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How to Price Draft vs Bottled Beer

January 7, 2022

If you’re brand new to running a restaurant or bar, then you know pricing is one of the most challenging aspects of getting started. You want to make a profit while offering quality products at prices appropriate for your area and customer base. It sounds easy at first, but there’s actually a lot involved, especially if you want to maintain a balance that allows you to thrive. So, let’s look at how to price draft vs bottled beer.

How to Price Draft vs Bottled Beer

For many restaurants and bars, this means that you have different profit margins for different products. There will likely be just a few items on your menu that really up your businesses profits. While you might experience a slight loss on one or two other items to stay competitive. Fortunately, if you have a beer and wine license, it can be really easy to make up for those small deficits.

The Profit in Beer

One of the restaurant industry’s best-kept secrets is the absolutely ridiculous profit margin on draft beer. With the right set up, draft beer in particular can rake in up to an 80% profit margin. Bottled beer can bring in a pretty profit as well, but it typically costs 40-45% more per ounce, so it isn’t the most cost-effective option if you’re planning to own your business for more than a few years.

With that said, most savvy bar and restaurant owners do serve both. Having draft and bottled beer available allows you to serve a wide variety of preferences even if you’re only able to sustain a three or six-handle draft beer system. However, in order to make that work, you’re going to need to know how to price both appropriately.

Pricing Draft VS. Bottled

Draft and bottled beer are priced differently according to their pour costs. The pour cost is the initial cost of the beverage divided by its sale price. On average, you can expect a draft beer’s pour cost to be about 20%. A bottled or canned beer’s pour cost will be about 25%. This is a result of the fact that draft beer is substantially cheaper per ounce and also tends to fetch a higher price point. However, you might wonder why the difference in pour cost isn’t greater.

The truth is that there is a lot of overhead associated with purchasing and properly maintaining Los Angeles Beer Dispensing Equipment. You need the space, the pipes, the handles, the nitrogen, the CO2, the refrigeration. And a whole host of other smaller pieces necessary to serve a quality, safe draft beer. All of that overhead brings your pour cost higher. But even with all of that draft beer remains more profitable than bottled or canned beer.

Putting Together Your Final Prices

When you’re first getting started, you can certainly look at other businesses in your area for an idea of what your prices should be. You just need to be careful that you don’t assume their costs are the same. If you want to be certain that your prices are right for your business, you need to take all of your overhead into account and budget it to get an accurate pour cost.

For newer businesses with higher overhead, you can start by pricing your beers individually according to precise pour costs. Over time, as you get more comfortable with your business, you can embrace a grouped price point model. By that we mean you can start charging a standard rate for domestics, internationals, and specialty beers. This model can make your life much easier if you’re planning to consistently exchange what you have on tap.

Getting Started

Running a bar or restaurant is hard, and it takes an exceptional level of dedication. Fortunately, with the people of Southern California Beverage Company in your corner you can be sure that you’ll have the right equipment to make your business everything you hope it will be.

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Re-Opening Your Bar: Tips After Lockdown

May 11, 2021

Stock image of a person holding Welcome open board

Depending on your location and the classification of your establishment, it may have been quite some time since your draught beer system was last in use. As you well know, beer dispensing equipment requires systematic care if your goal is to serve the freshest and tastiest beer in the area. But how can you go about re-opening your bar after lockdown.

Re-Opening Your Bar: Tips After Lockdown

However, after weeks if not months of closures, your beer system is going to require a whole lot more than your typical monthly maintenance.
In order to help you get back on your feet and back in the swing of things, we’ve put together guidance from the Brewer’s Association for re-opening your bar. The list isn’t comprehensive, as many re-opening procedures will be specific to your set-up and location. However, it is a great way to get started while making sure you’re checking all the major boxes.

Schedule a Deep Cleaning

About two weeks before re-opening, you’ll want to make contact with someone who specializes in cleaning Los Angeles beer equipment. They’ll want to do a deep cleaning of all of your equipment to make sure that there’s no residue left. Yeast, mold, bacteria, and “beer stone” are the enemies of great beer. You don’t want your customers coming back to anything less than perfection.

Go Through Your Inventory

Check the dates on all of your kegs to make sure everything is still safe to serve. If you’re planning to serve anything new, then have a look at the brewer’s guidelines to make sure your new beers are given their best chance to shine.

Clean Your Lines

As with the rest of your draught system, your lines have probably been neglected a bit during the lockdowns. Even if you thoroughly cleaned them before closing up shop, there’s a good chance that plenty of unpleasant pathogens have settled down without the constant rush of liquid keeping them back.

Given the length of time that many bars have been closed, the Brewer’s Association suggests using a 3% caustic solution to flush your lines. The higher percentage will give your lines a thorough cleaning. Afterwards, you will need to flush the lines with water. Once the caustic solution is completely cleared, you’ll flush the lines with a diluted acid designed for draught beer lines. These two steps will ensure that there is nothing left behind. You will then flush the lines with clean water again to clear the acid before serving.

Clean Faucets and Trays

Your faucets and catch trays have been sitting for a while. Before you re-open you’ll want to take them apart and clean each piece carefully. If any parts appear broken or missing, this is the ideal time to replace them.

Wash All of Your Glassware

After months of sitting out, your glassware is going to be covered in dust as well as anything else that’s been floating through the air. Rather than waiting, just get it out of the way washing and sanitizing all of your glassware a day or two before you re-open.

Start Your Engines

A couple of days before you re-open, you’ll want to turn the gas back on, ensure reliable temperatures, and tap your kegs. Run beer through each line to make sure they’re ready to go. Then at the end of a long day, do a tasting of each beer to make sure they’re all the quality you expect. After sitting for a long period of time, there are many opportunities for things to go wrong. If you find a skunky beer or something that doesn’t taste quite right, contact the brewer.

Returning to a Semblance of Normalcy

To thrive after the last year, you’re going to have to stand out among your competitors. By ensuring the highest quality draught beers and prepping your bar to look clean, you’re already taking the first steps towards renewed success.

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The Basics of Opening a Bar

December 7, 2020

Opening a bar is no easy task. But having a knowledge of the basics of opening a bar can help. It’s an expensive endeavor that requires careful planning and dedication, but that should not discourage you if it’s your dream to own your own bar. As long as you break down the process and approach it one step at a time, there is no reason you can’t achieve your goals.

The Basics of Opening a Bar

Here are some basic of opening a bar, simple steps you can take to get started without getting overwhelmed. Once you are ready, you will need the best beer equipment Orange County has.

Set Up a Reliable Filing System

You are about to have a lot of paperwork on your hands. Keeping everything organized from the very beginning will make the process of opening your bar far less stressful later on. So, this is what you do:

Set aside a drawer in a desk or get a small filing cabinet
Purchase a small stack of standard hanging folders. Label them “Business Plan,” “Corporate Filing,” “Trademarks,” “Licenses,” “Rental Agreement,” “Human Resources,” “Payroll,” and “Taxes.”
Purchase a printer with document scanning capabilities.
Create folders on your computer that match the labels given to the hanging folders.
Do the same on a separate USB drive.

It’s very basic, but this lays the groundwork for a double filing system with digital and physical back-ups available. As your business grows, many of those original folders will get broken up into smaller categories.

Write Your Business Plan

Your business plan is a statement of what you want your business to be and how you want to see it develop over the next 3-5 years. It should include:

A strong understanding of your target demographic and your competitors
An indication of how you intend to improve on your competitor’s model to earn a greater portion of the market share
A straight-forward budget that includes paying yourself for your time, giving employees fair wages, and leaves a margin for incidentals

This is the document that you will use when applying for small business loans and some licensing, so you want it to reflect your talent as an entrepreneur.

Establish the Structure of Your Business

As tempting as a sole proprietorship can be in terms of reduced costs and paperwork, this structure is not recommended for a bar. There are too many risk factors, and you need to protect your personal assets. Instead, you should establish an LLC or corporation based on your needs. These structures separate your personal assets from those of the business, preventing someone from targeting you if a legal suit is brought against your bar.

Secure Your Name and Logo

Before you start the trademarking process, you will want to make sure that both the name and URL are available. A quick internet search and a glance through the United States Patent and Trademark Office’s database will let you know if you need to come up with a new name. Once you’ve found a meaningful name that’s available, you should work with a graphic artist to create a unique logo. Both the name and logo with need to be filed with the USPTO.

Secure All Appropriate Licenses

You probably already know you need a liquor license, but local ordinances may require any number of licenses to operate a bar in your area. Make sure you meet all of the local, state, and federal guidelines that are necessary. These may require some changes to your set-up, such as the presence of commercial water filters Los Angeles, so you’ll want to consider those factors when looking at potential locations.

Find the Spot and Decorate

At this point, you’ve finally reached the fun part. You get to pick a great location and decorate your bar. You will certainly have a lot of paperwork ahead of you still, so make sure you set aside space for a small office and a break area for your employees. From there, it’s all about the drinks and the fun, which can be made even easier with the help of SC Beverage.

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Why You Should Always Pour Your Beer

October 7, 2020

When you want to enjoy a cold one at the end of a long day, it’s often tempting to just grab a bottle from the fridge. It’s already chilled, and grabbing a glass seems like extra work. What you might not know is that choosing to drink straight from the bottle or can is actually doing your beer a massive disservice. Let’s take a look at why you should always pour your beer!

Your beer is literally designed to be poured. The physical action of pouring activates the carbonation, giving the beer its signature foam head. Initially, that may seem like all the more reason to not pour your beer. The head doesn’t taste particularly good, and it just seems to get in the way as you try to sip around it to get to the liquid beneath.

However, writing off the head as an annoyance entirely misses the point of its function. It is meant to sit right under your nose, fizzing away as you take your first sips. In fact, this process is crucial to your overall experience because taste isn’t just connected to your tongue.

Why You Should Always Pour Your Beer: Taste is Multi-Sensory

Your taste buds are crucially important to our perception of flavors and textures, but they don’t work alone. What you see, smell, and hear also contribute to that perception. As a point of reference, think about the last time you were at a Mexican restaurant and a large plate of fajitas passed your table. Even though you never consume any part of that meal, you can practically taste those fajitas. The carbonation in beer works in a very similar way.

When the carbonation is activated, bubbles race to the top of the beer, forming the head. The bubbles that reach the surface express the contained carbon dioxide, creating the pleasant fizz we’re all familiar with. As the CO2 is expressed so are many of the aromas creating by the fermenting process. This actually allows you to smell the unique flavors that make up your beer, gifting you with an elevated drinking experience.

Achieving the Perfect Head

Keep in mind that you can’t just dump your beer in a glass and have at it. The ideal temperature and pouring technique will vary depending on the type of beer you are about to enjoy. For example, lagers and pilsners are meant to be served ice cold. A temperature in the mid to high 30s Fahrenheit will usually do the trick. On the other hand, beers like stouts and porters actually taste better if served at around 50 degrees Fahrenheit, which is just about room temperature in your average Irish pub.

When it comes to getting the perfect head on your brew, aim for 1-1 ½ inches, or about two fingers. Techniques for achieving the right ratio can vary and are usually based on the density of the beer. For many beers, the standard incline pour will do the trick. Simply start pouring down the side of the glass with the glass at a 45-60 degree angle. Then gradually straighten the glass out as you pour depending on how much foam has formed. If there’s too much foam, allow some to spill over into the sink or catch tray. A heavier beer will take some time to get right. In fact, a good bartender will typically pour half the beer, then give the head time to settle before finishing the pour.

If you work in a bar, you will need quality beer fountain machines to produce a solid head. For the best beer equipment Los Angeles has around, check out SC Beverage.

Improving the Experience

Whether you are just trying to impress your friends or looking to improve the customer experience at your restaurant, a perfect pour makes a huge difference. For even better quality, consider using a professional beer system from SC Beverage to deliver the freshest brews from ice-cold kegs.

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Why Does Draft Beer Taste Better?

June 5, 2020

It’s an old adage, but it’s true. Draft beer taste is just better. Assuming the bar staff is competent, and the draft lines are appropriately cleaned, draft beer provides the best overall experience. The question is why. What makes a keg so much better than a bottle or a can? Why does draft beer taste better?

The truth is that several factors contribute to the higher level of flavor integrity we can expect from a draft beer. According to the experts, process, time, temperature, light, and carbonation all contribute to the difference we notice when comparing draft beers to canned or bottled options.

For all your beer systems needs, SC Beverage has you covered.

Pasteurization

In almost all cases, draft beer is not pasteurized. Pasteurization is a process that heats liquids to kill bacteria that would otherwise thrive in that environment. Because bottles and cans are typically stored for long periods in a variety of temperature ranges, pasteurization is necessary to ensure that your beer is safe to drink when you crack open that lager or IPA. Draft beer, on the other hand, is transported and stored below 50 degrees Fahrenheit, a temperature that prevents bacterial growth. Unfortunately, pasteurization does change the flavor of your beer by bringing the liquid up to about 140 degrees Fahrenheit.

Time

Fresher is always better, especially if you prefer hoppy beers like IPAs. Responsible bar owners will typically only order enough kegs to get them through the week, ensuring that their customers receive the best product. By contrast, bottles and cans could be months old by the time you pick up that six-pack at your local corner store. Most beers do not age well due to oxidization, so draft gains a major advantage. Bar owners and brewers suggest that you can elevate your experience further by asking your local bartender what kegs came in most recently.

Temperature

Regardless of the proper serving temperature of your beer, consistency is key. When bottles and cans are distributed, there’s no telling how many times they are warmed, chilled, or left in blazing heat. The variation and heat both contribute to the rapid aging of your beer. Kegs, on the other hand, are constantly kept in a cold environment, preventing the deterioration of the product during distribution.

Light

If you’ve ever picked a lovely, imported wheat beer from the bottom shelf of a Bevmo and opened it to find the beer was bitter or rancid, you’ve experienced a “skunked” beer. This is far more common in light-colored bottles and is the result of UV light passing through the glass. By going with a draft option or merely opting for a can, you can avoid this entirely. However, keep in mind that some beers, like Corona or Heineken, actually rely on a little UV light exposure to give their beers the right finish. If you love the touch of bitterness in these beers, opt for the bottle.

Carbonation

Americans love their fizzy drinks, and beer is no exception. In fact, it’s one of the reasons you enjoy that draft beer taste at your favorite bar so much. You see, the draft lines rely on pressure to deliver beer from the keg to the tap. To create this pressure, CO2 and/or Nitrogen are used, giving your beer its slight fizz and more noticeable foam head.

Drinking Draft

Simply put, draft is usually better in a well-managed bar or restaurant. Industry experts suggest looking for bars that are sufficiently staffed and at least moderately busy. You can also ask how often they clean their draft lines. If your bartender seems taken aback, ask for a can or a bottle. However, you can easily remove all doubt by just having your own system. So, if you’re looking to upgrade your restaurant or simply want to be the most popular house on the block, contact SC Beverage to discuss your draft system needs.

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