to 33%

Those interested in trading-up to a branded Margarita rose from 53% to 67%

Bar Menu Effectiveness — Consumer Research


Las vegas nightclub bar show march 2010 presented by jack robertiello

Bar Menu Effectiveness — Consumer Research

Margarita Menu

House Margarita

Cuervo Gold Tequila, triple sec and sweet and sour mix.

Top Shelf Margarita

Sauza Hornitos Reposado Tequila, Cointreau Orange Liqueur and premium margarita mix served frozen or on the rocks.

Ultra-Premium, Margarita

Our distinctive, hand-shaken ultimate Margarita made with Patron Silver 100 Agave Tequila, Cointreau, and fresh squeezed lime juice served straight up or on the rocks.

Source: NextLevel Marketing 2009


Las vegas nightclub bar show march 2010 presented by jack robertiello

Menu Test #3 — With Added Romance Copy and Drink Prices

When romance copy and drink prices were included on the menu…

… 67% still wanted to order a branded Margarita

… However, after seeing the price of the ultra-premium Margarita 5% of the consumers changed their minds and opted for the premium Margarita

Bar Menu Effectiveness — Consumer Research


Las vegas nightclub bar show march 2010 presented by jack robertiello

Margarita Menu

House Margarita $6.00

Cuervo Gold Tequila, triple sec and sweet and sour mix.

Top Shelf Margarita $7.00

Sauza Hornitos Reposado Tequila, Cointreau Orange Liqueur and premium margarita mix served frozen or on the rocks.

Ultra-Premium, Margarita $8.00

Our distinctive, hand-shaken ultimate Margarita made with Patron Silver 100 Agave Tequila, Cointreau, and fresh squeezed lime juice served straight up or on the rocks.

Bar Menu Effectiveness — Consumer Research

Source: NextLevel Marketing 2009


Las vegas nightclub bar show march 2010 presented by jack robertiello

Summary of Menu Testing

Bar Menu Effectiveness — Consumer Research

People want to know details about the drinks they’re ordering, just as they want to know about items on a food menu

Consumers also want to know in advance how the drinks will look, what the ingredients are and how much they will cost


Las vegas nightclub bar show march 2010 presented by jack robertiello

Profit Through Enhanced Mixology

Increasing Revenue Through Mixology — Exceeding Guest Expectations

Don’t offer your clientele the same uninspired drinks as the competitors

Enhanced mixology adds panache and perceived value without adding cost


Las vegas nightclub bar show march 2010 presented by jack robertiello

Achieving Sessionability in Your Drinks:

Sessionability is the most elusive of all qualities in a drink to achieve

Term used to describe a cocktail that people can enjoy throughout an evening

Cocktails must taste sufficiently interesting to make guests want another

Drinks lacking character are a bore and guaranteed to send people packing

Excessively flavorful cocktails quickly overwhelm the palate

Alcohol strength a factor — sessionability decreases as potency increases

Increasing Revenue Through Mixology — Exceeding Guest Expectations


Las vegas nightclub bar show march 2010 presented by jack robertiello

Technique Matters — Handshaking

Vigorously handshaking cocktails is an underappreciated mixing technique

Shaking a cocktail communicates freshness and quality to your guests

Handshaking accomplishes a number of objectives:

It thoroughly mixes ingredients into a homogenous cocktail

Handshaking chills ingredients to serving temperature, around 37-38˚F

Vigorous shaking also aerates the cocktail and produces froth on top

Technique adds water; softens the cocktail and melds spirits and modifiers

Increasing Revenue Through Mixology — Exceeding Guest Expectations


Las vegas nightclub bar show march 2010 presented by jack robertiello

Technique Matters — Muddling

Enhanced production sells the sizzle, adds to the guest experience

Muddling is a high production value technique

It does for a cocktail what high-def does for television

Muddling injects cocktails with fresh, vibrant flavors

Drinks muddled in service glass — Mojitos, Caipirinhas, Old Fashioneds

Increasing Revenue Through Mixology — Exceeding Guest Expectations


Las vegas nightclub bar show march 2010 presented by jack robertiello

Successful Beverage Management —Proven Strategies for the On-Premise OperatorPart Two:Increasing Sales In A Down Economy

JACK ROBERTIELLO

Beverage writer/former editor of CheersMagazine

Drinks Ink

Brooklyn NY

917.439.8467

[email protected]

drinksink.blogspot.com/

ROBERT PLOTKIN

Author/beverage management consultant

BarMedia

Tucson AZ

520.747.8131

[email protected]

barmedia.com/barprofits.com


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