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Sarah Ward

How to Survive Inflation: 5 Key Strategies and Tips for Bars

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Inflation–including food inflation and liquor inflation to general bulk supply inflation and beyond–is surging across the U.S. and globally. Every bar, from the oldest bars in America to a new cocktail bar, are dealing with the effects that inflation has on costs. Overhead expenses are affected, and bar owners are having to get creative with solutions to inflation. Even the top 25 Michelin Star restaurants are struggling.

Of course, the process of owning a bar comes with a lot of work no matter what the economy is going through. From learning how to open a bar to getting a liquor license, bar owners have a lot on their plate. Inflation takes the work of owning and operating a bar and exacerbates its high costs and inventory needs. 

Inflation is tough on bars, there’s no doubt about that. There are, however, steps bar owners can take to mitigate the effects of inflation and save their budgets piece by piece. These five key strategies and tips will help a bar stay afloat, and even find ways to improve practices beyond inflationary eras. 

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5. Maintain Order Management

There are a lot of issues around inflation and supply chain management issues that you can’t control. It can feel overwhelming. There is always action you can take though. Working with your order management needs to find resolutions is the place to begin.

When it comes to order management, your plan should start with BlueCart. BlueCart is the platform that brings together an order management system with order processing, a wholesale marketplace, and customer support from the BlueCart team. Get everything you need in one high-performance dashboard.

BlueCart also offers gated and open-access eCommerce storefront creation. When it comes to bars, you might think eCommerce ideas won’t be applicable. However, in terms of inflation, opening up eCommerce operations is a quality plan. Whether that means selling merchandise online, or opening a space for making reservations on your website, overcoming inflation can rely on eCommerce. 

4. Promote Call Drinks

When you’re facing the effects of inflation on your bar sales, one option to leverage is promoting sales of higher-priced items when you can. Of course, supply chain issues can make this difficult. When you have the opportunity, however, you should focus efforts on suggesting your more profitable drinks. Namely, your call drinks.

Call drinks are standalone liquors or liquors made for mixed drinks that are instantly recognizable. Brands like Grey Goose and Hendrick’s all fall into this category. Call drinks are the opposite of well drinks, which are the generic brands of liquor available most days at most bars. 

If you’re a  bar owner, make sure your bartenders know how to upsell. You should also keep more than one bartenders guide book and mixology books on hand to help them mix up call drinks that will boost profitability with advice from mixologists.

Of course, you can still lean on house wines and beer on tap for consistent, predictable profits. However, promoting your pricier options will be a nice boost to your business bank account.

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3. Get Creative with Ingredient Substitutions

Inflation can have a direct effect on specific ingredients and an overall effect on bulk base ingredients. As the food supply chain experiences scarcity, availability drops and costs rise. There will be issues with no direct solution for those exact ingredients. There are always, however, creative ways to make it work. 

For cocktail ingredients, you can expect to see inflation effects on everything from garnishes to liquor. You can make it work with other ingredients by suggesting different alcohol brands and even types of alcohol in some situations. 

For garnishes, you can often substitute a lime wedge with some lemon, or use packaged juice. Check out a mixology set for some creative ideas. You can also mix up house drinks with your own recipes.

When it comes to food ingredients, inflation rears its ugly head against basic ingredients and specialty items alike. You can use similar tactics here, and suggest different cuts of meat products or even a comparable entrée food option of something different but equally delicious.

"Key Takeaway: Inflation takes the work of owning and operating a bar, and magnifies the parts that relate to high costs and inventory needs."

2. Measure Twice, Pour Once

Every bartender worth their margarita salt knows about a standard pour, standard wine pour, techniques for pouring beer, and free pour techniques. After a while behind the bar, pouring techniques become old hat. That can lead to well-practiced drinks, but it’s always good to stay on top of pours, as well as other ingredient amounts. 

When it comes to pouring liquor and other beverages, measuring through the amount in the glass or with a cocktail jigger is a budget-saver. For bar owners, the best practice here is to have standards set for the bar, so your bartenders have a reference for any questions.

For items that go along with drinks and meals that require some portion forethought, planning ahead saves a lot of headaches. From planning cut sizes to only preparing what you need for a limited time to avoid shrinkage, there’s plenty you can do. This is also helpful with restaurant risk assessment.

1. Streamline Inventory

Streamlining inventory is always a good idea for optimizing your bar operations. It is especially helpful when inflation is beating you down. Your inventory–from physical products on hand to cycle inventory counts to the numbers of your perpetual inventory system–will all be affected by inflation. The one area you have control of with inflation and inventory is your inventory practice.

To streamline your inventory practice, BinWise is the way to go. BinWise Pro, paired with the BinScan app for mobile usage, makes your food and beverage inventory that much easier. From the wine app feature to bar POS integrations, BinWise is designed to ease your workload and reduce counting time by as much as 85%. It gives you inventory control from the device of your choice.

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Frequently Asked Questions About Surviving Inflation for Bars

Surviving inflation is something every bar owner or manager will have to think about at some point. It can seem overwhelming, but the more you know, the less you have to worry about. 

When you dig into questions about inflation, there are plenty of people looking for solutions and answers behind what inflation really means for businesses. Our answers to these frequently asked questions will clear up some common concerns. 

Are People Eating Out Less Because of Inflation? 

Overall, yes, people are eating out less due to inflation. According to a survey from LendingTree, 67% of Americans are eating out less due to inflation. On top of that, 31% are tipping less when they do go out. Inflation affects customers as much as it does businesses, with higher prices making it less feasible to go out to eat. 

How Does Inflation Rate Affect Businesses? 

The inflation rate affects businesses by driving up costs on items that are limited in supply. The limited supply affects costs as well, as many businesses are looking to buy those same supplies. When the inflation rate is high, it’s more costly for businesses to maintain stock and supplies to keep their customers happy.

What Causes Inflation for Bars? 

Inflation for bars is caused by discrepancies between supply and demand, and governments printing more money. Like any other business, bars are reliant on incoming supplies and customers spending money. When supplies are short, and the dollar is worth less, bars have to get creative with both inventory and customer acquisition.

What Should You Cut During Inflation?

During inflation, the best things to cut are costs you can make up for in other, less expensive areas. For a bar, this could be purchasing more liquors in bulk to save money, or featuring drinks with less-expensive ingredients. Inflation is the time to check your spending habits and see what can be substituted.

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Bar Inflation Survival: Bust Out the Tiki Torches, We're Surviving Together 

Inflation is a scary thing to deal with, especially when you’re already balancing the activities involved in running a bar. When you’re armed with knowledge, however, you can plan for the worst and come out successful on the other side. Come back to the BinWise blog for more tips on dealing with inflation.

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