Beverages

I got some sales figures from the KL outlet to review.  My initial aim was to get the alcohol volumes to be in a better position to negotiate with the alcohol suppliers.  I did get that, but the figures (and revenues) were very interesting, bringing to light some things that I hadn't thought of before.

- Beers make up nearly 80% of alcoholic beverages.  This negotiation is key to our costs.
- The revenues from non-alcoholic "mixer" drinks is greater than all our spirits (bottles, mix drinks, cocktails) combined.  We really should look at developing a great set of "coolers" that people who don't drink would be proud of drinking.  Something with a bit of funk.
- Our drinks menu is also too focussed on those spirits.  Many of the options need to be removed, to improve the usability of the menu.
- Fountain soda is also very popular.  I always thought Coke (and variants) would be highest in volume, but Iced Lemon Teas are double the intake of Coke.

With all these negotiations, I would focus on the areas where we have greatest volume (and therefore greatest cost).

Alcohol Supplies

So I had my first meeting with an alcohol supplier, Moet Hennessy Diageo.  It is, as with all things in this business, a learning experience.  Some key points:
1. An American ribs and casual dining restaurant would not likely to have significant amounts of wine consumed, and even the type of wine that is consumed would be on the lower scale.

2. What wines one does carry will reflect in the image of the restaurant.

3. Given the general heat and humidity, white wines should be more crisp and refreshing (which would be the ones coming from NZ, Australia etc) compared to the white wines from Europe.  I have a feeling that this was the sales guy doing his pitch.

4. Advertising and promotions can be provided as working capital, but the restaurant must then hit the volume targets.  There is some kind of "clawback" clause for the supplier to get the money back from the restaurant. For us, I think this will be unknown for the first 6 months, so we should consider just nett purchases, or performance based bonuses.  The other option is that they drip feed you capital for specific items like uniforms, or menus so you don't get the whole working capital straight up.

5. I need to understand these wine offerings better.  I cannot tell the difference between all the different types of wines available.  Perhaps it's more of "what is a good wine that will go with the dishes that we are serving?"

6. There is alcohol that you purchase for house pours and then there is alcohol that you purchase to sell by the bottle.  If you have one brand of house pours, then you cannot utilise a competing brand in the same category.  Of course if he supplier does not stock a category, you're free to buy from whomever. But for wines, there is no category.  You can only serve their white or red.  I assume this depends on the restaurant's buying power.

7. We should look at reinforcing our image with American wines and spirits.

8. Contracts where there is performance bonuses or A&P subsidies are at least 1 year long.

9. Looking at wines in the low $20s range for this restaurant.

10. MHD doesn't do their own deliveries, they work with suppliers to execute the order.  However, suppliers do not provide the A&P subsidies.

Overall, I think we don't suit MHD as their range is too high.  Need to keep looking.