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04.2006

Massachusetts Beverage Business

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Article By: David Singer

MY LEAST FAVORITE PART of being a sommelier in a restaurant was inventory management. It's not the most sexy of topics. In fact, it's usually downright boring. I have many not-so-fond memories of coming in on a Sunday morning after a very late and busy Saturday night to count bottles. Or getting a call on my day off from my boss saying the beverage numbers aren't working, could I come in and count bottles again?

Keeping on top of the inventory is a chore that few people enjoy, but it's a necessity to running a tight beverage program. In my experience, errors in inventory are quite common and can lead to significant "leakage" in the company books at even the best restaurants. I've found such errors in every program that I have been newly responsible for, and have been able to decrease the beverage cost in one month by as much as 11% via inventory management alone. I'd like to share a few common errors that throw off percentages and numbers at the end of the month.

The first and most common mistake happens when the bottle comes in the door and there is some confusion about entering it correctly into inventory. You might have the correct producer, but the wrong appellation, or maybe it's a reserve bottling and the regular level price is entered, or perhaps you have the correct general appellation but the vineyard is wrong. All of these would lead to misalignment between your records and actual costs. One such entering-error I've found over and over again is pack size. Watch out for this. It's one of the easiest problems to solve, but one of most frustrating to find in retrospect. Any difference in pack size, even for the exact same product, has to be listed as a separate line item, with a different price and a different bottle count. Discovering that the case of $8OO Cabernet in your inventory came in a 6 pack and not a case of 12 will show up in your beverage cost. This often happens from one vintage to the next. You'll also see it frequently with half bottles, which have been known to appear in 24, 18, 12, or even 6 bottle cases. And look out for "broken" cases, meaning that the number of bottles that should be in the case is less than the size of case. The sample bottles do get pulled from somewhere, and it might be from the box you received.

A mixed case from the same producer but of different vintages and vineyards is also something to take note of. I remember a situation with a mixed case of Domaine Romanee Conti in a hotel that I once worked at. After it was taken from storage and put onto the wine list it wreaked havoc on my beverage cost until I discovered how it was listed in the inventory: "DRC mixed: 1" vs. the individual vineyards that I had listed on the wine list and inventory. It was no surprise that accounting took issue with a $3OOO case of "DRC mixed" wine that was missing. Luckily it was just hiding, split into multiple bins as a multitude of other wines. (As a side note, it is definitely worth including the person who does the books at the end of the month in your wine classes. It enables them to help you identify and solve problems.)

Spoilage is another area that can be overlooked. For example, the last glass in a bottle of wine is turning to vinegar and has to be thrown out, but the "lost" glass isn't noted. Or a bottle that is corked is returned to the distributor, but the credit isn't noted in the inventory. The irony of this is that for the beverage cost, it's counted against you - even if you've had a credit back - because the bottle is now mysteriously missing from inventory.

Human error is the last factor I'll mention. First, I've learned the hard way to do the physical inventory in pairs to minimize such factors as missing bins after a break, not seeing a case and miscounting the number of bottles in the bin. Confessing from personal experience, these are very easy mistakes to make after a couple of hours at cellar temperature. Another part of human error is keeping the POS system up to date. Vintage changes, different bottlings by the same producer and confusing POS descriptions all factor into incorrect sales figure, thereby inflating the cost. Whoever is responsible for the wine program should take care to update the POS system regularly - not fun, but essential. If it's put off for months, it becomes overwhelming and the likelihood of mistakes escalates.

WITHOUT A DOUBT, inventory is one of the most mind numbing aspects of the job. But it is a necessary evil. Running 1O points over budget easily taints an otherwise successful month. However, with some diligence and perseverance, you can isolate and resolve the problems. It's a chore that really pays off.

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