Menu engineering for a cocktail list
Menu engineering sets what each drink sold against what each drink earned. Take a period's sales by item from the till, cost every item ex-tax and per serve, and classify each line by two things — its share of the drinks sold and its contribution per unit (ex-tax price less cost). High on both is a star; popular but low-earning is a plowhorse; high-earning but slow is a puzzle; low on both is a dog. The re-price list, the re-cut list and the new list's target GP all come from that matrix, and the work is worth repeating monthly because the mix moves even when the recipes don't.
A costed list tells you what each drink should earn. Menu engineering tells you what the list did earn, and it is the difference between the two that pays for the exercise.
Two numbers per line
For every drink on the list over a period — a month is right — you need two figures:
- Popularity: the number sold, as a share of all drinks sold in that section.
- Contribution: the ex-tax price less the cost per serve, in dollars.
The first comes from the till report. The second comes from the costing. Neither is any use without the other: a list costed to a beautiful theoretical GP can still miss its number if the wrong drinks are the ones moving.
Four classes
Set each line’s popularity against the section’s average share, and its contribution against the section’s average contribution. Every drink lands in one of four boxes — the Kasavana–Smith matrix, which is older than most of the people using it and still right.
| Class | Sells | Earns | What to do |
|---|---|---|---|
| Star | above average | above average | Protect it. Keep the spec tight, keep it on the page, never let it go out of stock. |
| Plowhorse | above average | below average | Re-price, re-spec to a cheaper build, or reposition. Rarely cut. |
| Puzzle | below average | above average | Sell it: placement, a better name, a description, a bartender’s recommendation. |
| Dog | below average | below average | Cut it, or rebuild it into something else. |
Only drinks that actually sold are classified. A drink with zero sales is not a dog; it is a question about the menu.
Contribution, not percentage
The instinct is to rank drinks by GP percentage. Resist it. A $14 highball at 80% GP puts $10 or so in the till per drink; a $26 cocktail at 70% puts $16 in. The second drink is the better business even though its percentage is worse. The matrix uses contribution per unit for exactly this reason: the bank takes dollars.
This also explains why a list’s headline GP moves when nothing on it changed. Sell more highballs and fewer cocktails in a hot month and the money-weighted GP falls, even with every recipe intact. The fix is in the mix, not the recipes.
Re-pricing to a target
Once the matrix is on the table, a target GP for the section gives you the re-price list. For each line you want to keep, the price that reaches the target is a simple derivation from the cost and the tax rate — and it is a starting point, because a price is also a signal to the guest. Round to what the room expects; move a plowhorse up a dollar rather than three; leave a star alone if it is already where it should be.
The re-cut list is the dogs, plus any puzzle you have tried to sell for two months without moving. Costed, so the owner can see what the cut is worth.
A period is a snapshot
When you save a period, save the money as it stood: the costs, the prices, the tax rate that month. Reopen March in September and it should show March, not March’s drinks at September’s prices. Deluge keeps each saved period’s figures frozen for this reason, and re-costing an old period at today’s prices is a deliberate, labelled act. Comparing two periods — with the fifteen biggest movers named — is how you find the drink that quietly became a dog after a supplier price rise.
The monthly rhythm
Till report in, engineering report out, one hour with the owner. That is the whole cadence. It is the piece of consultancy work venues keep asking for after the first run, because the report is always slightly surprising, and the surprise is where the money is.