BEVERAGE PURCHASING

CONTROL
CONTROL PROCESS AND
PURCHASING
In chapter 2, control was define as a process
used by manager to direct, regulate, and restrain
the actions of people so that the established goals
of an enterprise may be achieved. The control
process was described as having four steps:
establishing standards and standard procedures,
training staff to follow those standards and
standard procedures, monitoring staff performance
and comparing it with established standards, and
taking remedial actions as needed. Previous
chapters illustrated the application of this process
to the significant phases of foodservice operations:
Purchasing receiving, storing , issuing,
producing, and sales. In this part of the text,
the process is applied to these phases of
beverage operations. As with the chapters
on food control, the beverage chapters will
not discuss training. This topic is left to the
section on labor control. This chapter
focuses on the application of the control
process to beverage purchasing.
ALCOHOLIC BEVERAGES
Alcoholic beverages, obviously, are those
that contain alcohol. They contain one
particular type of alcohol, which is produced
naturally in the process of making alcoholic
beverages. Other types of alcohol are
unsuitable for human consumption. The
amount of alcohol contained in alcoholic
beverages varies considerably from one to
another. Some have a very small
percentage, as little as 0.5 percent. Most
have substantially more.
 There are three classifications of alcoholic
beverages: beers, wines, and spirits. These are
substantially different from one another, and
anyone planning a career in food and beverage
management should be able to both describe
them and identify their differences. A full
account of the history, production techniques,
and various types of beers, wines, and spirits is
not possible in this text. Student are advised to
consult any one of a large number of books and
other publications on these subjects for further
information. The following description of each is
intended to point out the
Differences among them, to motivate
students to further investigation, and to
explain why control procedures for each
may vary.
BEERS
Are beverages produced by the
fermentation of malted grain, flavored
with hops. The grain used is usually
barley, but also can be rice, wheat, or
corn. Malted grain is grain that has been
mashed and then steeped in water. Hops
are the dried blossoms of the hop vine
and are used to impart the typical bitter
flavor to beer and contribute natural
substances that help prevent bacteria
from spoiling beer.
Hops may be either domestic or imported;
imported hops are commonly considered
superior to domestic.
The process of brewing beer
Although there are slight variations from one
brewer to another, the following is the
general process of brewing beer:
1. Malting- the grain is mashed and steeped
in water for several days until it begins to
germinate. During this process, the grain is
converted into a type of sugar called
maltose.
The resulting substance is called a malt.
2. The malt is heated and dried (called
kilning). The malt may be further roasted
to produce a darker beer with different
taste.
3. The dried malt is processed and
transferred to a container called mash
turn, where hot water is added. The malt
steeps in the liquid for about two hours,
and this results in a liquid called wort.
4. The wort is transferred to a brewing
kettle where it is boiled. Hops are added.
5. The wort is cooled and strained to make a
liquid free of hop leaves and residue. The
liquid is transferred to a fermenting tank.
6. Yeast is added, and the liquid ferments
for up to two weeks. Fermentation is a
natural process resulting from the addition of
brewer’s yeast to the wort. During
fermentation, the starches in the liquid are
converted to sugars. These sugars, in turn,
are converted to carbon dioxide and alcohol.
The carbon dioxide is dispersed and the
alcohol remains. When the yeast is
consumed, the liquid becomes beer.
7. The beer is transferred to an airtight
container, called a conditioning tank,
where a second fermentation occurs and
the beer matures and develops. This
aging process can last up to two months.
During this process, it becomes naturally
carbonated. Some brewers add carbon
dioxide gas into the beer to give it more
of a bubbly quality.
8. After aging, the beer will be filtered to
remove any cloudiness. The beer is then
bottled, canned, or put into kegs.
If the beer is bottled or canned it is then
pasteurized to kill any bacteria that might
be remaining. This process extends shelf
life. If it is to be put into kegs for draught
beer. It is not pasteurized, but is cooled
to prevent from multiplying and injuring
the beer. Draught beer has a very limited
shelf life, So it must be kept cool during
the transfer of the kegs to retailers and
during storage at the retailer.
TYPES OF BEERS
Although the term beer suggests that all
products so named are much the same, this
is not the case. Beers are normally divided
into two broad classifications: lager beers
and ales. The yeast used in processing and
the processing method determine weather
the beer is to be a lager beer or an ale.
There are two types of yeast used in making
beer, lager yeast (bottom-fermenting yeast)
and ale yeast (top fermenting yeast).
LAGER BEER
Lager beer, the type most commonly
consumed in the united states, is a
category that includes the popular brands
of regular and light beer-Budweiser,
Miller, Coors, and many others. The
major producers of lager make beer that
is generally lighter, drier, crisper, and less
bitter than ale, although this does not hold
true for all lagers. Other names applied to
lager beer are Pilsner, golden lager;
Bock beer, a full-bodied darker beer with
an alcoholic content by volume up to 8
percent; ice beer, made by lowering the
temperature of the beer below freezing
and then filtering out the ice crystals that
form; light beer, a popular beer with fewer
calories and alcohol; Japanese beers such
as asahi, Kirin, Sapporo, and Suntory,
made from rice and corn; and malt liquors,
which are also classified as lager beers.
Nonalcoholic beers are produced in much
the same way as regular beer, but most of
the alcohol is removed.
ALES
Ales are not as popular in the united
states as lager beer. Names associated
with ales include porter and stout, more
popular in the united kingdom. These are
dark, dense ales, close to black in color.
Other ales found primarily in England
include mild ale, bitter ale, pale ale, and
brown ale. The names of these ales
describe their characteristics.
WINES
Wines are beverages normally
produced by the fermentation of grapes,
although various other fruits (such as
apples, pears, berries) and one grain
(rice) are fermented to produce
comparatively small quantities of wine.
WINE MAKING
The fermentation process for wine
differs considerably from beers.
1. In the traditional method of wine
making, grapes are crushed and then
placed in tank, where the yeasts occurring
naturally on the grapes begin the
fermentation process.
2. If the wine is to be white, the skins of
the grapes are removed. If it is to be a red
wine, the skins are left during
fermentation.
3. The sugars and the crushed grape mixture are
converted to carbon dioxide and alcohol. Left
unchecked, this conversion will continue until all of the
sugar is converted or the level of alcohol reaches
14% at which point the yeast is killed by the alcohol
and the process cease. Grapes contain varying
amounts of natural sugar, depending on the type of
grape and the degree of ripeness when picked.
Grapes with less natural sugar produce wines that are
not as sweet as those with more natural sugar. The
difference has to do with the amount of sugar, if any
that remains in the mixture when the yeast are killed.
If sugar remains unprocessed in the resulting wine,
the flavor will have a certain sweetness to it. If no
sugar remains, the wine will be designated as dry, a
term used to describe wines that lack sweetness.
 4. when fermentation ends, the resulting
liquids is drawn off and stored in fresh
wood casks. During the time it is stored,
any residue will settle in the casks, so the
new wine will be clear.
5. When the wine have “cleared” sufficiently,
they are removed from the wood casks
and placed in other containers to mature.
The nature of these containers and the
length of time required to reach maturity
vary from one wine to another.
6. When the new wine is mature, it is
filtered and then bottled. Once bottled, the
wine is either shipped for immediate
consumption or stored under carefully
controlled conditions (or aged) for a period
of time. The type of wine produced will
determine whether it is shipped or aged
and if aged, the length of time appropriate
for aging.
SAKE WINE – sake is a rice wine that has a
higher alcohol content than traditional
wines. This is because sake brewing
combines the two chemicals steps of
converting the rice to sugar and sugar to
alcohol simultaneously. The process of
brewing sake is much more precise than
other wines, and the brewing temperature
must be exact in order to achieve the
desired result. Some brewers will fortify
their sake to make the alcoholic content
higher.
the preceding is an oversimplified description
of he methods of making wine, used today
primarily by those wineries producing high-
quality expensive wines. It should be noted
that some makers, typically those producing
large quantity of inexpensive wines for mass
markets, use modern adaptations of
traditional methods, such as producing wines
in vast stored tanks rather than individual
wood casks. Some pasteurize their wines, a
process the traditional winemaker would
never consider.
CLASSIFICATION OF WINE
Wines are normally classified as red,
white, or rose. The color of a wine is
determined by the variety of grape used and
the manner in which it is processed. Red
wines tend to be drier than white wines and
range from hearty and full-bodied to light and
fruity. In contrast, white wines tend to be
lighter-bodied than reds and range from very
dry to very sweet. Red wines, normally
served at room temperature, the often
considered better accompaniments to red
meat, whereas white wines, typically served
chilled, more commonly accompany fish,
poultry, and veal.
Rose wines, usually served chilled, may be
used to accompany any entrée. These are
general rules, commonly quoted in texts and
practiced by a number of wine connoisseurs.
Today, however, most agree that individuals
should follow their own tastes, and it is not un
common to see restaurant customers
ordering white wines to accompany beef.
The color classifications discussed here
are not the only means for identifying wines.
The four terms in the following list are
commonly used as will:
1. Varietal. A varietal wine is one named for
the variety of grape that predominates the
wine. Chardonnay, Zinfandel, Cabernet
Sauvignon, and Pinot Noir, for example, are
varieties of grapes that lend their names to
wines-varietal wines.
2. Band name. a brand-name wine is one
known primarily by the name of the
producer. Many winemakers produce wines
under their own names. Some are superior,
whereas others are less so. These are
normally blended wines, carefully produced
so that their characteristics are the same
from bottle to bottle, year after year. Lancers
Vin Rose is an excellent examples.
3. Geographic. A geographic wine is one
named for its place of origin. Many wines
are named for the specific locations where
they are produced. The location may be as
large as a region or a district, or it may be as
small as a particular vineyard, known in
France as a chateau. Producers are
normally required to follow standards and
regulations established by some authority,
usually a governmental agency, to ensure
that the wine named for the area has
identifiable and presumably desirable
characteristics ,given the climate and soil in
the region.
 Examples of geographic wines are chateau
Margaux from the vineyard of the same name
and Chianti, which is from the Chianti region of
Tuscany, Italy.
4. Generic. A generic wine is named for a will-
known wine-producing region, but is not
produced in that region. Generic wines take their
names from geographic areas, most commonly in
France or Italy. Generic wines attempt to
replicate the characteristics of the better known
geographic wines after which they are named.
For example, some wines produced in California
are known as burgundy, a name borrowed from
the Burgundy region of France.
A generic wine may be excellent, very poor, or
anything in between. One must taste the wine
to determine its quality.
There are several types of wines and
wine-based beverages with characteristics that
are sufficiently different to warrant separate
discussion:
 Sparkling wine are carbonated. The
carbonation may be natural or artificial, and
the wines may be red, white, or rose.
Champagne, Spumante, and sparkling burgundy
are well-known examples of sparkling wines.

Fortified wines are wines to which small

quantities of brandy or spirits have been added
to increase the alcoholic content. Port and
sherry are the two best-known examples.

Wine coolers are blends of wine and fruit juice.

Consequently, wine coolers have comparatively
low alcoholic content-commonly about 5
percent. With the growing trend to lighter drinks,
wine coolers have become increasingly popular.
Blush Wines are characterized by their
slightly pinkish color. They are
comparatively new to the market. One
way to make blush wines is to
ferment red and white grapes
together to produce a wine similar in
appearance to a rose. Blush wines
tend to be light-bodied and sweet.
Spirits are alcoholic beverages produced by
the distillation of a fermented liquid. The
fermented liquid may be made from grain,
fruit, or several other food products,
including sugarcane and potatoes. A
complete list of the possibilities would be
almost endless. Most spirits, however, are
produced from the aforementioned food
products. 13. 1 lists some of the major
alcoholic beverages produced by
distillation and the primary food
ingredients used to produce them.
Distillation is the process by which alcohol
is removed from a fermented liquid. The
process takes place in a device known as
aFigure
still.
13.1
Primary Ingredients in Distilled Beverages

Distilled Beverages Primary Ingredients

Bourbon Corn
Brandy Grapes
Gin Any grain
Rum, Dark Molasses
Rum, Light Sugarcane
Rye Rye
Scotch Barley
Vodka Potatoes; any grain
 The alcoholic content of a distillate is
stated in terms of proof. In the United
States, proof is measured on a scale from
0 to 200, with a 0 being the complete
absence of alcohol and 200 being pure
alcohol.
a particularly interesting group of spirits
is that known as liqueurs, or cordials.
Liqueurs are spirits, that have been
sweetend and combined with flavoring
agents.
Nonalcoholic Beverages

Nonalcoholic beverages include those

normally found listed in restaurant menus
under the “beverage” category: coffee, tea,
and milk, as a host of others, some
carbonated and some not. Carbonated
nonalcoholic beverages include seltzer,
club soda, tonic, ginger ale, and a wide
range of other flavored beverages known
as soda or pop in various place.
Beverage Purchasing
As with food purchasing, it is important to implement
beverage purchasing controls.
Three primary purposes of beverage purchasing
controls:
1. To maintain an appropriate supply of ingredients
for producing beverages products
2. To ensure that the quality of ingredients purchased
is appropriate for their intended use
3. to ensure that ingredients are purchased at
optimum prices
As always, the key to successful control is to establish
suitable standards and standard procedures. The
starting point is to determine who is responsible for
beverage purchasing
Responsibility for Beverage Purchasing
The nature and size of an operation often
dictate who is responsible for purchasing
beverages. In small, owner-operated
establishments, the responsibility is
normally that of the owner. In others, it
may be that of the manager. In some large
operations, purchasing responsibility may
be delegated to a purchasing agent, a
steward, or a beverage manager.
Establishing Standards for Beverages
Purchasing
For beverage purchasing, standards must be
developed for the ff:
1. Quality
2. Quantity
3. Price
Quality Standards- alcohol beverages purchased
for bars may be divided into two classes accdg to
use: call brands and pouring brands.
Call brand- is one used only if the specific brand is
requested by a customer
Pouring brand- is one used whenever does not
specify a call brand.
Quantity standards-because beverages products
are not highly perishable foods. Canned and
bottled beers should be used within approx. three
months of packaging.
8 Principal Factors used to Establish Quantity
Standards for Beverages Purchasing
1. Frequency with w/c management chooses to
place orders
2. Storage space available
3. Funds available for inventory purchases
4. Delivery schedules set by purveyors
5. Minimum order requirements set by purveyors
6. Price discounts for volume orders
7. Price specials available
8. Limited availability of some items
Price Standards
After the quality standards are established and
appropriate purchase are known, the next step is
to ensure that all beverage purchases are made at
the optimum price.
2 groups of laws according to states
1. License states-beverage wholesalers
(sometimes manufacturers and distributors as
well) are permitted to sell alcoholic beverages
directly to hotels, restaurants and similar
operations
2. Control states- state gov’t actually sells some or
all alcoholic beverages through its own network
of stores (or those that are franchised by the
state),thus having a complete control over prices.
Establishing Standard Procedures for Beverage Purchasing
After standards for purchasing beverages, next step is to
establish standard procedures.
2 things needed to do in standard procedures
1. To determine order quantities
2. To process orders
Determining Order Quantities: Basic Methods
2 basic methods
1.Periodic order method-based on fixed order dates or variable
order quantities
-requires that order dates be fixed so that there are equal
operating periods b/w order dates.
2.Perpetual order method-uses variable order dates and fixed
reorder quantities
-requires fixed purchase quantities and variable order dates
Fig 13.2. Shelf Label
ITEM Gordon’s Vodka
Size 750 ml
Par Stock 36 (3 cases)
Anticipated usage 24 (2 cases)

Par stock-maximum quantity of the item that should be on hand at a given

time

Standard procedure to determine the correct purchase quantity

1. Count the inventory (number of units in the shelf)
2. Subtract the inventory from the par stock figure on the shelf label
3. Obtain the purchase quantity, which is the result of the previous
subtraction

Example: Refer to Fig 13.2

If there were 8 bottles of Gordon’ Vodka on the shelf, subtract to par stock
value
Par stock 36
- Current inventory 8
= Purchase quantity 28
If the actual usage is the same as the usage figure on the label,
the purchase quantity determined in this manner will be the
same as the usage figure. If the subtraction results in a
purchase quantity that is substantially different from the usage
figure on the label, that is the signal that the figures on the
shelf label must be reviewed for possible change. For
example, if one finds 22 units of vodka on the shelf, the order
quantity would appear to be 14. However the fact that there
are 22 units in the shelf means that the usage has been
considerably less than anticipated; thus, one should assess
the need for a par stock of 36. Unless the decrease in the
number of units consumed is a temporary phenomenon, par
stock and usage figures on the label should be change for
future periods. In general, if the number of units in inventory
on a given order date differs markedly from the difference
between par stock and usage, the adequacy of these two
figures for purchasing purposes must be reviewed.
Reorder point- is the number of units to w/c
inventory should decrease before an
order is placed.
Reorder quantity- the amount should be
ordered each time an order is placed.
Calculated by subtracting the reorder point
from par stock and adding the number of
units consumed between order date and
delivery date.
Fig 13.3 Perpetual Inventory Card
Item Gordon’s Gin Par stock 32
Size 750 ml Reorder Point 14
Reorder Quantity 24
Date Order # Quantity In Out Out Balance
31-Aug 32
1-Sep 2 30
2-Sep 3 27
3-Sep 2 1 24
4-Sep 2 1 21
5-Sep 3 18
6-Sep 4 14
7-Sep #8 24 2 12
8-Sep 3 1 8
9-Sep 2 6
10-Sep 24 3 27
11-Sep 2 25
12-Sep 3 22
Fig 13.3 indicates hat this gin is consumed at a rate
of the approx. 3 bottles per day. Management has
determined that orders are to be placed at approx
one-week intervals, and experience has shown
that it takes 3 days to obtain delivery. Par stock is
calculated as follows.
3 bottles per day x 7 days x 150% (to include a
safety factor)= 31.5 bottles
This is rounded to 32 bottles. Reorder point is
determined by multiplying the number of units
used in 3 days required for delivery (9) by 150
percent to include a safety factor-9x1.5=13.5,
rounded to 14 bottles. Reorder quantity is
determined by subtracting reorder point from par
stock and then adding the number of units used in
the three day period before receiving delivery
Reorder Quantity is calculated as:
Par stock 32 bottles
- Reorder point 14
Total 18
= Units used in 3-day period 9
Reorder quantity 27 rounded to 24, or 2 cases
This number leaves a six-bottle safety factor
The standard procedures suggested here for determining order
quantities assume that supplies of the needed items are readily
available. Although this is normally true for all mixers, most spirits
and beers, and many wines.
Determining Order Quantities: Using a computer Program
Computer users sometimes use generic spreadsheet or database
programs to record inventory values and determine order quantities.
However, many managers interested in using computers today are
incline to adopt one of the growing number of programs specifically
written for beverage purchasing and inventory control.
1. Allow easy input of purchases and issues so that
accurate records can be kept without the need to
handwrite the information on receiving sheets and
issue requisitions.
2. More easy provide an accurate inventory of liquor by
keeping cumulative totals of liquor inventory in
memory. Handwritten inventory cards are no longer
needed.
3. Provide for easy inventory taking. Some programs
allow full and partially empty bottles to be scanned,
and then they automatically calculate inventory
levels. Others keep inventory current by adjusting
inventory as liquor is poured at the bar
4. Provide management with daily reports showing
purchase, usage, and cost information. Manual
calculation for liquor cost and cost percentage age is
5. Allow management to more easily
determine where liquor shortage is
occurring. Some programs keep track of
the usage of each brand of liquor as drinks
are prepared. This allows management to
compare the amount of liquor that should
be used in drink preparation with actual
usage of each brand.
Processing Orders

Whenever practical, it is advisable to establish

a purchasing routine that requires formal
written purchase orders. In most large hotels
and many large restaurants, formal purchase
request serve as the basis for ordering. In
large hotel, the purchasing routine may be
the following. A wine steward, as the person
in charge of maintaining the beverage
inventory and stockroom, prepares a
purchase request, similar to that figure 13.5
after the first of the month.
Figure 13.5
Quantity Item Bottle size Purchase unit Supplier
3 Jim Beam 1.75 L Case A&C
Bourbon Suppliers
2 Beefeater 750ml Case A&C
Suppliers
Requested by_____ Approved By________
Date______ Date_______

Figure 13.6
Henry Hilson Hotel Date____
New York, Ny Order No.____

To: A&C Suppliers

907 West 38th st.
New York, NY 10090

Please ship the supplies listed below via: your truck

Quantity Purchase Bottle size Item Unit price Total
Figure 13.6
Henry Hilson Hotel Date____
New York, Ny Order No.____

To: A&C Suppliers

907 West 38th st.
New York, NY 10090

Please ship the supplies listed below via: your truck

Quantity Purchase Bottle size Item Unit price Total
unit amount
3 Case 1.75 Jim Beam Bourbon $155.40 $466.20

2 Case 750 ml Gordon’s London Dry $128.40 $256.80

Total $723

Ordered By H.
Morgan
Record of purchases, preferably on a
purchase order, to verify the accuracy of
deliveries received. Written purchase
orders eliminate disputes over brands and
quantities ordered, prices quoted, and
delivery dates. Because the purchase of
alcoholic beverages involves the outlay of
consedirable amounts of cash, it is wise to
establish a system (the purchase order
method or some other) to reduce or
eliminate the possibilities for error.
Thank You!