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The Importance of Having the Right Product Portfolio Behind the Bar

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07/01/2020 "Don't find customers for your products, find products for your customers" - Seth Godin

When your bartenders are behind the bar, you want to make sure that they have the right product portfolio to make the drinks their customers are ordering. The right product mix leads to higher sales, greater profitability, and improved customer satisfaction. To ensure that you have the right product mix, it’s important to follow a few basic guidelines.

Key principles of product selection

So how do you know when you have the perfect product mix? As a rule of thumb, you will want to keep your product inventory as streamlined as possible. This will help to ensure that you stock only what you can sell and that you order only what you need. By following these basic principles, you can do a lot to improve the overall profitability and financial performance of your bar. For example, you won’t have a growing inventory of spirits that you never sell. Any money that you have tied up in unneeded inventory is “dead money.” That’s why many bartenders tend to favor the bestselling, most popular spirits – these are precisely the spirits that customers will ask for by name when they visit your establishment.

Another key principle is that you should stay on top of trends. This is all part of offering the ultimate customer experience and building word-of-mouth buzz in the local community. These trends include everything from premiumization (in which customers are trading up to more expensive, premium spirits when they order) to the rise of artisanal gin. It could also include new mixers and new garnishes. In some cases, a number of these trends could coalesce around one big trend. For example, the “session cocktail” trend is really a mix of several smaller trends – the desire of customers to order lower-alcohol drinks, the popularity of herbs and exotic ingredients, and the craft spirits trend.

It’s also important to think of the spirits behind the bar as being part of an overall portfolio. You want to avoid gaps in this portfolio, and that means being able to diversify across a number of different categories and price points. You will want to have a mix of bestsellers and premium spirits, and you will want to have at least one local or regional product, such as a whiskey from a local craft whiskey distiller.

The must-stock categories in every product portfolio

While diversification is important, it is also important to keep in mind that the core of your portfolio will always consist of just a handful of spirits:

  • Gin
  • Vodka
  • Whiskey
  • Rum
  • Tequila

There is a good reason to stock each of these spirits, beyond just the obvious observation that they are all extremely popular. Gin and vodka are two neutral spirits that can be used to make just about any mixed cocktail. Whiskey is a spirit that is also quite versatile and tends to be the spirit of choice for those patrons seeking a premium experience. Of these spirits, tequila is perhaps the most polarizing. Once seen as just a “party drink” that people consumed as shots, it has emerged as one of the latest spirits to experience the premiumization trend.

With that as your base, you can then decide whether to build out the product portfolio further with the addition of other secondary spirits. If your bar sells a lot of tequila, it might want to stock up as well on mezcal. If your bar sells a lot of Scotch and Irish whiskey, it might want to include Bourbon, Tennessee whiskey, and Japanese whisky. And if your bar sells a lot of mixed cocktails, then you will definitely want to experiment with adding fruit and cream liqueurs (such as Baileys).

How to showcase products in your portfolio at your bar

For most bars, one of the best ways to showcase products in their portfolio is by paying extra attention to the back bar. In terms of the back bar, there are a few key tips to keep in mind. For example, you should always stock your bestsellers at eye level and within easy reach of the bartender. This makes sense for two reasons – it makes fulfilling orders as easy as possible, and it also reinforces certain brands in the minds of the customer.

Another best practice is to group similar sorts of spirits together. So, for example, you would group your light spirits together (such as gin and vodka) and your dark spirits together. You might group your Scotch whiskeys together and your American whiskies together. The basic rule is the group “like with like.” Yet another best practice is to sub-divide your premium shelf into three basic levels: good, better and best. This helps customers to trade up very easily to a different quality category.

But the back bar is not the only place to showcase your spirits. You can also use your bar menu as a very effective way to merchandise your spirits. According to one survey, 1 in 3 customers will consult the bar menu in order to make a  choice. And, within the bar menu itself, two of the most important areas are the upper left and upper right corners. You want to make sure that you reserve this real estate for your bestselling pours and special promotions.

The bar menu is also a great way to encourage the “upsell.” This occurs when a customer trades up from a mass-market spirit to a craft or artisanal spirit. It also occurs when a customer stays within the same brand but decides to move up to the next level of that brand. For example, a customer might move from Johnnie Walker red to Johnnie Walker blue or Johnnie Walker black. The next step on the journey of premiumization might be moving to a Highlands or Speyside whisky producer with a 12- or 15-year-old Scotch.

As can be seen above, two guiding concepts – profitability and versatility – should help to guide your selection of spirits. And, by taking into account market trends and the overall move to premiumization, it is possible to ensure that you have a product portfolio that is both profitable and guaranteed to meet or exceed customer expectations.

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