Articles on the topic of food and beverage (F&B) losses come out so regularly they are like a bad record stuck on repeat. Sorry (I’m not sorry) to be perpetuating the trend. To put the concept simply, a club is going to lose money in F&B operations, just as it does in every other area, from golf to tennis to the pool. Even those that say they make a profit do not take into account the overhead costs not specifically allocated to the department.
Dues subsidize all the aspects of a club so why does F&B get so much more scrutiny? It’s similar to the attitude many have about education. Everyone went to school so anyone can teach! Since all members eat, and many actually prepare food, they all believe that they can run a restaurant. Without the restaurants and pool cafés, wine tastings and craft beer options membership could cease to exist. Not only does the club need to have a scintillating F&B program, it must do it in a variety of settings. This makes food and beverage (F&B) the most examined department of Club operations.
Let’s look at the basic formula of food and beverage operations, a formula to which most members are aware but have not put together with their Club experience:
# of covers x price - costs
- Number of covers or diners is fixed based on membership. Covers may fluctuate but they will never (or rarely) swing in such a grand manner on which to hang your operational hat.
- Price is fixed by market. Although offering organic or specialty items allows for an expanded pricing strategy, it is 2017 and there are many different choices that the members pass by on their way to the club.
- Costs for clubs are complex and include not only quality and quantity of goods themselves but the quality and quantity of service. The abundance of those elements is quite simply the draw for members. Decrease any one of those inputs and you’ll have member mutiny in very short order.
Obviously other qualitative factors can be tweaked including aesthetic nature of dining rooms, dress requirements, absence or presence of technology, etc. but even those won’t factor into significant revenues.
The club specific elements of the formula are simply not conducive to turning a profit in any department. Just as the golf course or fitness center will never be a profit center you should not expect your F&B department to support itself. That’s why members pay dues. It is your club, enjoy it!