HopMonk Tavern Founder Dean Biersch recently trekked to the highest point on the globe: Mount Everest. Yet it wasn’t the first time he reached such heights. In the late 1980s, Biersch and partner Dan Gordon founded the award-winning brewery Gordon Biersch, which eventually grew into an iconic collection of brewery-restaurants with locations across the U.S.
Shortly after selling the successful business, however, Biersch became restless and started a new venture, HopMonk Tavern, near his Northern California roots. HopMonk’s four locations, which offer between 16 and 18 draught beers alongside anywhere from 15 to 25 carefully curated bottle options, are destinations for suds enthusiasts with bustling open-air patios that regularly host live music.
In 2018 when Vice President Javier Silva joined, the business was doing well, but there was ample opportunity to improve. The biggest challenges were the growing company’s technical capabilities and its inventory and reporting workflows.
“It wasn’t user-friendly, there were no real reports, and no drill-down function,” Silva said. “We really didn’t have the ability to decipher whether we were making money.”
After partnering with Restaurant365 the following year, HopMonk fundamentally altered its business. Previously, its old system was so archaic that taking inventory was nearly worthless. With consistent inventory counts in Restaurant365 and managers who understand the benefit of strategically overseeing their locations, HopMonk quickly improved its operational efficiency and profitability. Additionally, Restaurant365 reporting gave Silva and other leaders the ability to negotiate lower prices with mainline vendors and the metrics and confidence to invest in various new revenue sources.
"What Restaurant365 shows us is our biggest expenses week-to-week, month-to-month, and year-to-year and how we can be be much, much more efficient.”
Counting Suds
The benefits of HopMonk’s new inventory process are most evident in its beverage program, which is one of the company’s key strengths and differentiators. By conducting weekly counts combined with accurate, real-time sales and product mix data, HopMonk spotted and eliminated waste while reducing the theft risk.
“Combining your inventory numbers with what you actually sold for the week gives you your actual versus theoretical, and you can really dive into things like how many ounces of beer you’re missing,” Silva said.
Initially, HopMonk’s bar managers reported the top 10 or 20 troublesome products, but in recent months that number dwindled to as few as three or four. With that level of inventory control, HopMonk’s leaders are free to focus on what matters most to guests: quality, experience, and speed of service.
Profitability Report
With Restaurant365’s myriad integrations and reporting capabilities, HopMonk transformed into a data-driven company that empowers leaders at each location with tools and information to boost store-level profitability. Silva does a weekly profit-and-loss (P&L) statement review with general and kitchen managers each week to ensure food, beverage, and labor costs are heading in the right direction.
“The GMs and the kitchen managers now understand the real importance of doing inventory and that we’re going to be able to get right into the nitty gritty of it the day we review those reports,” Silva said. “They become excellent at answering questions and solving problems before the questions are ever asked.”
Silva and his leaders can do the same on the labor side of the restaurant equation by using the average gross sales by hour report.
“Our GMs look at that for scheduling purposes so they can really understand when guests are walking in the door and we should or shouldn’t have people scheduled,” he added.
At a higher level, Restaurant365 reporting has given HopMonk the upper hand in sourcing and negotiating prices. With the period purchase analysis by vendor report and cost of goods sold (CoGS) by location report, Silva and HopMonk save tens of thousands of dollars annually by circumventing their usual suppliers for things like paper goods and linens. In the case of the former, Silva said they analyzed the cost of their paper goods and, instead of continuing to go through a distributor, opted to buy in bulk direct from a bulk supplier.
For other critical items, like chicken breast, for example, Silva has shown one large distributor the savings HopMonk garners, up to a dollar a pound in some instances, when it purchases by itself, in bulk, from a place like Restaurant Depot. That, combined with the fact that HopMonk’s locations each go through about 800 pounds on a slow week, with a total of $11 to $12 million in annual food sales, was enough to convince a mainline distributor to review HopMonk’s numbers for search a better deal.
Branching Out
Like most restaurants, the pandemic and recent years of price and supply instability have fundamentally changed HopMonk’s business. Previously, the company did about $2,000 to $5,000 a week in takeout and delivery. During and after the pandemic, that spiked and held at $25,000 to $30,000 per week. On an annual basis, the increase was from about $50,000 to $250,000 representing approximately 7% to 8% of total company revenue.
Alongside investing in offsite dining, HopMonk has also rolled out two mobile kitchens with a third custom rig on the way. Silva called them the company’s “biggest growth vehicle in the next couple of years.”
“What we find is those are more popular now than ever because people want to get outside,” he added. “If you can provide a high-quality experience at a food truck, not only are you marketing your restaurant, but when you deliver an incredible meal, an incredible experience through a food truck, it makes the brand that much stickier.”
Conclusion
Silva said the key to making any strategic changes in the business, whether at HopMonk’s physical taverns or on the road with one of its mobile kitchens, is the ability to have the data that justifies or debunks whether the investment is worthwhile.
“Every top-line venture needs to make bottom-line sense,” he said. “Are you investing two years’ worth of no profit in learning and growing to a point where you see a profit, or did you just waste two years of your time?” Restaurant365’s platform and tools empower the company to distinguish between a calculated risk as it pays off or a potential loss leader.
