Mixed Up

Salmon swim upstream certain times of the year, but they have an excuse: sex. A few times, I have seen F&B Directors try to swim upstream, but the payoff is considerably less titillating.

The tide of customer trends is strong indeed, so isn’t it a little mixed up to place significant promotional resources toward something that you want to sell, rather than something they want to buy? It’s like, well, swimming upstream, without the excuse. But there is a road map that tells us how to get where we want be and it’s right in front of us. It’s the Sales Mix.

Consider these examples and see how using the Sales Mix can help:

Case #1: we love good wine, we know our customers love good wine, so let’s re-concept to a wine bar.
Case #2: we are located less than 2 hours from wine country; we should be promoting wine.
Case #3: 75% of the beverage menu’s “real estate” is devoted to wine.

But what does the Mix tell us?

In Case #1, the Mix says “spirits.” Nearly 50% of sales are spirits. Yes, the customers love good wine. Premium glass options outsell house sales so wine is an important part of the Mix, but it is not the proper focus for the concept. The premium and super premium spirits brands are moving too, and moving faster.

In Case #2, the Mix tells us it’s beer that’s in the house. Go figure. I would have picked wine as the big opportunity too, until I saw the Mix. Good news: the Mix says customers want premium products – imports, crafts.

Finally, in Case #3, the bar is decidedly spirits-centric. Nothing wrong with a good wine list but don’t short-sell your strength.

So, F&B Directors, start with the Mix and then dive deeper:

1. The Liquor-Beer-Wine Sales Mix is the obvious starting point. Dive: when was the last time you spot-checked your POS to ensure that what’s going into each category is what you want to go into each category? Deeper: are your prices correct? Are meal period and outlet designations accurate?

2. There is a secondary Liquor-Beer-Wine Mix: item sales. Don’t overlook the fact that beer may be 1/3 of your sales but 48% of drinks sold. For example, go deeper: what is this Mix by outlet? It’s rare that restaurant, lounge, and room service each have the same Mix. In fact, I’ve never seen a room service dinner Mix that wasn’t dominated by wine, regardless of the lounge figures.

3. So, if we know the dollar totals of Liquor-Beer-Wine, and we know the items sold for each category, then we must be able to figure the average drink price. Listen up, salmon. If you think wine isn’t important for the Case #1 and Case #2 hotels, consider that many of the “items sold” are full bottles of wine, so wine often has the highest overall average check. And I’ve seen properties where beer flies off the shelf, but the average price is so low I tell my client to padlock the spigots. Not really, but you get the idea. Deeper dive & big idea: calculate average profit per drink/item sold.

And now you’re ready to swim with the tide. It boils down to this: build powerful, effective promotions (and concepts) by using the right information to promote your strengths.