Buying Beer By The Case: Bar Options

Whether you can buy cases of beer at a bar depends on the bar in question. Typically, bars purchase their alcohol from a local beverage distributor or brewery, and they tend to buy in bulk to save money. Bars will usually stock three or four different levels of liquor quality, from well liquors (the cheapest option) to premium and super-premium liquors. While you may not be able to buy a case of beer at a bar, you can certainly buy multiple drinks, and some bars may even offer deals on multiple drinks, such as happy hour specials.

Where do bars buy beer?

Bars, pubs, and restaurants usually purchase beer from a local beverage distributor or brewery. This is because wholesale prices are much cheaper than retail prices, which helps to lower costs and increase profit margins.

Some businesses, like brewpubs and brewery taps, produce their own alcohol. However, most bars will purchase their beer from a distributor or wholesaler, either by contacting a sales rep directly or by using a bar and beverage ordering platform. Distributors and wholesalers will often offer discounts for bulk buying or frequent ordering.

Bars will usually stock a consistent supply list, which they restock each week, carefully selecting bottle sizes to get more value for their money. They will also outline their sources in their restaurant business plan. If they are looking for particular vintages, they can also buy them through private online liquor sales.

How much do bars pay for beer?

The amount bars pay for beer depends on several factors, including the type of beer, the quantity purchased, and the location of the bar.

Type of Beer

The cost of beer varies depending on whether it is domestic, imported, or craft beer. Domestic beers such as Budweiser, Bud Light, Coors, and Miller are typically cheaper than imported or craft beers. Additionally, the cost of beer can also depend on whether it is bottled, canned, or draft. Bottled and canned beers usually have a lower cost per ounce than draft beers, but draft beers offer more flexibility in serving sizes and can be used for drink specials.

Quantity Purchased

Bars typically buy beer in bulk and can take advantage of wholesale prices, which are lower than retail prices. The cost per unit decreases as the quantity purchased increases. For example, a 24-pack of beer may be more cost-effective than purchasing individual bottles or cans.

Location of the Bar

The location of the bar can also impact the cost of beer due to varying tax rates, distribution costs, and local demand. For example, the average price of a 24-pack of beer in Illinois is $15.20, while in Alaska, the average price is $31.21.

To maximize profits, bars typically mark up the price of beer by 200%-300%. However, the markup percentage may vary depending on the type of beer and the establishment. For instance, bottled or canned macro brews may have a higher markup of up to 500% due to their low wholesale cost, while craft beers may have a lower markup as they are more expensive to purchase wholesale.

How do bars price their beer?

Pricing beer is a complex process that involves various factors such as type of beer, establishment, and additional costs. The average markup on beer is about 200% to 300%, but this can vary depending on the specific circumstances. For example, bottles and cans of macro brew can be marked up to 500% due to their low wholesale cost, while craft beers may have a lower markup as they are more expensive to buy wholesale.

When determining beer prices, bar owners consider the average pour cost, which is the ratio of the cost of the beer to the revenue generated from selling it. Bottled beer can often be sold at a 25% pour cost, while draft beer is usually sold at a 20% pour cost. These low pour costs ensure a high-profit margin. The general cost-per-ounce for beer in kegs is 40 to 45% less than canned or bottled beer, so draft beer aims for a higher profit.

The 'three times' principle is a basic pricing model in the bar and restaurant industry, where the product cost is multiplied by three to cover operating costs such as labor, rent, and utilities. However, this approach may not work for higher-end beers as it could result in a price that is too high for customers. Therefore, bar owners must also consider the local market and their customers' expectations when setting prices.

Other factors that can influence beer pricing include the size and presentation vessel, alcohol content, and competition from other bars. Additionally, bars may need to account for spillage, spoilage, and over-pouring, also known as pour cost.

Overall, determining the price of beer involves a balance between covering costs and maintaining profitability while also ensuring customer satisfaction and competitiveness in the market.

How much beer should a bar buy?

The amount of beer a bar should buy depends on several factors, including the type of beer, its popularity, and the type of establishment. On average, the markup on beer is between 200% and 300%, but this will vary depending on the specifics of each beer and how it is served.

Bottled and canned beer typically have the lowest profit margin due to the extra packaging costs and materials required. However, patrons appreciate having options, and it allows bars to offer a larger selection. In contrast, draft beer has proven to be the most cost-efficient way to serve patrons. When buying in bulk, the individual price of each pour is lower, resulting in a higher profit margin. Generally, the cost of beer in kegs is 40-45% less than bottles or cans.

When determining how much beer to buy, bars must consider their desired profit margins, the amount they make on each drink sold, pour costs, and the cost of each drink. For example, if a bar pays $1 for a wholesale beer bottle, they should sell it for between $3.35 and $5, resulting in a profit margin of around 75% and a pour cost of about 25%.

Additionally, it is important to keep in mind that different types of beer, such as craft beer, may require different pricing strategies. Craft beer is typically more expensive to buy wholesale, so bars do not mark it up as high. The typical liquor cost range for craft beer is between 20% and 26%, resulting in a profit margin of 74% to 80%.

To maximise profits, bars should aim to offer a diverse selection of beers, including both mainstream and specialty options. This allows them to cater to a wide range of customer preferences and increase their sales.

How often should a bar restock?

When it comes to how often a bar should restock, there are several factors to consider. Firstly, the bar needs to ensure it has the perfect amount of stock on hand to meet customer demands without overstocking or understocking. Overstocking can lead to decreased turnover, tying up capital that could be used for other investments, increased storage costs, and difficulty selling products that lose popularity. On the other hand, understocking can result in missed sales, reduced customer satisfaction, and poor reviews.

To optimize their inventory levels, bars should consider the type of product and its shelf life. For example, perishable garnishes like fresh citrus should be restocked more frequently, aiming for a turnover of 4 to 6 times a month, which equates to having 5 to 7 days' worth of product on hand. For products with a shorter shelf life, such as refrigerated orange juice, bars should ensure they have enough stock to last until the expiry date without overstocking. Non-perishable items, such as jarred olives or mixes with longer shelf lives, can be purchased in larger quantities to reduce delivery costs, but it is advisable to use them within 2 to 4 weeks to avoid losses due to changes in demand.

Beer, in particular, should have a turnover of 2 to 3 times a month, which means having 10 to 15 days' worth of product on hand and restocking 1 to 2 times every two weeks. This ensures a steady supply of beer without tying up too much capital or storage space.

Additionally, bars can utilize inventory management software to simplify their ordering process and ensure they maintain optimal inventory levels. This software can automatically calculate turnover and provide comprehensive reports on the business's performance.

In the context of video games, such as Grand Theft Auto Online, the restock logic for bars may differ. In the game, players are notified when to restock the bar, and one successful restock can keep the bar supplied for four in-game days, after which no further earnings will be accrued until the next restock.

Frequently asked questions