Chapter 18 Purchasing, Receiving, Storing, and Issuing After reading this chapter, you will be able to: Describe a wine list in terms of its depth and breadth. Identify factors to consider when choosing wines, beers, and spirits. Explain proper storage techniques for wines, beers, and spirits. Identify factors affecting choice of purveyors. Describe purchase orders and outline their use. Identify control concerns during the issuing process. Work is the curse of the drinking class. Oscar Wilde 249
250 Chapter 18 The proper selection, purchasing, storing, and issuing of wines, beers, and spirits are the cornerstones of any successful beverage operation. While these tasks can seem daunting, it is important to adhere to certain control procedures in order to maximize profits. Establishing and following sound purchasing, receiving, storing, and issuing procedures will help the beverage manager increase profits and ensure quality of product. Because beverage profit margins are generally more favorable than food profit margins, losing alcoholic beverages to employee theft, product spoilage, and breakage can have a significant impact on the bottom line. To eliminate these potential problems, it is essential that the operator have a system of procedures in place for controlling the entire beverage production process. Purchasing Alcoholic beverage sales account for more than 22 percent of profits in most foodservice establishments. Not all alcoholic beverages are appropriate for all establishments, however. For example, certain imported Belgian beers might not sell as well at the local sports bar as they would at a restaurant bar. Management first needs to determine what kind of alcoholic beverages the establishment should sell. This decision will depend upon the type of operation being managed as well as the market the manager is trying to attract. What to Buy: Wine Any establishment should consider the recent explosion in the popularity of wines when considering which and how many different types of products to offer for sale. Upscale, full-service establishments will want to offer a larger and more varied wine menu than smaller establishments. This is primarily because the larger establishment will be more able and willing to purchase and store more expensive wines. When purchasing wines, a manager should consider the breadth and depth of the beverage menu. The number of different wines offered on an establishment s beverage menu is referred to as breadth. The number of wines offered in a certain category (e.g., Chardonnay or Cabernet Sauvignon) is referred to as depth. The actual number of wines offered and the quantity in which wine is ordered are decisions that are left to the individual establishment and the managers. Each establishment will have its own beverage menu just like each establishment will have its own food menu. Wines can be purchased by the bottle or by the case, depending on how quickly the product will rotate out of the storeroom. Generally speaking, each bottle costs less when purchased by the case, but the establishment needs to have the space to store the wine properly if managers are going to buy in that quantity. When purchasing wine, a primary consideration should be what products will sell. This will depend upon the tastes of your guests and their degree of wine
Purchasing, Receiving, Storing, and Issuing 251 sophistication. Just because a manager is able to get a deal on a certain type of wine does not mean that it will sell at his or her establishment. It is important to remember that a properly developed wine list serves as an important sales tool that not only allows management to increase profit margins, but enhances the overall dining experience in an establishment. What to Buy: Beer Beer is the most popular alcoholic drink served with dinner, and it accounts for almost 40 percent of total alcoholic beverage sales. Almost all establishments will want to have some type of beer on the drink menu. Because of its increased popularity and the myriad number of brands both domestic and import available, deciding exactly which beers to offer is somewhat more complex than in days past. Beer is still primarily purchased in bottles, cans, and kegs. Each receptacle has its own advantages and disadvantages, and much of the decision making with respect to what type of container to purchase will be based on customer preferences and the operation s available refrigerated and nonrefrigerated storage space. Some of the advantages to offering draft beer include the relatively small space required to store it and the ease and quickness with which it can be served. One disadvantage of serving draft beer is that, once tapped, the beer has a short shelf life (about three weeks). In addition, draft beer lines must be kept clean, and the product can be messy and easily wasted if the bartender is not trained in proper drawing techniques. Bottled beer has a longer shelf life, but it requires more storage space. Buying beer in bottles is appropriate for establishments that do not forecast large sales of certain types of beers but would still like to offer them to their customers. Buying these beers in bottles will allow the establishment to keep small amounts of many different types of beer for longer periods of time. Beer can come from many countries and almost every continent. The vast array of beers available to consumers today includes one for almost every palate. With the rise in popularity of microbrewed beers, the hospitality manager should decide whether offering some of these beers would be profitable for the establishment. In addition, low-alcohol or non-alcoholic beers also should be considered. With the public s increased awareness of the hazards of drinking and driving, stocking alcoholic alternatives is a must. What to Buy: Spirits Purchasing decisions for spirits will not depend upon whether or not to sell vodka or gin, but on which brands and how many varieties of each should be offered. Spirits are widely consumed, and they have an extremely long shelf-life. Like beer and wine, the popularity of distilled spirits and the variety available to consumers has increased dramatically. Most spirits are sold in bottles called fifths. A fifth has 25.4 ounces, or twenty-five 1-ounce servings. They can also be sold in
252 Chapter 18 1.75-liter or 59.2-ounce containers. The larger bottles tend to be more cost effective but are more difficult for bar employees to manipulate. In deciding what brands of liquors to carry, operations first must determine which brands will make up the well and which brands will constitute the call and premium brand categories. Well brands are those that the bartender pours when the customer does not specify a particular brand. For example, if a customer orders a vodka and tonic, the bartender would prepare the drink using well stock. Call brands are those that the customer names or calls when ordering a drink, such as a Bombay Sapphire Martini, specifying a particular brand. The decision of which brands to carry in the well is an important one because of price and customer expectations. Well products are poured most frequently, so they are purchased frequently and often in large quantities. The availability and price of brands chosen for well stock will determine overall profit margins as well as customers perceived quality of your operation. Because most operations today continue to adhere to a two-tier, and, in some cases, a three-tier pricing structure, the choice of which premium or call brands to carry is an important one as well. Like the well stock, call brands significantly reflect on the overall quality of the establishment, and choosing which brands to offer is an important matter from the perspective of your customers. Purchasing Procedures The choice of which distilled spirit, beer, and wine purveyors to use primarily will be determined by product availability and price, but it is important to remember that many states and locales have strict laws with respect to purchasing beverages on the wholesale market. Some factors that should be considered when choosing a purveyor are: Price Products available Delivery schedules Bulk buying discounts Payment policies Minimum order requirements The purchasing of beverages also may be complicated by what type of state in which your establishment is located: a license state or a control state. License states are those which allow beverage operations to choose which wholesalers or distributors with which they will work. Control states require that all liquor be purchased from state-owned stores (see Table 18.1). While this may prevent price wars, it does tend to limit the operator s options with respect to brand selection, delivery options, and supplier stock outages. Determining when and in what quantities to purchase distilled spirits is primarily based on the operation s sales history and its customers selection prefer-
Purchasing, Receiving, Storing, and Issuing 253 Table 18.1 Control States Alabama Montana Utah Idaho New Hampshire Vermont Iowa North Carolina Virginia Maine Ohio Washington Michigan Oregon West Virginia Mississippi Pennsylvania Wyoming ences. Inventory levels and par stock should be carefully developed so as to avoid stock outages and ensure good customer service. Par stock is the amount of product needed to be on hand in order to support daily operations. A good rule of thumb is to stock just enough product in the storeroom to prevent running out between deliveries. At the bar, sufficient product should be on hand to prevent running out between shifts or in one day, depending on the operation. Management also must remember that there is no value in tying up capital in a beverage inventory that does not move, or sell. Most businesses will develop strict control procedures with respect to purchasing, storing, and issuing alcoholic beverages. Purchase orders should be utilized throughout this process in order to create an audit trail that will track the product from the time it is ordered to the time it is received and stored. Some operations stamp or specially mark product as it is delivered before putting it in inventory in the storeroom. An empty-for-full system can then be implemented in order to exchange used, empty bottles from the bar for full, fresh product from the liquor storeroom. Because guests preferences will frequently change, it is important to note that your operation s par levels should be monitored closely and adjusted in response to this. Products with slow movement or no movement at all should be replaced with products that consumers demand. Receiving During the receiving process, beverages are generally delivered by the case or by the bottle, so it is not difficult to determine whether a case or a bottle is partially empty or whether beer being delivered is past its expiration date for freshness. Managers should have procedures in place to monitor incoming inventory, verify that they are receiving the proper items, and ensure that items are undamaged and fresh. Managers should make sure that all orders are immediately checked and stored; the person responsible for taking incoming orders should check the items received against the items on the purchase order, check freshness dates, and open cases to be sure all bottles are accounted for and undamaged.
254 Chapter 18 Storing There are several industry guidelines regarding beverage storage that a foodservice manager should be aware of to minimize loss of product and to ensure freshness and quality. These rules may be somewhat different for each kind of wine, beer, and spirit being offered. When a manager considers where to store wine, there are several important points to remember, including light, heat, vibration, and oxygen. Wine should be stored in a dark place with a moderate temperature (about 55 F.) that is free of vibrations. In addition, the bottles of wine should be stored on their sides, and the storeroom should be maintained at 70 percent relative humidity whenever possible. Adhering to these last two points will ensure that corks are kept moist and plump; this will prevent oxygen from getting to the wine. (Oxygen spoils the wine, turning it into vinegar.) In the proper environment, some wine can be stored for years and even decades. Beer, like wine, is perishable when exposed to the wrong environmental elements. Beer is damaged by light and heat and should be stored in a dark place with a moderate temperature. Beer in kegs should be refrigerated. Most bottled beer is sealed with a metal cap that keeps the carbon dioxide from escaping, and it keeps oxygen from spoiling the beer. Some beer bottles are sealed with a cork, not too unlike sparkling wine. Spirits are the most stable of all alcoholic beverages in that they will last for years. However, caution should be taken when storing these beverages because they are very flammable. They should be stored away from heat and flame to avoid a fire hazard. Keeping spirits away from heat sources also helps avoid a flavor change in the beverages. Certain cordials and cream-based liqueurs present challenges with respect to storage, especially once the product has been opened. Operators should take care to constantly monitor the quality of these products. Issuing Issuing product from the storeroom to the production area in most cases the bar is an important part of the checks-and-balance system necessary to control product theft and, consequently, profit margins and cost percent. Alcoholic beverages are a target for employee theft because the product is easily concealed and is highly desirable. It is essential to implement procedures during the purchasing, storing, and issuing processes that will ensure product quality as well as eliminate all opportunities for theft. Managers can discourage theft by keeping alcohol storage areas locked at all times and by implementing strict issuing procedures. Issuing is defined as the process of the bar acquiring alcoholic beverages and other food items from the storeroom. Larger establishments may have full-time storeroom staff that take care of issuing product from the storeroom to the bar.
Purchasing, Receiving, Storing, and Issuing 255 This process might include formal requisitions that require management s signature. Issuing creates an audit trail so that management can track where products, especially alcoholic beverages, are going. In smaller establishments, the issuing process may be as simple as asking the manager to unlock the cabinet or room in which the product is stored. The manager can take note of what is being removed from the cabinet and for what reason. Key Terms Breadth Call brand Control state Depth Empty-for-full Fifth Issuing License state Microbrewed beers Par stock Premium brand Purchase orders Well brand Study Questions 1. What are some of the factors that affect the depth and breadth of a wine list? 2. What factors must be considered when choosing purveyors of wines, beers, and spirits? 3. How should wine be stored properly? 4. How should beer be stored properly? 5. Describe the proper methods for storing the following: a. bottled wine b. bottled or canned beer c. beer in kegs 6. What factors should be considered in the storage of distilled spirits and liqueurs? 7. What control techniques are necessary in the storing and issuing process to prevent theft?