. PACKAGE PRICING ,

. PACKAGE PRICING ,

Catering beverage services are often combined with food and other services into packages for business and social functions. In situations in which the customer would like a fixed price for beverages, prices are calculated based on the use of either house brands or name brands, on an hourly scale. The following guidelines are generally followed:

One-hour open bar at reception, per person:

House brands:

Premium brands: $6

Two-hour open bar after dinner, per person: House brands:

Premium brands: $8

Hourly prices are based on an average of the probable consumption of alco- holic beverages in a one-hour period. Women consume an average of 0.5 to 1

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Catering Beverage Pricing

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Chapter Nine Catering Beverage Management

reasonably sure of accurately estimating consumption. In this example, the fol- lowing calculation was applied:

1 drink (women) + 1.5 drinks (men) = 2.5 drinks ÷ 2

= 1.25 drinks per person

House brands:

$5 per person per hour

Premium brands:

$6 per person per hour

It is important, however, to evaluate the type of function and the attendees before quoting a per-person drink price. The consumption level of some groups can be considerably higher than others.

The pricing structure for additional periods of time is also based on average consumption levels and the format of the reception or meal. If guests are con- suming a full meal, alcohol consumption after the meal will be less than if the party is a reception that continues for three to four hours. Men consume an av- erage of approximately one drink per hour. For example, the beverage price for

a two-hour period after a meal is calculated as follows:

1.5 drinks per woman + 2 drinks per man = 3.5 drinks ÷ 2

= 1.75 drinks per person

House brands:

$7 per person for two hours

Premium brands: $8.50 per person for two hours

Wine served with the meal is calculated by dividing the per-bottle price by 6 (the average number of glasses yielded from a bottle). In prepriced packages, management can select a house wine on which to base the price. Wine prices can be set in terms of either one glass or two, with the latter based on a con- sumption level of 1.5 glasses per person:

Wine

Per Person House

Bottle Price

A complete beverage package incorporating the examples in this section would be:

House Brand

Two-hour bar

Total per person

These prices are then added to the total food package, gratuities, and taxes along

Catering Beverage Menu Planning

Catering Beverage Menu Planning

Profitable catering services develop specialty menus that include appropriate wines and cordials. Depending on the formality of the meal, up to seven wines and cordials can be matched with menu items in each category of the menu for- mat. Figure 9.8 offers a seven-course menu paired with a selection of four wines

. Figure 9.8 ,

Chapter Nine Catering Beverage Management

and a port. A sauvignon blanc is served with the appetizer course, a chardonnay with the fish course, a red merlot with the beef course, champagne with the dessert course, and port with the cheese plate.

Each of the red or white wines paired with the menu items in Figure 9.10 com- plements the food item with which it is served. This blending of food with wine is often referred to as marrying foods and wines. When menus of this caliber are planned, it is important that caterers work with beverage and wine experts to choose a variety of wines for the entire menu and achieve the marriage of food and wine. Distributors are the best resources for finding the best wines available within the desired price range.

Figure 9.11 shows a five-course menu paired with three wines for a simpler ver- sion of a wine marriage menu from the Greenbrier’s Gold Service dinner program.

Alcohol Service and Liability

There is a growing awareness, fostered by citizens groups, of the of number of alcohol-related automobile accidents that cause death and severe disability. This awareness has resulted in stricter drunk-driving laws and increased liability for operators who serve alcoholic beverages. State liquor laws throughout the United States prohibit the sale of alcohol to minors. Other laws about the sale of alcohol vary by state and are open to court interpretation.

According to John Sherry, in Legal Aspects of Foodservice Management, many states have statutes, called dramshop acts, that hold operators liable for deaths or injuries to third parties resulting from the illegal sale of alcohol to customers. The susceptibility of foodservice operators to the legal ramifications of alcohol-related accidents that occur after a patron leaves their establishment is greatest in cases involving third-party liability, primarily because these cases have few defenses. An injured third party who sues under the dramshop acts must prove that a li- censed seller sold alcohol under conditions deemed illegal, thereby causing or contributing to the intoxication of the customer whose actions resulted in the vic- tim’s injury.

Third parties may also charge foodservice operators with common-law neg- ligence either for noncompliance with statutes prohibiting the sale of alcohol in certain situations or for failure to anticipate the effects of poor supervision on the premises. In some states, the common-law rule is expanded to hold servers re- sponsible for expecting that any sale to an obviously intoxicated person with a known intent to drive a motor vehicle poses a reasonably foreseeable threat to other drivers and pedestrians.

Foodservice operators who offer catering beverage services face the same task of identifying minors and intoxicated patrons as do lounges and restaurants. The atmosphere of a private party does not absolve caterers from legal respon- sibilities with respect to the service of alcohol, even in situations in which the

Alcohol Service and Liability

. Figure 9.9 , HYATT REGENCY, BEAVER CREEK CATERING WINE LIST (Courtesy of The Hyatt Regency at Beaver Creek, Colorado)

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Chapter Nine Catering Beverage Management

Alcohol Service and Liability

host purchases the alcohol from the operator and then dispenses it to the guests. The liquor license of the business governs the service of all alcohol within the establishment and can carry over to off-premise functions. Off-premise opera- tors should make themselves fully aware of the liquor laws governing their com- munity. Bartenders and servers are also responsible for identifying minors and exercising prudent judgment in the service of alcohol to individuals who exhibit signs of intoxication. They are held accountable for the knowledge that an in- toxicated individual represents a danger on the roads because in a private-party situation they can assume that all guests intend to drive a motor vehicle.

This pressure of liability increases the need for foodservice operators to ini- tiate training programs and policies in their establishments to help protect them from lawsuits and liquor-law violations. The use of training programs that are na- tionally recognized by insurance companies and the courts can act both to de- crease premiums for liquor liability insurance and to provide evidence of intent and concern on the part of management for responsible alcohol service.

A number of alcohol service training programs have been developed by na- tionally known organizations. Of these, TIPS (Training for Intervention Proce- dures) and ServSafe Alcohol are the most widely known.

The TIPS program concentrates on providing servers with keys to identify- ing customers who are on the verge of becoming intoxicated. Some of these signs are:

, Drinking too fast , Becoming loud, mean, argumentative, and obnoxious , Complaining about drink strength or preparation , Slurring words , Lighting more than one cigarette , Becoming clumsy and changing their walking pattern

This program is available through certified instructors who hold training pro- grams locally.

The ServSafe Alcohol Program is offered by the National Restaurant Associ- ation Educational Foundation. This program concentrates on training managers, either in formal training sessions or by distance learning. Written materials, videos, and CD-ROMs help managers train servers in their own establishment, incorporating the individual needs of each business. Managers and servers must pass a written exam before receiving a certificate of completion. The program helps managers assess the level of liability risk for their individual business and provides servers with training to increase food-and-beverage profitability by pro- moting the sales of premium brands and food accompaniments to drinks.

To effectively develop policies and training programs, management should research state and local liquor laws and discuss the level of third-party liability risk their operation carries. Insurance companies that specialize in alcohol liabil- ity insurance are an excellent resource.

Chapter Nine Catering Beverage Management

. Summary ,

Well-managed beverage sales can be a profitable extension of every catering op- eration. Both alcoholic and nonalcoholic beverages can contribute to the success of a beverage program.

Catering beverage sales contribute to overall profitability if properly evaluated and priced. Because catering beverages are sold by the bottle, drink, and time pe- riod, a variety of opportunities are available to create highly profitable beverage prices. Catering menus for special occasions can serve wine either by the bottle or glass to increase beverage sales.

Catering foodservice operators must be aware of liquor liability laws and the need for server training programs. TIPS and ServSafe Alcohol are two nationally recognized training programs for alcohol service.

. Endnotes ,

1. John Sherry, Legal Aspects of Foodservice Management, Second Edition, 1994 (Educational Foundation of the National Restaurant Association).

2. Life Saving Training for Alcohol Serving Professionals (New York: Insurance Information Institute, April 1988).

. Questions ,

1. What is meant by the term food-and-beverage mix? What should the sepa- rate percentage be for food and beverages?

2. The demand for nonalcoholic beverages at catering functions is increasing. How should these beverages be priced compared to alcoholic beverages?

3. When developing package prices for beverages, what options can be of- fered to a customer? How are hourly beverage packages priced? What guidelines are used to determine prices?

4. Calculate the per-drink price of a bottle of scotch with a purchase cost of

$18, a yield of 12 drinks, and an 18 percent beverage cost.

. Chapter Ten ,

Quality-Service and Standards