While the overall restaurant industry has been struggling in the weak economy, some operators have taken creative steps to preserve profits. JK&T Wings, Inc., a Michigan-based franchisee of Buffalo Wild Wings Inc., is using a patented technology that helps them monitor every drop of draft beer poured at their restaurant locations. The technology helps restaurant managers curb losses that arise from employee theft, faulty equipment, or simply bartenders who pour beer incorrectly.
Weak economy or not, losses due to wastage have been common in the restaurant industry across food and beverage categories alike. The added complexity of pouring draft beer out of 2000 ounce kegs can make the situation get out of hand quickly. The lack of visibility and the inability to measure the beer poured makes draft beer a category susceptible to high losses.
“Draft beer has been prone to losses due to theft or negligence, simply because you couldn’t measure what was being poured,” says Mark Young, founder and CEO of Syracuse–N.Y. based company US Beverage Net, Inc., which invented the monitoring technology and received two patents on it. “Losses of 20 to 25 percent are very common in the restaurant industry.”
US Beverage Net’s patented system automatically compares exact ounces of beer poured with the number of “rings” on the restaurant cash register in real-time to determine any losses. The system uses flow-meters installed in each beer line to count the ounces of beer flowing through. The data is collected by the company’s proprietary “bevBOX” that sends the data to the company’s secure servers via the internet. Restaurant operators can access this real-time information on US Beverage Net’s website from any remote location.
JK&T Wings tested US Beverage Net’s patented system at six of their restaurant locations before deciding to implement the technology companywide. Since the average Buffalo Wild Wings store serves as many as 30 different beers at each location and derives 30 percent of its revenues from alcohol sales, the decision was made easy by the significant results and clear benefits realized.
“US Beverage Net provides a tool that allows our organization to achieve draft yields of 97%, on a consistent basis,” says Brian J. Carmody, COO of JK&T Wings. The automatic data-collection and computation, as well as the real-time and web-based reporting capabilities of US Beverage Net’s system allowed managers to access timely and accurate information to address problems “on the spot.” Additionally, the monthly subscription fee model (which includes all equipment, maintenance, and service) allowed operators to focus on reducing losses and fixing problems rather than maintaining and servicing equipment.
With losses reduced to below 3%, company management is looking forward to the companywide implementation of the technology. “With companywide implementation of US Beverage Net, our general managers will have the ability to easily and accurately control their draft costs, while our regional managers will have the data to track their general managers, and I will have the ability to oversee draft costs, in all of our stores,” says Carmody.
The group, which owns over 30 Buffalo Wild Wings locations in Michigan, Illinois, and Louisiana, and will be opening its first location in Massachusetts in November this year, has signed a 4-year contract to implement the system at all its locations. The company also plans to integrate the system into basic employee training at each of its regional training facilities.
During most of 2009 and 2010, restaurants typically struggled as diners mostly stayed home to save money. However, Buffalo Wild Wings, the sports bar franchise known for its chicken wings and beer offerings, saw its second-quarter 2010 profit rise 31% and sales increase 12%. The company also ended the quarter with 681 restaurants, up 14% from a year ago.
Having worked with a couple of Buffalo Wild Wings franchisees in JK&T Wings and Buckeye Restaurant Concepts (based in Colorado), Young has been impressed with their operations and willingness to embrace new technology. He believes the success of Buffalo Wild Wings, which generally has outperformed the restaurant industry, is due to its strong management practices. Young is optimistic that the adoption of his company’s draft beer monitoring technology by these franchise groups has set a tone for the rest of the company to follow.
US Beverage Net, which launched in 2005, has already established a wide customer network including major national chains such as Hooters, Rock Bottom Brewery, Old Chicago, and Quaker Steak & Lube. The company has customers in over 20 states, with strong presence in the Boston, Chicago, and New York markets.
In addition to providing inventory control features to restaurant and concessions operators, the company uses the data it collects to provide real-time insights to beer manufacturers and distributors to help them make informed marketing decisions. While marketing information has been available in the form of scanner data from off-premise retailers such as convenience stores, grocery stores, and mass merchants, such information has been thus far unavailable for restaurants and bars. Young says his company’s vision is to bridge this information gap within the hospitality industry and provide data and marketing solutions to the entire beverage supply-chain.
About US Beverage Net, Inc.
US Beverage Net (usbeveragenet.com) is a data-management company that offers real-time web-based inventory control and marketing solutions to a customer network consisting of bars, restaurants, concessionaires, and beer distributors and manufacturers. The company has developed a patented technology that monitors every ounce of draft beer poured and compares it with product sold at the cash register. By tracking actual product movement in real-time, US Beverage Net’s technology helps restaurant and bar owners reduce losses from theft and waste of beverages. The data collected by US Beverage Net also provides cost effective inventory management to beverage distributors and previously unavailable marketing information to beverage manufacturers.
For more information please contact Josh Solomon at 315.579.2360 or jsolomon[.]usbeveragenet.com.