Cellar to glass: A spy on your side
The new generation of monitors stop theft, check what sells best and boost quality.
There is a black hole in the middle of many pubs' finances that few will admit to. While licensees struggle to make ends meet they may be losing a crucial chunk of their takings - without even realising it.
The Lord Nelson on the Isle of Dogs, featured in the case study below, was "losing" hundreds of pints a month. Whether it is down to bad practice, dishonest staff or a bar person who simply thinks it's okay to give away a few free pints to their friends, that's the kind of problem no small business can afford.
Trouble is, by the time the losses show up in a monthly stock-take it's too late, and impossible for you to tell exactly when and how it's been happening. The technology exists, however, to pinpoint the problem and give pub operators a chance to act swiftly and effectively to put a stop to it.
Beer line monitoring, which enables you to match what goes in the till with what's gone out of the pumps within a narrow timescale, has been around a good few years. But it would be fair to say it has not been greatly welcomed by much of the trade.
Systems such as Brulines, still the most famous name in the field, were initially installed in pubs by tenanted and leased pubcos, principally to prevent licensees buying outside the tie. Understandably, even honest publicans didn't like this idea and the systems were soon dubbed "the spy in the cellar".
But this is only one way to look at monitoring systems. Potentially this sophisticated technology should be an asset to a licensee locked in a daily battle to control cash and stocks. Crucially, it can tell you not only that you've lost beer - or the money for it - but at what time the problem occurred, in which bar and maybe which till. You'll be able to tell if it's a staff problem or a line-cleaning issue.
And it doesn't just measure draught beer. Brulines now boasts "total atmosphere" control and the latest systems can monitor spirits dispense and even keep track of bottles removed from the fridge.
As well as security and stock control, the kind of information you can get out of this can help you measure the success of promotions and tell you which drinks sell best at what times. And if you want to take it a stage further you can even improve the quality of your beer by monitoring line-cleaning and cellar and beer temperature.
Clive Consterdine, operations director at Nucleus Data, which claims it now supplies beer monitoring systems to some 40 per cent of the tied trade, believes the reason for his firm's fast growth is that pubcos recognise the benefits that detailed and accurate data analysis can have on driving profitability for both company and licensees. "Dispense data management has long been regarded merely as a security tool," he says. "In fact, it can create profits for pub companies and tenants that neither party would have expected.
"For example, every licensee knows how important it is to clean lines regularly and our system records whether beer is being dispensed or water flushed through, so it is possible to see exactly when and for how long the lines were last cleaned. It also identifies the times and volumes of any exceptional losses, such as a leak in the line."
The information is available to licensees through software accessed via a PC. If they are away from the pub they can plug a laptop into a mobile phone and pick up the data that way.
And, as Clive adds, the system can also act as a quality control for the pub company to spot when a licensee isn't cleaning the lines often enough. "Dispense data management provides all the information necessary for pub companies and tenants to be able to work together to develop a strategy for building the business," he says. "It provides open, clear and accurate data on trading patterns, brand performance and product quality."
At least that's the theory. While several tenanted estates are moving towards 100 per cent coverage with beer monitoring, you suspect these systems continue to be underused - at least as far as the licensee is concerned.
Derek Plimley at InnLine, which has been developing its draught beer and spirits monitoring system since 1997, thinks progress has been held back by negative perceptions in the trade. "It's so difficult to get the message across to people," he says. "You either hit the confidentiality issue or they have tried a system and it hasn't really given them the information they need in the right form.
"Also the trade tends to blank out the things that go on," continues Derek. "Some of the volumes lost amount to serious theft, it's not like the odd packet of fags. Pubs are the last market where there's so little accountability, so little control of cash."
He believes that pubs could be four or five per cent down without even knowing it - and knowing about it is the important thing. A former wine bar owner himself, Derek is aware that the occasional free drink across the bar can be good for customer service. But the licensee has to be able to account for it.
The InnLine system links flow meters on the taps and spirits dispensers to the pub's tills and back-office computer. The results are displayed real-time on demand in simple graph form on the screen in half-hour sessions. Colour coded bars highlight when there is a gap between products dispensed and money rung up on the till, showing the exact time that losses are made.
Perhaps the most comprehensive monitoring device for pubs, however, is set to be launched in January, following trials. The Cotec DMS-180 is a modular system that not only monitors draught beer and spirits dispense but claims to have cracked bottled drinks tracking too. A bottle opener on the bar incorporates a barcode scanner which counts each bottle as it is opened.
The system also includes a cellar conditions module to automatically check temperature, gas pressures and line-cleaning activity, helping raise product quality. It can measure the amount of beer left in a barrel, without using the usual technique of weighing, and on the health and safety side, it can detect any dangerous build-up of carbon dioxide in the atmosphere.
Cotec Technology was set up three years ago by entrepreneurs Alistair Flanagan and James Morgan. Until now the company has concentrated on making electronic testing equipment for the railway industry. But James' family owns two busy pubs and were stung by the manager of one outlet who defrauded them of more than £60,000. He was convicted but the money was lost.
"That was the inspiration behind the monitoring product," says James. "It highlighted the need for closer stocktaking. We already had the technical expertise and the will to do it - and the DMS-180 is the result."
The system has already won an innovation award from Business Link Tees Valley.
Case study: the Lord Nelson, the Isle of Dogs, London
Lessees Peter and Rosemary Eggle have plugged a flow of lost profits thanks to beer monitoring.
Barstaff at Punch Taverns pub the Lord Nelson on the Isle of Dogs in East London were pouring hundreds of pints for free before the Brulines system was installed.
"Eighty per cent of our sales come from beer, so to be losing as much as 256 pints every month was putting a major strain on the business," says Peter. "Since a re-calibrated Brulines system was introduced we've barely lost a single pint - everyone knows there is no room for error and our balance sheet is a lot healthier."
The couple knew something was wrong when they checked till receipts at the end of each barrel. They feared that either staff were mistakenly giving away free drinks to customers or they were being supplied with barrels that were not entirely full.
Brulines' E
