PURCHASING, RECEIVING, STORING, ISSUING OF BEVERAGES
Purchasing of beverages
Purchasing is the activity of acquiring goods or services to accomplish the goals of an organization.
Several organizations attempt to set standards in the purchasing process, however, the process varies greatly between organizations. Purchasing is not just procuring the items, it involves the search,
selection, purchase, receipt, storage and final use of a commodity in accordance with the policy of the
establishment
Objectives of purchasing
1. Maintain the quality and value of a company's products,
2. Minimize cash tied-up in inventory,
3. Maintain the flow of inputs to maintain the flow of outputs,
4. Strengthen the organization's competitive position.
Purchasing may also involve:
1. development and review of the product specifications,
2. receipt and processing of requisitions,
3. advertising for bids,
4. bid evaluation,
5. award of supply contracts,
6. inspection of good received, and
7. their appropriate storage and release
Purchasing management
Purchasing management directs the flow of goods and services in a company and handles all data
relating to contact with suppliers. Effective purchasing management requires knowledge of the supply
chain, business and tax laws, invoice and inventory procedures, and transportation and logistics issues.
Although a strong knowledge of the products and services to be purchased is essential, purchasing
management professionals must also be able to plan, execute, and oversee purchasing strategies that
are conducive to company profitability.
Sourcing reliable suppliers is a crucial part of purchasing management. Purchasing managers, agents,
and buyers usually learn about new products and services from Internet searches, trade shows, and
conferences. Purchasing management professionals must be good negotiators, understand technical
product information, have good mathematical ability, understand spreadsheet software, understand
marketing methodology, and be outstanding decision makers.
It must be ascertained that potential suppliers have the ability to supply quality merchandise at a
suitable price on time
Purchasing Beverages
Purchasing of alcoholic beverages requires knowledge of spirits and wines. A purchasing agent should be
well informed about types of wines, vintages, and the appropriate marriage of wines and foods in order
to construct a well-developed wine list.
Maintaining an adequate inventory is the most important factor of profitable beverage purchasing.
Stock levels must be kept as low as possible while still providing sufficient beverages to service
functions. The principal advantage of beverage purchasing is that beverage requirements can be
estimated well in advance of functions.
Sources of purchase
Wine shippers
Wholesalers
Beverage manufacturers
Auctions
Cash-and-carry
Wine shippers
These are firms that purchase wine from the country of origin and ship it to whatever country it is to be
sold. Most times they are only concerned with wines from particular regions, meaning that they will
have limited range of products. Also, the shipper may want to deal only with prestigious
establishments/large companies, and so the products of wine shippers are normally purchased from a
wine or spirit wholesaler.
Wholesalers
These are usually subsidiary wine companies of large breweries or independent wine companies.
Wholesalers offer a wide range of all beverages as well as regular delivery service to the customers. In
addition, they can assist with promotional materials/literature for both bar and restaurant sales.
Beverage manufacturers
This method of purchase is used when the purchase is sufficiently large. The purchasing manager deals
directly with the beverage manufacturer. This method is applied for the purchasing of the main spirits,
minerals and beers.
Beverages can also be purchased through auctions and cash-and-carry sources.
Purchase specifications
Purchaser cannot call the beverage supplier and order a case of drink. The supplier needs more
information -the type of drink, size of the case, pack of the case (number of bottles), and other information on the item. A purchase specification would include major information that would make the
jobs much easier and more efficient.
Alcoholic-beverage purchasing specifications include the following information:
1. Product name, with preferred brand names listed
2. Quantity to be purchased, such as litre, fifth, gallon
3. Indication of proof, such as 80% proof, 100% proof, or 175% proof
4. Unit by which prices are quoted, such as case, keg, or barrel
The purpose of purchase specification is to set down in black and white the standard of products to be
purchased for use in the establishment. The Purchase specification is a precise written statement of the
products’ characteristics required by a user. The purchasing manager uses this specification to inform
the suppliers of exactly what is needed. This specification is also vital to the receiving and cellar
department staff to know what to accept when delivery is being made.
Developing and using specifications
Written specifications accomplish the following objectives:
1. Communicate the characteristics of products and services needed for the operation, and help
eliminate misunderstanding between the buyer and seller
2. Provide the receiver with the product characteristics he or she needs to see before accepting
goods delivered to the operation
3. Help to ensure consistency in the items served by the operation by providing consistent product
4. Allow the operation to solicit bids from more than one supplier
5. Facilitate the training of purchasers, and allow other people to step in for the purchaser if the
need arises.
Specification
Specifications can vary greatly in length. Items with a recognized brand name, such as cans of Pepsi-
Cola, can have a specification as simple as the name, size of can, and number of cans in a case.
Specifications for items that do not have brand names, such as apples, require much more details in
order to be effective.
The contents of a specification
1. The intended use of the product or service
2. The specific, definitive name of the product
3. Packer's or producer’s brand name
4. Quality grades
5. Size or size range of the items needed
6. Package size
7. Preservation and/or processing method
8. Point of origin
9. Method of packing
Quantity Standards for Beverage Purchasing
1. Frequency with which 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
Brands to purchase
Many beverage purchasers have this fear that sales may be lost when a particular brand of beverage is
out of stock. Others see it as a matter of honour that no customer should ask for a particular beverage
and be told that it is not available. In as much as an outfit should strive to satisfy customers, it should
not be carried to such extremes as to overload inventories with unusual brands or types of liquor.
Adequate inventories are necessary, but liquor stock must move if maximum profit must be achieved.
Purchase orders
For reliability, it is very necessary for liquor purchase orders to be written rather than verbal. Such
purchase orders should require management approval as a way of avoiding excessive inventories.
Furthermore, a copy of this purchase order tells the receiving clerk what and how much he is to recive.
Verification of invoices
The beverage purchasing manager should personally approve invoices for purchases before payments
can be made, since he is the one that knows the terms of purchase, the brands and quantities ordered.
Purposes of Beverage Purchasing Controls
1. To maintain an appropriate supply of ingredients for producing beverage products.
2. To ensure that the quality of ingredients purchased is appropriate to intended use
3. To ensure that ingredients are purchased at optimum price.
RECEIVING OF BEVERAGES
Standard procedure for beverage receiving
1. Quantity of an item delivered must equal the quantity ordered
2. Quality of an item delivered must be the same as the quality ordered
3. Price on the invoice for each item delivered should be the same as the price quoted or listed when the order was placed.
The receiving staff will then ensure to:
1. Maintain an up-to-date file of all beverage orders placed
2. Remove the record of an order from the file when a delivery arrives and compare it to the
invoice presented by the delivery driver
3. Check brands, dates, or both, and count or weigh delivered goods Before the driver leaves
4. Compare the invoice to the order
5. Call to the attention of management and the delivery driver any broken or leaking containers
and any bottles with broken seals or missing labels
6. Note all discrepancies between delivered goods and the invoice on the invoice itself
7. Sign the original invoice and return it to the driver
8. Record the invoice on the beverage receiving report
9. Notify the person responsible for storing beverages that a delivery has been received
Importance of receiving
The entire purchasing system can fall apart if a receiver is not careful to check items properly when they
arrive from the supplier. Receiver must check three key factors for each item that arrives:
1. Quantity
2. Quality
3. Adherence to company specification
It is important in the receiving function to ensure that all that was ordered is received. A distributor
charges the foodservice operation for all items on the invoice. Non receipt of ordered items or receipt of
a quantity less than what is ordered can cause a significant problem if the discrepancy is not spotted at
the time of delivery so that it can be rectified.
Objectives of Receiving
1. The quantity of beverages delivered matches that which was ordered. This requires a methodical
approach to checking the goods against the purchase order and delivery note. Itema will normally be in standard units of crates, cases, etc., with standard contents of a specific size. Crates and cases should be opened to check for such things as empty, missing or broken bottles.
2. There should be quality inspection that requires a thorough and methodical approach. This will involve checking the brand name and label on each item, the alcohol proof, the vintage and shipper, against the delivery note and purchase order form.
3. The prices stated on the delivery note are in accordance with the negotiated prices shown on the purchase order form.
4. When the quality or quantity (or both) of beverages delivered is not in accordance with the purchase order, or an item is omitted from the order, that a Request for Credit note is raised by the receiving clerk or cellarman.
5. An accurate record is made in the Goods Received Book, recording details of the delivery.
6. An accurate record is kept of all chargeable empties delivered and returned.
7. Deliveries of beverages are timetabled with the suppliers to agree with times when the receiving staff are normally not so busy, and the receiving area is free from other deliveries.
Types of receiving
There are 2 types of receiving which are:-
Invoice receiving
A paper that list shipping information.
It has its own number and gives the name of the company, quantity, quality, price, total price per type
item shipped and total for the invoice.
Other information may be on the invoice. The invoice verifies the order.
The quantity, quality of the products delivered should be checked against the purchase order or other
receiving documents.
Blind check receiving
The method involved giving the clerk a blank invoice/purchase order listing the incoming merchandise
but omitting the quantity, quality, weights and prices.
The receiving clerk must insert these numbers into the order on the basis of a check of the delivery.
This invoice is checked against the one from the receiving clerk and the figures in both are verified.
Proper tools for the receiver
The person who does the receiving must be supplied with a number of tools in order to perform the job
properly.
The knowledge necessary
Scales
Unloading platform,
Table for inspection, & some tools
An adequate area in which to work
Specification Sheets
The time
A list of what was ordered
Receiving activity
1. Ensure that products delivered by suppliers are those that were ordered.
2. Verify that quality, size, and quantity meet the specifications
3. Ensure price on invoice agrees with purchase order.
4. Perishable goods are tagged or marked with the date received
5. Consistent and routine procedures are essential. Adequate controls should be exercised to preserve quality and prevent loss during delivery and receipt .
6.
Elements of Receiving Activity
1. Competent personnel should handle the receiving activity
2. Separate duties of purchasing and receiving.
3. For basic check-and- balance system, well trained employees should perform receiving tasks competently
4. Facilities and equipment need enough space to permit all incoming products to be inspected & checked.
5. Employee receiving order must know standards the supplies must meet
6. Critical controls in receiving procedures with regard to inspection and standards for acceptance necessary to prevent food borne illness
7. Receiving area designed for easy cleaning
8. Adequate supervision from management to ensure receiving procedures are being followed.
9. Suppliers should follow scheduled hours and deliver at specified times.
10. Move products immediately from receiving to storage
11. Do not allow delivery personnel in storage area
Inspection
Inspection against Purchase Order
Purchase Order is a written record of all orders. It includes brief description of the product, quantity and
price. Supplier ensures that products were actually ordered. He ensures correct quantities have been
delivered.
Inspection against the Invoice
Invoice is the supplier’s statement of what is being shipped and the expected payment. Invoice checks
quantity against purchase order. Electronic use of tabulator scales, bar coded cartons and packages, and
handheld scanner aid receiving.
Acceptance or Rejection of Orders
Delivered products become the property when the purchase order, specifications, and supplier’s invoice
are in agreement. Rejection at time of delivery is easier than returning products.
Completion of Received Records
Receiving record provides an accurate list of all deliveries of food and supplies, date of delivery
Supplier’s name, quantity, price data that provides a checkpoint in control system.
Receiving pitfalls
Packing merchandise in excessive moisture or wrapping in ice to make weighting more difficult
and add more weight.
Placing satisfactory merchandise on the top level that is visible, but inserting merchandise of inproper
quality underneath.
Repairing produce and putting a lighter in the new crate while keeping the price the same as for
the heavier original crates ( it is wise to spot check the weight of crates and cartons ).
Sending incomplete shipments with the full bill and neglecting to send the remainder.
Supplying short weights.
Removal to Storage
Products should be transferred immediately from receiving to the secure storage area. Marking
information about delivery date and price directly on the case, can, or bottle before it is placed into
storage. Tagging information such as date of receipt, name of supplier, brief description of product,
weight or count upon receipt, and place of storage are written on a tag
STORING AND ISSUING OF BEVERAGES
Storage of beverages is an important aspect of beverage operations. It is the responsibility of
management to see to the proper organization of the store. It is also important to see that it is only
essential supplies that are kept there, and that it is operated efficiently and competently by trustworthy
staff. It should be controlled as carefully as the cashier’s safe since the goods kept there are simply
another form of cash.
Storing and storing records
The size of a store room depends on the volume and nature of the establishment’s business, the
location and the purchasing policy. There will be no need for excessive storage space which may
encourage overbuying.
There is a relationship between the size of the inventory and usage. Overcrowded conditions in a store
room may be due to excessive inventories containing dead stock. It could also result from the use of
extensive wine list that contains slow moving beverages.
Storing records
These are records that aid the competent and efficient operation of the cellar. They are used in
documenting the operations of the store with regard to incoming and out-going stock. They include:
Cellar inwards book
This provides accurate record of all beverages coming into the cellar. The data for the cellerman’s bin
card is as well posted here. Cellar inward book is a useful check against the perpetual beverage
inventory ledger held in the food and beverage control/accounts office.
Bin cards
These are provided for each individual beverage held in stock. It records all deliveries and issues made,
and normally pinned on shelves against each beverage.
Cellar control books
This provides a record of all daily deliveries to the cellar and all daily issues from the cellar to the various
bars. This record should cross-check with the entries on the bin card and the perpetual inventory ledger
held in the food control/accounts office.
Beverages perpetual inventory ledger
This is a master ledger prepared in the control/accounts office. It consists of cards prepared for each
individual beverage held in stock. The purpose is to keep a daily record of any purchases of the separate
type of beverages and of the quantities issued from the cellar to each bar or to other areas, and to
record a perpetual balance for each of them.
The information on this ledger is obtained from the suppliers’ delivery notes or invoices, and the daily
beverage requisition notes from the different bars. During physical stock-taking in the cellar, the stocktake
figures should match those on the perpetual inventory ledger.
Ullages and breakages
Ullage is a term used to cover all substandard beverages such as bottles of weeping wine, bottles of
wine with faulty corks, unfit barrels of beer, etc.
It is necessary that ullages and breakages be recorded on a standard form together with an explanation,
and counter signed by a staff of the food and beverage control department.
Empties return book
Many of the containers of beverages such as crates, kegs, beer bottles, soda siphons, etc. are charged
for by the supplier against a delivery. It therefore necessary that a control is maintained on these
charged items to ensure that they are returned to the supplier, and the correct credit obtained.
A container record book is required to record all containers received from the various suppliers,
containers returned and the balance matching the stock-take of containers.
Hospitality book
This book records all issues of drinks to the kitchen and other grades of staff as laid down by company
policy.
Establishing Standards
1. To prevent pilferage
2. To ensure accessibility when needed
3. To preserve quality
Preventing Pilferage
To prevent pilferage, it is clearly necessary to make all beverage storage areas secure. To establish the
proper degree of security, access to storage areas must be restricted to authorized individuals, and steps
must be taken to guard against unauthorized use of beverages by those who are permitted access to the
storage areas.
Alcoholic beverages are among the items in hotels and restaurants that are most prone to theft by those
who are inclined to steal. Unless appropriate steps are taken, beverage products will disappear. There
are many reasons for this, including the money value of the products, addiction to alcohol, and
irresponsible, impulsive behaviour, among others.
Ensuring Accessibility
ensure accessibility of products when needed, the storage facility must be organized so that each
individual brand and product can be found quickly. In practice, this means assigning a specific storage
location (shelf or bin number) to each item in the beverage inventory.
Maintaining Product Quality
To maintain product quality, each item in the beverage inventory must be stored appropriately, under
conditions that will maximize its shelf life. This requires taking into account such important elements as
temperature, humidity, and the manner in which items are stored. Although the quality of spirits will not
be adversely affected in storage under most conditions, wines and beers are subject to rapid
deterioration if improperly stored.
Procedures to Make Beverage Areas Secure
Because beverage products are prone to theft, keeping them in a secure facility is an urgent
requirement. There are two ways to maintain the necessary degree of security. The first is to assign
responsibility for the security of the stored items to one person alone. This responsibility can mean
literally keeping watch over these items. In many hotels and some large restaurants, a steward may be
assigned to work in the storage facility, maintaining the stock and issuing beverages as needed.
Typically, this steward is the only person permitted in the facility, except for authorized managers. In
operations that are open for long hours, responsibility may be shared by two or more stewards working
different shifts. Alternatively, the hours for storing and issuing beverages may be restricted so that one
person can be held accountable for the beverage inventory. The second way to maintain security is to
keep the beverage storage facility locked, and to issue a single key to one person, who will be held
accountable for all beverages in the inventory. The person with the key is required to open the lock and
issue the needed beverages. An alternative provision can be made for issuing the needed beverages in
the absence of this one individual. For example, a procedure can be established by which a manager can
gain access to the beverage storage facility.
The difficulty with both of these procedures is that the individual assigned responsibility for the
beverage inventory is not likely to be available24 hours a day. At some point, the storage facility will be
inaccessible, and no one will be able to obtain items that may be urgently needed. One way to prepare
for this eventuality is to place a second key in a safe or a similar secure location and require that anyone
using it sign for it and write a short explanation of why it is needed. Some managers may require both
an explanation and a list of the items removed from the facility. However, making a second key available
reduces both the degree of security and the possibility of holding one individual accountable for all
beverages in the inventory.
In general, the common standard procedure is to keep the number of keys to the minimum that
management deems appropriate for efficient operation and maximum security. If there is more than
one key or if more than one person has access to the single key, it is normally advisable to change locks
regularly to minimize the possibility that some persons may obtain and use duplicate keys. It is also
advisable to change locks whenever a worker with access to the beverage storage facility leaves the
employ of the establishment.
Some hotels and large restaurants take the additional precaution of installing closed - circuit television
cameras to keep various facilities and their entrances under observation, such as the doors to beverage
storage areas. A security guard in a remote area is responsible for monitoring traffic into and out of the
area on a television screen. As an alternative, activity in the area may be monitored by means of a video
recording that can be viewed by the security staff at a later time. One company sells a device that looks
like a surveillance camera, but does not record anything. In theory, the mere presence of this device will
deter theft.
Another means of monitoring is to install special locks that print on paper tape the times at which the
doors on which they are installed are unlocked and relocked. The times printed on the tape inform
management exactly when the door to a facility was unlocked and how long it remained so. This is a less
costly alternative to a closed - circuit television system, but it provides less information. Maintaining the
security of the beverage inventory is a clear imperative for any hotel or restaurant, requiring constant
vigilance and careful monitoring.
Procedures to Organize the Beverage Storage Facility
Ensuring accessibility means storing beverage products in an organized manner, so that each stored
item is always kept in the same place, and thus can be found quickly when needed. The physical
arrangement of a storage area is important. Similar items should be kept close to one another. All gins,
for example, should be kept in one area, rye whiskies in another, and scotch whiskies in a third. This kind
of arrangement simplifies finding an item when needed. It is helpful, too, for a floor plan of the storage
area to be affixed to the door of the facility so that authorized personnel can easily locate items. One
way of ensuring that items will always be found in the same locations is to institute the use of bin cards.
Bin cards can be affixed to shelves and serve as shelf labels. When properly used, bin cards include
essential information (e.g., type of beverage, brand name, and bottle size). They may also include an
identification number for beverages. Some establishments assign a code number from a master list to
each item in the beverage inventory and record that code number on the bin card.
Procedures to Maximize Shelf Life of Stored Beverages
Procedures for maximizing the shelf life of stored beverages may be divided into two categories:
1. Those dealing with temperature, humidity, and light in the storage facilities
2. Those dealing with the manner in which bottles and other containers are handled and shelved:
1. Temperature,
2. Humidity, and
3. Light in Storage Facilities
For every beverage product, there is a temperature range appropriate for storage that will tend to
preserve quality and shelf life. For some, the range is extremely broad; for others, it is very limited.
Spirits, for example, can be stored indefinitely at normal room temperatures without harming product
quality. If necessary, they can be stored well above or well below room temperatures for considerable
periods. As long as the storage temperature does not become extreme, they will not suffer loss of
quality.
In contrast, carefully controlled storage temperatures are critical for maintaining the quality of beers
and wines. The problem of maintaining product quality for these items is complicated by the fact that
various wines and beers require different treatments, depending on how they were made and the
containers in which they are purchased.
It is normally advisable to learn from the maker, brewer, or distributor of each specific brand the
temperature range recommended for the proper storage of the product. As a general rule, red wines
should be stored at about 55 ° F.
White wines and sparkling wines should be kept at slightly lower temperatures. Pasteurized beers can
be stored for limited periods at normal room temperature without great harm, but they are normally
kept under refrigeration, closer to the temperature at which they will be served. However, beer that has
once been chilled should be kept chilled thereafter to maintain quality.
Unpasteurized beers, including all draft and some bottled and canned beers, should be stored at about
40 ° F to reduce the risk of deterioration. The degree of moisture in the air is of significance only for
those beverages purchased in corked bottles. In general, wines are typically purchased in corked bottles,
and the better the wine, the more likely the bottle is to have a cork rather than a screw top. Low
humidity will cause corks to dry out, thus permitting air to reach the product. Air is likely to harm
product quality. Therefore, wines should be stored either in rooms that are naturally cool and damp or
in special facilities, such as refrigerated rooms where both temperature and humidity can be controlled.
Bottled wines and beers should be kept away from light, which adversely affects product quality. Natural
light is more harmful than artificial light, but any light will affect these products. Vintners and brewers
package their products in colored glass bottles, commonly dark green or dark brown, to minimize the
negative effects of light. However, although the dark glass reduces the impact, it merely slows the
inevitable deterioration that light will cause if these products are not properly stored.
Shelving and Handling of Bottles and Other Containers.
Spirits can be stored upright on horizontal shelves for unlimited periods. In contrast, wines and other
corked beverages cannot safely be stored in an upright position. If they are to be kept for any length of
time, they must be stored on their sides, parallel to the floor.
There are special racks designed to store wines in the proper position. In this horizontal position, the
beverage in the bottle is kept in constant contact with the cork, helping to keep the cork moist and thus
keeping the bottle tightly sealed. Canned and bottled beers are usually not shelved at all. They are
delivered in cases and are stored in those cases. The cases are typically stacked in the storage facility to
save space.
Handling is an important factor in maintaining the quality of wines. They should be handled with great
care as they are being positioned in wine racks and later, as they are being removed to fill customers’
orders.
Many wines, especially finer reds, develop natural sediment that settles in the bottle. If the bottle is
improperly handled, this sediment will be dispersed through the wine, destroying its clarity and making
it unpalatable to those who appreciate and order fine wines. For all practical purposes, the wine
becomes unusable until the sediment has resettled. Sparkling wines - those containing natural or
artificial carbonation - must also be handled carefully for obvious reasons. Beers require careful handling
as well. They are carbonated beverages, and shaking will cause them to foam excessively.
ISSUING
Establishing Standards
1. To ensure the timely release of beverages from inventory in the needed quantities
2. To prevent the misuse of alcoholic beverages between release from inventory and delivery to the bar
It is important for managers to control the quantities of alcoholic beverages issued and to take all
necessary steps to ensure that quantities issued reach their intended destinations.
To achieve these objectives, managers must establish two essential standards for issuing beverages:
1. Issue quantities must be carefully set.
2. Beverages must be issued only to authorized persons.
Authorized persons mean those who have been assigned responsibility for the security of the issued
beverages and will be held accountable for their disposition.
Establishing Standard Procedures
1. Establishing par stocks for bars
Par stocks vary greatly from one establishment to another. In every case, however, the par stock for any
particular beverage should be related to quantities used and should be changed from time to time as
customer demand changes
2. Setting up a requisition system
A requisition system is a highly structured method for controlling issues. In beverage control, a key
element in the system is the bar requisition form, on which both the names of beverages and the
quantities of each issued are recorded. No bottles should ever be issued without a written requisition
signed by an authorized person, often the head bartender
In most beverage operations, one type of requisition form is normally sufficient for maintaining the
desired degree of control over issues. In more complex beverage operations, such as those found in
many hotels, several kinds of requisitions may be required for specialized bars.
Stock-taking
1. To determine the total value of all beverages held in stock. It will indicate if too much is held in
2. stock and if it is in line with the financial and catering policies.
3. To compare the actual value of beverages held in the cellar at a specific time with the book
4. value of the stock, which would have been calculated with a simple formula.
5. To identify slow moving items.
6. To compare beverage usage at cost with beverage sales in order to calculate beverage gross
profit.
7. To deter pilferage and check security and control systems.
8. To determine the rate of turnover
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