Millennials are a sought-after target market in the hospitality industry, thanks to their estimated spending power of $200 billion per year and tendency to eat out five times a week, on average. A majority of millennials 21 and up also report spending time at bars at least once a week, whereas older generations are less than half as likely to frequent drinking establishments. That said, how do you capture the attention of the millennial generation? For a peer group used to convenience, speed, and instant gratification, it should come as no surprise that self-serve is the way of the future for this crowd. From beer and wine to kombucha and coffee, the notion of “pour it yourself” is not just reserved for soft serve ice cream and frozen yogurt anymore. For restaurant operators, it’s important to understand how this new style of service impact sales, and how it works logistically if the guests are in control. Below are some of the major benefits of self-serve technology for restaurants and how they impact the bottom line.
To understand how offering self-serve beverages impacts the bottom line, we first need to understand how the technology works. Upon entering a bar or restaurant with the system in place, guests present their ID to be checked, and are then given a RFID card and glass from the host. At this time, the guest can scan the card at any self-serve tap. The tap recognizes each specific card and records by the ounce what the guest is pouring. Guests can sample various flavors or drafts, or pour a full glass of a beverage they know they like. Because the machine is logging every ounce that leaves the tap, there is no money lost on samples or tastings. The RFID card also allows the facility to track consumption, making sure no guest is overserved.
But how does this boil down into actual dollars and cents? As previously mentioned, an RFID self-serve system means restaurants are paid for every drop of alcohol.Based on roughly a 23 percent loss on every keg, PourMyBeer estimates this saves restaurants an average of $142 per keg compared to restaurants using a standard draft system. In addition, the system gives access to a dashboard to see trends and traffic at each tap; i.e. how quickly a keg is is emptied, how popular a flavor is, if people are sampling and not returning for more samples, or if the keg is not moving. This helps the facility to have an immediate understanding of what their guests are drinking, and can indicate what should and should not be repurchased, so that money doesn’t go to waste. Additionally, with the knowledge of exactly how much of any given liquid is left in the keg, restaurants and bars do not need to prematurely swap out before fully emptying it, therefore no product goes to waste. This also makes the self-serve method much more sustainable than a traditional draft set up.
In addition to product efficiency, a self-serve system also saves costs on labor. In a recent stress test between a high volume draft system with four bartenders and the same amount of drafts with self-serve technology with two supervisors, it was found that the self-serve system outsold the traditional draft 4 to 1 over the course of three days. This is a 400 percent increase in sales, plus 50 percent saved on labor costs. Why are these numbers so staggering? To put it simply, it is a more streamlined process. There is no wait time, allowing for more consumption and more sales. Additionally, the freedom to self-serve gives guests the opportunity to find something they truly enjoy, so they’re more likely to refill.
But what are the realities of implementing this for a restaurant or bar owner? A large draft system with RFID technology and about 40 taps, runs around $50,000 to install, which could be a large cost to stomach as an initial investment. However, most restaurants have seen this cost made up by the 6 month mark. One such restaurant made the switch in 2017 and noticed that its average weekly beer sales increased from $2,000 to $8,000 after installing the self-serve system. Additionally the overall net weekly sales at the restaurant doubled from $25,000 to $50,000.
While there will always be a need for bartenders and servers in hospitality, we’re seeing the idea of self-serve technology being welcomed with open arms. It is an incredible way to give the customer a new experience and allow them to fully control what they consume, all while gleaning invaluable data from taps in a way that would not otherwise be possible. Additionally, self-serve offers a tremendous cost reduction in labor, prevents wasted product, and can provide invaluable insights for smarter product ordering based on consumer trends. Thanks to millennials, there’s no question that this technology is here to stay. For a restaurant or bar that is hoping to improve their bottom line, self-serve just might be the extra helping hand to do so.
Josh Goodman is the founder and CEO of PourMyBeer, the industry leader in self-serve beverage technology. Based in Chicago, IL, PourMyBeer creates tap systems that allow restaurant and bar patrons the freedom to pour their own drinks and offers clients unique technology to lower operating costs, customer wait times and wasted goods. Since launching its system in 2015, PourMyBeer has quadrupled its revenue and now powers over 3,000 taps of beer, wine, coffee and kombucha across the nation for companies like Buffalo Wild Wings, Marriott and Whole Foods.