Managing bar inventory isn’t simple, but with the proper best practices in place, you can keep your bar well-stocked, organized, and ready for customers. After all, your bar can’t operate optimally without the right ingredients, barware, and maintenance and cleaning supplies.
In this article, we’ll dive into how to manage bar inventory and even include a step-by-step process for you to follow. We’ll also touch on the unique challenges of managing bar inventory and how to conquer them. And finally, we’ll discuss how the right bar inventory app can help your team focus more on your patrons and less on your stockroom.
What’s included in bar inventory?
Bar inventory refers to everything your bar stocks to serve patrons and keep your bar organized, from liquor to bar glasses to olives to cleaning supplies. Here’s a review of some of the things your bar likely stocks:
From popular wines to craft beers to famous whiskeys and top-shelf tequilas, your bar could stock hundreds of varieties of alcohol. Whatever your business serves, you’ll need to identify and track all the drinks you plan to offer.
Just as crucial as liquor are the ingredients you use to prepare your bar’s drinks. From tonic water to orange juice to citrus, olives, syrups, and herbs, you’ll also need to prepare a comprehensive list of non-alcoholic ingredients. Don’t forget to consider other drinks and snacks you may serve, like coffee, soda, and mixed nuts.
Shot glasses, shooters, pint glasses, goblets, highballs, lowballs, pints, flutes… the list of glassware your bar carries could go on and on. And whether you carry just a few types of glasses or dozens, it’s essential to know precisely what kind of glassware your business needs to serve drinks the way it wants.
Supplies such as cocktail napkins and paper coasters are integral to serving your customers. And equipment such as cocktail shakers and strainers are integral to making drinks. Think about what bar supplies your establishment uses or will use to conduct business on a nightly basis and include them in your list.
MRO inventory is your maintenance, repair, and overhaul inventory. MRO encompasses the supplies and equipment needed to conduct preventive and corrective maintenance. In the case of a bar, it’s what you need to keep your beer taps working, your wine fridges cooling, and your bar clean and inviting. Cleaning supplies, repair equipment, and even PPE should all be included on your list.
You’ll also need to track long-term investments, known as assets. This includes bar furniture, artwork, light fixtures, point-of-sale machines, espresso machines, wine fridges—all the things your bar owns (but doesn’t sell). These are important to track, even if they don’t move around, because they are depreciating assets with tax implications—plus, their value should appear on your balance sheet.
The right tracking system can help you keep an eye on asset condition and even manage key maintenance dates that’ll help extend the useful life of equipment and machinery like dishwashers, taps, and walk-in fridges.
Unique challenges of managing inventory for a bar
Managing inventory for every kind of business is complex, but managing bar inventory has a special set of challenges. Here are four reasons why:
Inventory is constantly turning over and changing
Bars can be busy places—and inventory can easily be turned over in a weekend or less! Your bar almost certainly reorders supplies once a week, and many bars order once every few days. There’s no sugarcoating it: it is hard work to keep a bar adequately stocked.
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Spoilage is always a possibility
Another challenge of managing bar inventory? Ingredients can spoil. Mixers, garnishes, opened bottles of wine, and other valuable inventory in your bar’s stock can become unusable in a matter of days. That’s another reason correctly forecasting demand and practicing optimal inventory control is essential.
Employee turnover can be high
Bars, like many other restaurants, sometimes face higher-than-average employee turnover rates. And when new employees start, it can be harder to implement consistent bar inventory management strategies. This is one of many good reasons to choose a simple, intuitive inventory management solution that requires little to no formal onboarding.
Assets like glassware can be damaged regularly
A fourth reason why bar inventory management can be tricky? It’s next to impossible to avoid damage to items like barware, equipment, and furniture. After all, these assets—even though they’re intended to live long, useful lives—are used heavily, night after night. Keeping an eye on them, and ensuring they’re still in good enough condition to use, is another item on your team’s inventory management to-do list.
Related: How to perform an asset audit
How to manage a bar inventory
Managing bar inventory doesn’t have to feel insurmountable, especially if you follow these proven steps:
Step 1: Determine what your bar needs on hand
The first thing you’ll want to figure out is precisely what your bar needs to stock to meet typical customer demand. If you’re a new bar, you’ll want to check out the competition and lean on market research to determine what to serve and how much to buy.
If you’re an established bar or lounge, you can look through records from your point-of-sale system or forecast demand based on inventory usage. Remember that you’re not just deciding what liquor you need on hand, but everything else on your inventory list, from barware to napkins to hand soap to dish detergent.
We highly recommend ironing out two key figures: your bar’s inventory usage and average pour cost.
Bar inventory usage
Bar inventory usage requires you to take your monthly starting inventory, then add all additional items you order throughout the month. To avoid double-counting, ensure you subtract any duplicates from your ending inventory. You’re left with a pretty decent picture of what your bar needs in a month. Ideally, you’ll have several months or more of records to inform your usage projections.
Another way to think of inventory usage is simply figuring out how much inventory your business uses in a month.
Average pour cost
While you are focused on figuring out what your bar needs to meet customer demand, you’ll also want to think about what makes your business profitable. That’s why calculating your average pour cost is essential.
Pour Cost % = Inventory Usage / Total Sales
Keep in mind that most bars have a pour cost of about 20%.
Step 2: Reduce spoilage and unnecessary carrying costs
One key to easier inventory management—and a more profitable bar—is carrying as little inventory as possible while still swiftly, comfortably satisfying your customer demand. By practicing proper bar inventory control, you’ll be able to maximize profits and run your bar without disruption or delay and avoid wasting money on inventory that will spoil or sit unused.
One way to reduce spoilage is to simply order your most perishable ingredients in smaller batches more often. Another option is to frequently assess what’s about to spoil and run a drink special or happy hour accordingly. You can also use fruit, citrus, or half-used bottles of wine to create sangrias or other batch mixed drinks.
This is also the perfect time to think about the worst-selling items on your bar menu. Perhaps it’s time to refresh your establishment’s offerings or cut down on how much you order to prepare these items.
To truly practice bar inventory control, you’ll need to set pars for every item on your inventory list individually, from a top-shelf vodka to a best-selling beer. Then, figure out exactly what you need to get through your busiest nights without wasting anything.
To do this, you can use any of the demand forecasting strategies outlined above or simply review inventory usage records for the past three months. Remember to adjust your forecast for seasonal shifts, holiday weekends, significant sporting events, and more.
Step 3: Take inventory regularly
Most businesses can get away with taking inventory once a week. That’s often not the case with bars. In fact, many bar owners need to take inventory nightly, at the end of the final shift, then prepare to place orders first thing the following day.
Of course, updating inventory after every single pour is not realistic, so your team will need to find a practical way to count inventory nightly. You can take inventory manually on a stock sheet, use an inventory spreadsheet, or with the help of an inventory app.
While each inventory system has its pros and cons, an inventory app can help reduce data entry errors, distinguish between items that look or sound alike, and automatically create inventory records that help you understand changing stock levels over time.
Related: What is reorder point?
Step 4: Place orders on schedule and as needed
Now that you’ve determined how and when your team will take inventory, you’ll need to commit to placing orders as scheduled. After all, your vendors and suppliers need time to get your items to you—and you don’t want to end up buying things at a retail grocery store or liquor store just to avoid stockouts.
For best results, place an ordering schedule in a high-visibility area of your business. If you place orders daily, post order deadlines and cutoffs for each vendor where your team can see all the details. These reminders will help ensure that everything your bar needs to run service is ordered on time.
When determining ordering times and days, you’ll need to iron out each supplier’s minimum order quantity, lead time, supply delay, and other delivery rules and guidelines. Make sure your company maintains enough safety stock to keep pouring drinks while you wait for your next delivery.
You’ll also want to identify backup suppliers nearby so that if you do experience a stockout or shortage, you’ll know where to turn. This is especially important if you work with partners who often sell out of certain items or if you import alcohol internationally.
Remember that keeping your inventory records accurate and enabling low stock alerts on your inventory app, should you choose to use one, can reduce the risk of stockouts.
Step 5: Train staff to assist with inventory management
Even if your bar experiences high employee turnover, you’re going to need buy-in from the rest of your team if you want to keep inventory optimally managed. Train your employees to participate in every aspect of bar inventory management, from reviewing usage records to counting stock to checking the condition of items like barware and equipment.
If you decide to use an inventory app to track your bar inventory, you’ll also want to train employees to use that software. Apps like Sortly are intuitive and user-friendly, making them an excellent option for those late-night shifts.
Step 6: Update inventory as deliveries come in
While it’s probably not possible to update your inventory counts after serving every customer, your bar should commit to updating its records after deliveries are received. That way, your whole team will know that start-of-shift, beginning inventory is accurate—and that all updates are counted at the end of the night.
While updating inventory with every delivery might seem tedious, it doesn’t actually have to take long. Use an inventory app to quickly update levels right from your smartphone, whether from the bar or the stockroom.
Bar inventory tips and tricks
Now that you know how to manage your bar inventory, check out these tips and tricks for keeping track of your business’s wine, beer, and liquor.
- Always keep wine out of direct light
- Remember to track all the critical details about your wine, including vintage, varietal, and vineyard
- Always store wine lying down with labels facing out, as turning wine can impede its natural aging
- Use a keg scale, the rule of tenths, or a “keg check” to determine and record keg weight
- Keep track of critical details about your beer, including keg delivery dates, within an inventory app
- Buy small batches of craft beer and see how they sell before committing
- Keep valuable alcohol (such as top-shelf liquor and expensive wines) locked up in a stock room rather than behind the bar
- Check with your suppliers about liquor specials, particularly after the holidays
Sortly is a top-rated inventory management app perfect for busy bars and lounges. With easy inventory counting features, robust reporting, barcode and QR code scanning, and low stock alerts, Sortly can help your bar track everything it needs for excellent service, night in and night out.
Ready to find out how Sortly can help you manage your bar inventory? Start a free, two-week trial today!