Publican

losses are hidden by traditional pour cost analysis.
Therefore, most operators think that their pour cost
is just fine, only because they don’t know about
these losses and don’t realize that they have been
satisfied with a pour cost that should be two, three
or four points lower! The losses are hidden because
most operators are happy if their pour cost is stable
and as good as, or better than, it’s been in recent
months.
One of our newer clients was sure that they were
running very efficiently because their pour cost was
19% in September, which is in the lower range of
their recent history (see the charts). The bar owner
was convinced that such a “low” pour cost meant
that he couldn’t possibly have significant amounts
of theft and overpouring.
The owner’s position was that as long as their pour
cost was in the 19% to 21% range, he was happy. This
may seem logical, but it was dangerous because the
bar owner’s complacency was preventing him from
seeing what was really going on in his bar.
WHAT IS A GOOD
POUR COST?
ELIMINATE OVERPOURING
TO INCREASE PROFITS
by Ian Foster
Audits have found that 99 out of 100 bars are
missing about a quarter of their alcohol because
of overpouring and lost sales that have previously
gone undetected. This is discovered by weighing
every open bottle or keg and counting all the full
containers to find out exactly how much alcohol has
been used from every brand - down to 1/30th of an
ounce. That usage is then compared to the number
of drinks that were rung up into the cash register
or POS system. That way an owner can find out
exactly what has been overpoured or stolen. Then
you can calculate an ideal pour cost, which shows
what the pour cost really should be each month. The
differential can result from bartenders overpouring
and not ringing up drink sales.
How Much Money Are You Missing?
What is a good pour cost? The fact is that there
is no such thing as an industry standard “good”
pour cost for every bar or pub. You often hear
or read that if your pour cost is around 20%, you
are in good shape. That is simply nonsense - and
dangerous at that!
Whether or not your pour cost is good or bad
depends on your pricing and what drinks your
customers order. And both factors vary greatly from
one bar to another. The question is: What is the right
pour cost target for your particular establishment
in this particular month? An upscale restaurant
selling lots of expensive wines is always going to
have higher pour costs than a bar that sells little
wine but lots of shots. That’s because wine carries
higher pour costs than most liquor. On the opposite
end of the spectrum, I’ve seen a hotel with a 15%
pour cost despite enormous (hidden) losses. In fact,
32 The Publican
that hotel should have been running an 11% pour
cost; which might sound impossible. However, the
hotel is in Hawaii and almost half their sales are
poolside Mai Tais with a 37¢ cost and an $8 selling
price (which results in a 5% ideal pour cost on that
drink) - so an 11% pour cost makes sense.
Here’s the thing: you can’t really compare the
pour cost in one establishment to that of another
because every bar has different pricing and a
different sales mix.
Is Your Pour Cost Too High?
What about the pour cost in your bar? Is it too high?
Yes it is. Almost certainly.
That is because virtually every bar has enormous
losses from overpouring and theft. But those
How much money could you be throwing away?
What are those three percentage points worth? In
one case, it was $5,000 in profit every month. But
that, too, varies from bar to bar depending on the
reason for the losses.
If a bartender pours a $3.50 pint of beer, collects the
money for it, but doesn’t ring it up, you are out the
full $3.50. Such retail losses typically make up about
a third of the problem.
If you throw out a pint of foamy beer, then you are
only out about $1. Losses at cost typically make up
less than a quarter of the problem.
Overpouring is by far the biggest problem for most
establishments. Eliminating overpouring usually has
a surprisingly large effect on profits. At first glance,
one would think that overpouring results in a loss at
cost. If your bartender pours an extra ½-ounce of a