- 10 November, 2003 -

Kosta Callas bellied up to the bar, opened his laptop computer, readied his Palm Pilot, set up his scales and went to work. There was no friendly chitchat with the barkeep or other patrons. At 8:30 in the morning, he mostly had the place to himself. It was eerily quiet at Benny's Restaurant and Cantina in Capitol Hill, hours before the first customers of the day would walk through the door. Callas' task: to keep tabs on all of the beer, liquor and wine on the premises. His Palm Pilot is equipped with a bar code scanner to read the UPC stickers on hundreds of bottles. The weekly inventory of the bottles is compared to sales figures so Benny's owner knows if money's being lost at the bar. "It's not really a trust issue," said Rick Reither, assistant manager at Benny's. "We're just making sure everyone does the right job. And, we know what we're selling and what's not selling, what's being overpoured and underpoured." Callas, a beverage auditor, is the regional master franchisee for Bevinco, founded in 1987 to use advancing technology to lessen liquor loss and improve the businesses' bottom line. Callas owns two franchises in Denver that regularly conduct audits for a dozen clients. One of those clients is Blue Bonnet Caf owner Gary Mobell, who began using the service years ago. "We use a lot of tequila here, and I wasn't sure if there was a problem. I wanted to approximate the best I could our usage with our sales." According to a recent audit, 97.2 percent of alcohol used was accounted for at the Blue Bonnet. "That sure makes me feel comfortable," Mobell said. Toronto-based Bevinco claims that thousands of its beverage audits reveal losses ranging from 15 percent to 35 percent, with the average loss at about 20 percent. Reasons for this "shrinkage"? It's often due to barkeeps who pour with a heavy hand -- standard pour size is 1.25 ounces -- or excessively comp regular customers. Sometimes it can be simple carelessness, or worse, employee theft. To pin down where the shrinkage is occurring, all open liquor and wine bottles are weighed; full bottles are counted. The information is downloaded to the inventory taker's laptop. Bevinco's software program compares the amount poured to the number of units sold, then indicates all the shortages. "We're educating customers to evaluate their business in a different way, to look at more than just their pour costs," Callas said. Given the hefty markup on alcoholic beverages, every ounce of liquor unaccounted for takes a bite out of the profit. If there's a frustrating part to auditing booze, it's when clients fail to act on the information, said Callas, who acknowledged that the audit "isn't a silver bullet." "The problem won't be solved unless the information is used, otherwise it's a waste of the client's time and money," he said. Uniquely, Callas said he's been interested in the alcohol industry since he was a teenager, when his father owned a liquor store outside Steamboat Springs. "As a 13-year-old, I enjoyed reading articles in my dad's Beverage Analyst Magazine about profitability issues," Callas said. Later, while studying for his electrical engineering degree at the University of Colorado, Callas worked as a bouncer at a Boulder bar. "I know how many free drinks we got. That's why the (beverage auditing) business makes sense to me." Before he landed in the hospitality sector, Callas put his engineering degree to use as a sales engineer for an electronic component distributor. After two layoffs, he decided it was time for a change. In 1996, he began working for the Bevinco franchisee in Denver. He later bought that franchise, using two credit cards to finance the $15,000. He now owns a second local franchise and has two employees who do most of the on-site audits. In 2001, he and an out-of-state partner bought the master regional franchise for Colorado, Utah, New Mexico, Wyoming, Idaho and Montana. Bevinco's software program closely tracks inventory, sales and purchases. To start a new account, Callas crunches the numbers during two secret audits in order to get a baseline. Results are reviewed with the business owner, and any problems are pinpointed. In most cases, steps are taken to resolve the issues and keep them from recurring. After the undercover audits, Callas meets with the client's staff to demonstrate the software, explain the process and lay out future expectations. When it comes down to it, Callas said, auditing alcohol is like cashiers counting their cash drawers every night.

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