David Clarke: How restaurants can improve their year-round wine offering

September 4, 2017
by David Clarke
in Opinion & Analysis
with 1 Comment

restaurant-alcohol-bar-drinksWith more and more of the top wines in South Africa moving to annual releases of “take-it or leave-it” allocations it is very useful to have a “war chest” of funds available to be sure of not missing out when the wines are released.

In my previous life as a head sommelier in Melbourne I could not keep enough Burgundy in the cellar. The restaurant never had the cash to buy a year’s worth of Burgundy in the one or two months of releases. We did not want to over-extend our credit terms as we would have been cut off by our suppliers.

So this is what I did: Firstly I spoke with the accountant and made sure we were accurately measuring both our beverage purchases and beverage sales.

My budgeted cost of goods sold (COGS) was 38% at the time, meaning my weekly/monthly purchases on beverage had to be 38% of the total we sold in the same period.

So, if our beverage sales for a certain period was $10,000 then my purchases over the same period had to be a maximum of 38% of that, which is $3,800 or less. This took me a little time to get used to, and you have to be careful with all your mark-ups to make sure your stock holding remains constant or slowly increases. If it cost me more than $3,800 to replenish the stock I had sold for $10,000 I had a problem.

Again, you need to be able to accurately measure your purchases and sales to be able to plan for future releases.

Once I was receiving good reporting from the accountant, and I was able to put a system in place for weekly purchases, and my mark-ups were right, it was easy to stick to a COGS of 38%. I then moved the COGS to 36%; I increased my mark-ups so that I could spend $3,600 to replenish stock sold for $10,000 – please note this included water, beer, spirits, coffee, tea, mixers AND wine – I then “banked” the extra $200 I didn’t spend and allocated it for future wine releases.

Over time this allocation fund grew to a point that I was able to buy large allocations of expensive Burgundy and have zero impact on my weekly/monthly COGS figure. This massively improved the restaurant’s year-round wine offering.

  • David Clarke hails from Australia. A qualified sommelier, he now runs a wine agency called Ex Animo.

Tagged

Share this post

One Comment

  1. Anette MyburghSeptember 5, 2017 at 11:08 amReply

    Good read!

Leave a comment

Your email address will not be published. Required fields are marked *

*

SHOP ONLINE
winemag-storm
ADVERTISING
ADVERTISING
HOT AND HAPPENING
AEC v1.0.4
  • No upcoming events
AEC v1.0.4
ADVERTISING
newlstter2 Get the biggest stories of the past fortnight sent directly to your inbox. subscribe
FACEBOOK
TWITTER
ADVERTISING
BE SAFE

Wine magazine was published from October 1993 until September 2011 & now lives on in digital form as Winemag.co.za. We cover everything to do with SA fine wine.

XSLT Plugin by Leo Jiang