Improving your concept's drink selections can boost business—but at a price.

When Cowlaboration #8 dropped last December, Luke Shimp could only smile.

The owner of Red Cow, a four-unit, Minneapolis-based chain, Shimp knew the company’s latest collaboration with a local brewery—a ruby-red cranberry sour developed with nearby Indeed Brewing Company—represented the continuation of an innovative endeavor that has propelled Red Cow’s marketplace standing and performance.

“This is something that gives our guests the unique, experiential opportunity they’re seeking,” Shimp says.

Though Red Cow boasts four-dozen craft beers on tap as well as more than 30 wines by the glass, the Cowlaborations—exclusive, limited-time beers Shimp and his team devise with craft breweries—signal the restaurant’s desire to transcend the status quo.

“The Cowlaborations serve notice that we’re not like everyone else,” Shimp says.

Across the country, forward-thinking restaurants like Red Cow are similarly investigating ways to elevate their beverage programs, well aware that a distinct drink menu can drive a restaurant’s reputation and its bottom line.

The catch? Well, sometimes you need to spend money—and certainly invest time—to make money.

Enhance what’s already present

Oftentimes, the quickest and most economical way for a restaurant to enhance its beverage program resides not in an expensive overhaul, but rather educating staff to better utilize and sell what already exists behind the bar.

Mike Walls of Synergy Restaurant Consultants suggests restaurants lean on their vendors, many of whom offer tastings, educational programs, and experts to help a restaurant improve its operations, service, and selection. When Walls managed Michael Jordan’s Chicago restaurant, for instance, a local distillery provided its ace bartender to help staff develop a signature cocktail, something that would have run Walls upward of $2,500 on the open market.

“These efforts often provide service staff a personal relationship with the product that you’ll see reflected in sales,” Walls says.

Invest in craft beer

Quite simply, Walls says, craft beer spurs greater profitability, and it’s simple math to see how.

Say a Chicago operator buys a keg of Miller Lite for $90. From that ubiquitous keg, the bar can dispense 124 16-ounce glasses at 72 cents per glass. Charging $3.75 per glass, the restaurant captures about $375 in profit per keg. 

Now, Walls says, buy a keg of craft beer for $160 instead. Charging $6.50 for each 16-ounce glass, the profit runs $646. The dollars and cents make sense, especially amid craft beer’s continued shine in the marketplace. 

“You can bring something unique and, many times, local to guests that complements the menu and builds the restaurant’s reputation,” Walls says.

Create exclusive brews

Red Cow developed its first Cowlaboration, a session red IPA, in February 2016 with Colorado’s Odell Brewing Company. Since then, the restaurant has released additional exclusives with Odell, Indeed, and Minnesota-based Lift Bridge Brewing Company, including a chocolate stout that Red Cow incorporated into a milkshake.

All Cowlaborations are limited-time runs of 12–20 kegs, and Shimp terms the investment “virtually nonexistent.” Though Red Cow commits to taking all of the beer, a distributor sets a fair market price. The breweries, meanwhile, charge nothing for the collaborative effort.

“It’s a win-win, and we both get to touch guests in a unique way,” Shimp says.

For Red Cow, the Cowlaborations serve a brand enhancement that places the Red Cow name alongside an “exquisite brewery.” In turn, the breweries generate deeper marketplace awareness, especially since Red Cow creates hoopla around its Cowlaborations and highlights each new exclusive brew before a database of some 50,000.

While in management at Ditka’s Restaurants in Chicago, Walls also partnered with breweries on exclusive beers. He specifically targeted breweries producing less than 2,000 barrels a year, which often signaled existing capacity. Like Shimp, Walls did not pay for the breweries’ services and expertise.

“The breweries are fighting for taps and shelf space, so many of them welcome this opportunity,” Walls says. 

Expand the wine list

When Greg Zanitsch opened Charlotte, North Carolina’s The Fig Tree Restaurant in 2005 with his wife, Sara, the original wine list ran about $30,000. Today, it exceeds $300,000.

While the couple never had visions of developing such an expensive and expansive wine program—its 2017 summer wine list ran 35 pages and featured about 1,000 labels—it has become the restaurant’s calling card. Wine Spectator has routinely recognized Fig Tree for having one of the world’s most outstanding restaurant wine lists.

“And it’s absolutely a revenue producer for us,” Zanitsch says.

Given the frequency in which tastes and trends evolve and seasons change, adding new labels is an undeniable boon for business. The Fig Tree is nearing the purchase of a second climate-controlled wine cabinet for storage—likely to the tune of about $4,000—but Zanitsch says the financial cost, especially given the wine list’s steady ROI, remains secondary to the investment of time. Each Friday, the couple spends eight to 10 hours updating the wine list. Some weeks, they’ll also taste up to 100 wines.

“The wine list probably takes up 30 percent of my time, and that’s the big investment here, albeit for some nice rewards,” Zanitsch says. 

Develop more ambitious cocktails

At El Chile in Austin, Texas, the cocktail menu hadn’t been revamped in about five years—and it looked that way.

“The names and ingredients didn’t seem handmade, and that wasn’t the feeling we wanted to give,” says Bryan Gonzales, who oversees marketing for the five-concept El Chile Restaurant Group. So Gonzales revived El Chile’s cocktail menu, crafting a reimagined menu utilizing housemade purées, hand-squeezed juices, and premium spirits, including local goods like Tito’s Vodka and Dripping Springs Gin. 

The elevated cocktail menu, tweaked quarterly, now includes drinks such as the La Guapa (pineapple habanero–infused el Jimador Reposado, St-Germain, and lime juice with a chile salt rim) and the Mezcal Mule (mezcal, housemade ginger beer, lime juice).

Gonzales purchased new bar equipment, including infusion jars and garnishing tools, as well as new glassware to signal that these libations were something new to the menu. Nevertheless, like The Fig Tree, the financial investment was secondary to the time spent developing the cocktail recipes and the hands-on training of staff.

“But it’s all been worth it as people crave our cocktails today,” Gonzales says.

Bar Management, Feature, Finance