Bars Add a Twist of AI for Better Beverage Inventory Control

Software companies are using artificial intelligence and machine learning algorithms to simplify and automate the beverage inventory process for bars and restaurants. The new apps make inventory fast, easy, and more accurate, cutting labor and operational costs in the process.


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Image credit: Backbar

Operating a bar goes beyond having a well-stocked front room and keeping the booze flowing. Bars owners face the challenges of creating an inviting atmosphere and scheduling special events to lure in customers. At the same time, they deal with high employee turnover and thus frequent training, plus hard-to-measure issues, like large pours, spills, broken bottles, and theft. On average, bars see about 23 percent shrinkage—that’s nearly one in four drinks lost.

Bar owners with accurate par levels—the minimum amount of a product needed to meet customer demand—sit in the sweet spot of having enough, but not too much, stock on hand. Bars operate on thin margins, so having precise inventory can save owners hundreds if not thousands of dollars every month. Luckily, artificial intelligence is hitting the bars, and it’s bringing data analytics with it.


Inventory Automation

Chicago-based Backbar developed a cloud-based software platform that allows bars (and restaurants) to take and manage inventory more effectively. Gone are the paper and pen tallies that are later entered into a spreadsheet. The Backbar inventory system is presented via tablet or mobile phone, and the app remembers the order in which items are inventoried. After the initial inventory, users can choose to sort items according to placement in the bar or alphabetically. User can also view by location (bar, cooler, storage) or type—wine, beer, or spirits—making the app easier and faster to use. In addition, Backbar can auto-populate if the owner has a second location, and track usage separately.

Backbar ties to the bar’s point-of-sale and ordering systems, providing owners with data-based analysis of what’s flowing. Backbar compares sales to purchases, calculating usage rates and highlighting excess inventory, so owners know exactly where they are making money (or losing) money. All the data is available on the dashboard, and owners can drill down for specifics.

Operators can place orders directly from the app or print out a purchase order. The software detects improper quantities—do you really want to order 1,000 bottles of vodka?—and a pop-up asks for confirmation. If it is confirmed, a notification is sent to the owner as a secondary check. The dashboard also tracks customer purchase trends and money spent with suppliers, so owners can optimize profits.

Backbar includes an automated price calculator, so owners can adjust pour cost, profit, and prices to boost revenue. Other features include beverage tasting notes, a recipe builder that allows users to tweak ingredients, a place for staff messages and notes, and color-coded inventory IDs that indicate which employees took inventory and when.

Raising the Bar

Other apps tackle inventory visually. Partender allows users to tap on an image of the bottle, drag a line to indicate what remains in the bottle, and swipe to the next bottle. Users can select images of bottles in various sizes and adjust the fill line to match what’s on the shelf. Partender takes the guesswork out of inventory, which typically requires users to mentally divide a bottle into tenths and estimate what’s left.

In addition, Partender mines the data to determine which products are selling, which ones can be replaced, and whether a promotion or special event increased sales. It identifies when shrink occurs and notes which bartenders are working then. The software also provides trend data, establishes par levels, and helps owners develop better purchase programs with distributors.

Four mobile phone screens showing bar info data

Image credit: Partender

The software-as-a-service solution allows owners to take inventory in 15 minutes with 99.2 percent accuracy. When the Georgetown Marriott launched Partender, par levels were more accurate and beverage costs dropped 25 percent. Because inventory can be completed so quickly, the hotel started doing it twice a week, further improving inventory data and saving associated labor costs.

These cloud-based systems reduce the time and labor required to take inventory. They give bar owners a better grasp of what they have on hand, reduce product loss, and cut labor costs. I’ll drink to that.

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