Monday, January 3, 2011

For Steve: Why Restaurants Only Give You 2/3 of the Diet Coke

So I get this text from my friend Steve the other day: " should write an article about how ice is a scam. Restaurants put it in and it fills up a third of the volume, then you really only bought 2/3 of a soda." So Steve, this one's for you, here's the financial underwriting of restaurant cokes...

Let's say the restaurant sells 45 cokes a day (conservative for most) and it costs them 20 cents a coke, assuming of course they buy in bulk or are mixing their own syrup through the gun at the bar. That's 1,350 cokes a month, costing the restaurants $270. If they charge $1.75 for the coke, their coke revenue is $2,362.50 and their operating profit is $2,092.50.

This is assuming we live in a normal world where when you buy a coke at a restaurant they give you the whole coke, but we don't and they don't, they give you 2/3 of the coke and load the rest of the glass up with ice.

So therefore, though they are selling 1,350 "cokes" they are only 2/3 full, which means they only need to buy 891 of them. That costs them only $178.20 versus $270, saving $91.80 per month, which adds up to an annual savings of $1,101.60. That's ends up being probably more like $800 after taxes, which goes straight to their bottom line.

So how's an extra $800 sound, Steve?

A table on stage at Royale and you're paying? Well alright, I'm not gonna argue with you, just stop yelling at me about it, people are starting to stare...