After weeks of time-consuming meetings with local liquor distribution reps, local market research, and decision wavering, you finally feel confident that your bar is set up and ready to go. You put in your best effort to provide your customers with a great selection at a great value. You stop by your local corporate chain restaurant to celebrate a job well done and can’t help but to look at their liquor list to compare prices. Your mouth drops open. How can they possibly have the same brands you so carefully negotiated for a fraction of the price? How can they afford a $2 Tequila Tuesday and $3 Whiskey Wednesday? It seems simple to justify the pricing structure the corporate giants maintain as volume-based deals. The truth is far more complicated.
Before we dive into how bar consultants work, let’s briefly break down the structure of the liquor industry in America. Suppliers (Anheuser-Busch, Diageo, Beam Sundatory, E & J Gallo, etc.) own multiple liquor brands across varying types of spirits and beverages. Diageo, for example, controls beers (Guinness, Smithwick), spirits (Ketel One, Smirnoff, Cîroc), Gin (Tanqueray, Gordon’s), Rum (Captain Morgan, Zacapa), Bulleit bourbon, and much more. Gallo’s products range from fine wines down to jug wines and well spirit selections. Each supplier contracts out to local distributors on a brand-by-brand basis causing more confusion. In order to carry an entire supplier’s product line, a restaurant may have to deal with up to 7 different distributors. These distributors ultimately control the pricing on the products. The local distributors deploy sales reps to meet with individual restaurant management to sway them into picking up their offerings. As these reps are, at their most basic role, salespeople, they are incentivized by their management team to push certain brands and lock in long-term commitments with their accounts. While distributor reps are a great resource for bar managers, they often have conflicting interests and responsibilities.
Seasoned bar consultants spend years cultivating relationships with distribution management as well as individual suppliers. These networks enable a consultant to negotiate directly with an agent of the supplier who can, in turn, communicate your proposed deal structure to the local distributor for approval. Suppliers are aware of a successful consultant’s cumulative portfolio and can unlock custom pricing tiers and promotions typically reserved for the national brands. They are incentivized by brand exposure across multiple concepts along with a higher representation of their portfolio on each restaurant. With Diageo, a consultant may promise a higher purchase volume of Bulleit in a bourbon bar concept while simultaneously agreeing to placing Smirnoff Vodka in the well at a sports bar. E&J Gallo may receive upper tier wine by the glass placements in a fine dining restaurant for Orin Swift while securing house wine pours with Barefoot in a neighborhood grill.
Bar programs, like food menus, thrive most when they are continually updated and maintained. A consultant will continually connect with suppliers and distributors to discuss upcoming sales opportunities as well as brands primed for national marketing pushes. The best part: the suppliers pay you for the product they are sampling at your menu price! Suppliers are also investing local, regional, and national marketing dollars into these products, encouraging your guests to ask for them by name. Using deals negotiated by your bar consultant, you can offer these high-demand brands at lower prices than your competitors.
Goliath Consulting Group offers a bar consulting program with a history of success. Our portfolio includes sports bars, taverns, chef-driven upscale restaurants, neighborhood grills, and cafes. Whether you are looking to open your first restaurant or tweak your existing inventory, Goliath can assist your restaurant and optimize your bar program. Email Getresults@GoliathConsulting.com to schedule a consultation today.
Goliath Consulting Group is a restaurant consultancy based in Norcross, GA. The company offers a wide range of consulting services for independent, chain and franchised restaurants across the US. For more information go to: http://www.goliathconsulting.com