Many bars and restaurants offer discounts in the form of happy hour or themed nightly specials — Taco Tuesdays, Wine Down Wednesdays — in order to attract more patrons and hope they eat, drink, return and tell their friends.
But a handful of local bars are taking discounts a step further by offering some high-end bottles and beers at cost — basically charging the customer what the bar pays for the product. The break-even promotions draw in a crowd, but at what cost?
Insider talked with a few bar managers who are trying or have tried the concept, and it seems the end results — expanding palates, pleasing customers — is somewhat worth the loss of profit.
Clay Livingston, beverage director at Red Herring Cocktail Lounge & Kitchen, says they’ve been offering break-even bottles shortly after they opened last year. He explains it was designed to bring in new guests looking to try spirits they normally wouldn’t be able to afford.
“This is a program that keeps people coming back to try the new bottle and then stay and get a bite to eat and have a few other drinks,” says Livingston. “For us, we don’t have expensive bottles sitting, collecting dust, waiting for a high-roller to enter and choose to pay full price, so it allows us to move the inventory quickly.”
Red Herring has offered the discounts on top-shelf bourbons and also a 21-year-old cognac, a 10-year-old tequila and even a 25-year-old rum, among others, allowing patrons to branch out and try other products. Currently, they’re offering the discount on Redbreast Lustau Sherry Barrel Finish (whiskey), Old Medley 12 Year Single Barrel (bourbon), and El Tesoro 75th Anniversary Release (tequila).
Livingston says so far, the pros are outweighing the cons.
“This has been a very successful program for us in the way we execute it, so yes, we will continue it as long as we have bottles available to do so,” he adds.
Josh Jones, general manager at Mr. Lee’s Lounge, also believes the break-even specials work, even though the Germantown/Schnitzelburg bar has only done them twice. Their “Break-Even Sundays” began July 22 with a bottle of the hard-to-find William Heavenhill 14 Year Bourbon, for a low, low price of $6.75 a pour.
If your everyday bourbon bar happened to have this bottle on its shelf, a pour might set you back anywhere from $20-$50.
Jones says the specials run on Sunday because it’s one of the bar’s slower days, and it gives him the chance to spend more time with each guest talking about the break-even spirit or even just spirits in general.
“We run the stigma at our bar of being expensive,” he explains. “It isn’t because we choose to charge more, it is because we use quality spirits that come at a cost. It is on us to explain this to folks and really walk them through the quality of not only the spirits, but how they blend to make different experiences.”
He says as word spreads about the discounts, more and more people come through the door to check it out. The biggest pro, he believes, is building community.
“We have service industry pros along with Sunday bar patrons trying the same spirit,” says Jones. “It is an opportunity for everyone to really taste something they may not have been able to afford otherwise. It leads to discussion and for people to really get to know the spirit.”
The second time Mr. Lee’s offered the promotion, it was on a bottle of Willett 14 Year Family Reserve Single Barrel for just $4.15 an ounce. That one went fast, too, and Jones says the bar will offer more than just bourbon as well. In fact, the month of August will be “Agave August,” with break-even discounts on bottles of high-end tequila.
Like Red Herring, Mr. Lee’s plans on continuing the deal each Sunday for the foreseeable future.
“Our patrons have been very happy so far,” says Jones. “We are hoping to draw some people who have never been in, but really, we love to have folks come back week after week to try the new stuff. Again, it is like a continuing education — for ourselves and our guests.”
One restaurateur who tried the promotion had mixed results. Griffin Paulin, owner of Mirin, tried the at-cost experiment for most of June, and he says it didn’t go as well as he had hoped.
Mirin is more of a restaurant than a bar and only serves beer, wine and sake, but Paulin believed by selling all of his adult-beverage inventory at cost, plus a penny, he’d attract more customers.
“The idea behind doing this, for us, was pretty simple. As a quick-service restaurant, we don’t sell that much alcohol in the first place,” he explains. “We don’t have a bar, which eliminates the need for an actual bartender or any additional staff. So after really diving into the numbers, we could have continued to sell alcohol at cost, plus a penny, if it brought in an extra 6.4 customers for food per day.”
Paulin says it was a chance he was willing to take, but unfortunately, it didn’t draw in an extra crowd.
“We saw no uptick in traffic until the last three days of the month,” he says.
There was a silver lining, however, and Paulin isn’t going to rule out another try.
“Most people don’t really understand sake, and we were able to convince more people to try it,” he says. “We were able to get people interested in a product that has a weird stigma around it, as most people’s experience with sake has been ‘We had hot sake at *insert sushi joint here* for like $4.’ Sake is a really diverse product, there are many different styles.”
Mirin carries 27 brands of sake in seven styles, so the discounted prices allowed people to taste a handful at a time.
“We’ve seen a huge uptick in Nigori sales since June, and more and more of our regulars are becoming more educated and experienced with sake,” says Paulin. “We were also able to show people that, like, hey, this stuff isn’t a rip-off. We’re already offering it at absurd prices. Most restaurants will mark wine up 300 percent and nobody bats an eye, but with us selling sake for $15 for a 375ml bottle of premium stuff, we still saw it was a sticker shock for people.”
In the end, however, Paulin says he did lose money on the promotion.
“While we had some success erasing the ‘Asian products are supposed to be cheap’ stigma, we realized we were fighting a losing battle, which was disheartening,” he says.
He won’t rule out offering break-even discounts in the future, as the restaurant often runs unique specials in general.
“I have a really, really great kitchen staff, so the more people we can get in the door so I can showcase how great my dudes are and give them a memorable, relaxed dining experience, the better,” says Paulin. “We consistently try to break the mold of how a restaurant should operate, because frankly, the old model just doesn’t have a high success rate anymore. Sometimes my dumb ideas work, sometimes they don’t. The jury is still out on this one, so maybe we will try it again.”