Auditors account for every drop of alcohol

Bar owners intent on preventing losses help venture thrive

In most industries, a 20 percent to 25 percent loss is enough to put you out of business.

In the bar business, such losses are routine.

Beer foams up, and there are spills.

Bartenders pour a little extra into drinks for bar regulars.

Waiters and waitresses discreetly dole out freebies to friends.

And more unscrupulous employees flat-out steal while their employers aren't looking.

But Keith Bowler says a 25 percent loss isn't necessary. He says in many cases, he can reduce that to 5 percent.

More business owners are hiring him to do just that as the economy slows down and the expenses of running a business go up.

Bowler is the owner of Bevinco, which performs "alcohol audits" for bar owners, pinpointing losses and translating the ounces lost into dollars. The Wake County business is a franchise of a Canadian company of the same name. Bevinco has franchises elsewhere in the state, including Durham and Charlotte.

"Our objective is to show them where they can save money," Bowler said. "A lot of times it can be thousands of dollars."

Richard "Gus" Gusler hired Bevinco nine months ago when he suspected employees might be stealing at Players Retreat bar and restaurant in Raleigh.

"I kept looking at what was going on in the bar and how much I was buying and how much I was selling, and it just didn't compute," Gusler said.

He hired Bevinco without his employees' knowledge, letting Bowler and his staff in during predawn hours to weigh every bottle of liquor and every keg of beer and count the full bottles in the bar.

That data was put into a computer, which compared the amount used with the amount that the bar's computer system said was sold.

The first week, there was a little more than $2,000 in missing alcohol (translation: missed sales). The second week, it was $2,660.

"It turns out, that first week was a slow week," Gusler said. "Twenty percent of what was going out of here wasn't getting paid for. That one week, we lost an entire keg of Carolina Pale Ale."

After two weeks of data, Gusler told his staff he was watching. He eventually fired two people.

Make every drop count

In the early morning hours last week, Bowler and his staff were at Players Retreat doing their weekly audit.

Again each bottle and keg was weighed. Again, all the full bottles were counted.

"Everything is done in grams, and ... [the computer] converts it into ounces," Bowler said. "We know exactly what the full bottle weighs and exactly what the empty bottle weighs. We know the density of the liquor, all of that."

Most bar owners use unscientific systems for guessing how much liquor they are using, Bowler said, or they calculate "pour cost," dividing the amount they spend by the number of times that liquor is used.

That system is flawed, Bowler said, because it can include liquor that wasn't paid for. "If you miss 2 ounces over 200 bottles, that's a lot of liquor," Bowles said.

Along with showing how much alcohol is missing, the Bevinco system offers detailed information that bar and restaurant owners may find helpful.

"See here," Bowler said, pointing to the computer screen last week during the Players Retreat audit, "the Marti Mojito rum is over by 24 ounces, but this other rum is under by 17 ounces. What that tells me is that they changed a recipe or they have a bartender who doesn't know which one to pour."

For such services, Bowler charges $150 to $250 a week, depending on the size of the audit.

Gusler said the fee is worth it.

Last week, when his audit was done, the Players Retreat's losses were just 3.4 percent, or $363.16.

Any week the bartending staff has a loss of 5 percent or less, Gusler rewards each person with a $20 bar tab. "They make it three out of four weeks," he said.

Leaving pharma behind

Bowler of Raleigh started his Bevinco franchise 3 1/2 years ago after leaving a job selling packaging and storage products to pharmaceutical companies.

Now he has 15 clients that he visits for weekly audits and a staff of two. But he said he hopes business will expand as word spreads.

He said the slowing economy has actually been good for business.

"I really thought that when the economy took a downturn, we'd have owners who said they couldn't afford it," Bowler said, "but that hasn't happened."

More eyes on Bevinco

That could be because there are very few companies like Bevinco, said Dave Henkes, vice president of Technomic, a food industry research company in Chicago.

Already, Bevinco has drawn enough industry interest to form partnerships with research firm ACNielsen and food wholesaler Sysco.

"Historically, I think on the bar side, ... [bar owners have] been a little more lenient, because it's a higher profit item," Henkes said. "But with the economy the way it is, cost right now is such a huge thing. Anywhere you can save a penny or prevent a penny from being lost, it can make or break a business."