How to Maintain Margins Without Passing Costs On
Twice a year, when the Consumer Price Index (CPI) is updated, the liquor industry feels the impact, particularly through hefty excise rate increases. These rising costs put significant pressure on venues, reducing margins and forcing tough decisions on pricing. Instead of simply passing costs on to consumers, consider these strategies to maintain profitability while keeping your drinks affordable.
1. Cost Analysis: Are You Getting the Best Deals?
- Review your cocktail costs carefully. Are you using the most cost-effective house pour?
- Compare pricing on liqueurs- there are significant savings to be found.
- Steinbok Liqueurs offer the sharpest nip price on the market, with further price breaks available in 5L and 20L bulk formats. Steinbok’s per-nip pricing is consistently lower than competitors like DeKuyper, Marie Brizard, and Bols, helping to improve your cost per serve and overall GP.
2. Juice Procurement: Quality and Cost Savings
- Buying juices in bulk can lead to substantial savings. Packaged juice quality has improved drastically in recent years
- EastCoast Juices provide some of the freshest and most affordable juices on the market, ensuring consistency in taste and presentation while keeping costs down.
3. Rethinking Imported Liqueurs: Avoid High Costs
- International liqueur costs have skyrocketed, either eating into your gross profit or forcing you to raise prices beyond what consumers are willing to p
- Cost comparisons show that brands like Cointreau and Midori come at a significantly higher price per bottle and per nip compared to Australian Brands like Steinbok, making it a more cost-effective alternative without compromising quality.
4. Volume Drives Profit: Consider Your Consumers
- Instead of increasing prices, focus on driving volume sales. A well-priced, high-quality cocktail menu encourages repeat purchases and higher foot traffic.
- Consumers appreciate affordability without sacrificing quality, making bulk purchase savings a win-win for venues and patrons alike.
5. Batched Cocktails: Increase Speed of Service and Efficiency
- Pre-batched cocktails allow for faster service, reducing wait times and increasing turnover.
- Authentic Batching Co. provides pre-batched spirts classics, saving labour and ensuring consistency in every serve.
- Innovation in batching can also bring unique, high-margin cocktails to your menu without adding complexity.
By conducting a thorough cost analysis, securing the best deals on spirits and liqueurs, and optimising your ingredient sourcing, you can protect your margins without alienating customers with price hikes. Smart purchasing decisions and bulk buy options like Steinbok’s 5L and 20L formats can help keep cocktail prices stable while maintaining profitability.
Stay ahead of CPI increases with strategic purchasing, your venue and your customers will thank you.