Perfecting the Internet of Things–at a Saloon Near You

Your friendly, neighborhood pub is not where you normally expect to find leading-edge automation. Even if your idea of the ideal bartender tends toward Tom Cruise and Bryan Brown twirling bottles in the 1988 movie Cocktail, the profession seems more about personality and relationships than about calibrating the data behind a precise pour.

But your favorite water hole may be undergoing a technology makeover and providing a showcase of how the Internet of Things and Big Data are making inroads into territory as unlikely as the neighborhood saloon.

Liquor is big business–more than $160 billion in beer, wine and various spirits get consumed in the U.S. every year: 25 gallons-+ per person. Gallup surveys show that a consistent 60% of the U.S. populous likes to imbibe at least occasionally, often with meals, which makes the bar a major contributor to the bottom line of most food service establishments. Like a well-crafted martini, the combination of high margins, low labor costs and big volume that characterize bar operations are a potent mix. But while the profits from liquor can make a restaurant, the opposite also holds true: many a restaurant has ended its days prematurely because of poor management behind the bar.

But how do you track a business that is, well, so liquid. Enter the Internet of Things: the lowly bottle spout is now intelligent, able to measure the amount of each pour and transmit the data to controllers where it can be, well, pored over by owners and managers who want to know where their profits are coming from and where they might be, literally, going down the drain.

BarVision (www.barvision.com) is one of several companies staking out a claim in the liquor management market. Founded in 2006, it’s the owner of numerous patents and trademarks on an intelligent spout that it manufactures. It started out as a standalone, on-premises solution that it pitched as a way to keep track of the careless (or worse) bartender who over pours, forgets to charge, comps his friends, etc. Estimates of the losses due to this kind of shrinkage are typically in the 20-30% range and the company made headway with its promise of ROI in well under a year.  Solution brief available here: http://www.solutionprovidersforretail.com/ Informatin Resources

In 2012, however, BarVision got new owners/managers who saw the future as a cloud-based solution with easy integration to commercial point-of-sale (POS) systems and a value proposition that was less about being Big Brother on the barkeep and more about helping owners and managers manage the business. “Every industry in the world tracks its most important asset,” notes Aaron Post, BarVision’s Director of Business Development.  “We are making it possible for the bar industry do that. We want to be the Google analytics of bars.”

As it turns out, while there is no shortage of liquor-imbibing patrons (the Gallup 60% figure has been constant for some 75 years) shifts in taste and demographics have to be watched.  Rye whiskey, which all but disappeared for decades, is a hot drink again. So are flavored vodkas and “skinny” low calorie cocktails. Craft beers continue to take market share from mass market brews. And now there are also craft liquors.

Shifts in taste can take their toll. Overall, beer has lost some of its appeal vs. wine and spirits.  In Britain, this has helped put the storied neighborhood pub on the endangered list. According to a recent story in the New York Times (http://www.nytimes.com/2014/02/17/business/international/saving-an-endangered-british-species-the-pub.html?_r=0  ) one out of five British pubs has gone under over the last two decades, some 7,000 alone shutting off their spigots since the 2008 financial crisis.

Tracking these changes–and profiting from them–is what BarVision is all about, said Post. “It’s less about controlling or restricting the pour and more about understanding how to make every pour more profitable,” he said.

Post cited the example of a bar carrying a range of craft whiskies. “They will typically group them into different price categories, but realistically the cost of each of these liquors varies so widely, they are probably really doing well on some drinks and losing money on others. We can show them exactly what they are doing and let them adapt accordingly.” 

In the BarVision system, the spouts capture and send data on every pour to a BarVision Controller, which is based on an Intel NUC computer. The NUC was chosen for its small footprint and because it had the horsepower to keep performing even in a battery-operated low power environment. The NUC also accesses data from the POS systems in use at the bar so each drink can be matched with its POS transaction. The BarVision system can also be equipped to gather audience metrics: anonymous data gathered via in-bar sensors that can be used to help match consumption patterns by age and demographics of the patrons, so managers can get a complete picture on performance.

The whole goal is to pinpoint profits, losses, consumption patterns, inventory/reorder needs and ultimately drive the performance of the business. Is Happy Hour worth? Ladies Nights?  Should the mother of all promotions, the bar owner’s proverbial free lunch, be making a comeback?

When the spouts in your bar are connected and intelligent, anything is possible.

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