In 2005, Jessica DeMelo earned a business degree and put it to practice by opening a bar. To help Jessica get started, her father Barry gave her his retirement and bought the building for $285,000. Jessica made her brother David a business partner to work at the bar in his spare time. In honor of their father they named it after his childhood nickname.
Upon opening, Libad’s enjoyed early success as the only watering hole in the seaside fishing town. They had lines out the door and were making about $40,000 a month. The bar’s kitchen run by Jessica and David’s cousin Lenny flourished. However, Lenny hit some personal problems and unexpectedly took his life. After the family tragedy, Jessica and David decided to close the once thriving kitchen for good.
Libad’s lack of food sent customer to taster haunts. Barry wants them to reopen the kitchen in order to bring the bar back to turning a profit. Reeling from the loss of their cousin Jessica and David hired more friends and family to work at the bar. However, the staff only took advantage of Jessica’s trust but over pouring for tips and performing gross antics behind the bar. There isn’t one bartender that doesn’t drink behind the bar when they’re working.
With Jessica and David helming a sinking ship, Barry decides to send the distress signal for help.
Libad’s is one of the only bars anchored in the south end of New Bedford but fails to lure port side residents. Libad’s owner Barry DeMelo has called in bar expert Jon Taffer and joins Jon for the recon to keep this seaside bar from washing out to sea.
Barry came to the US in 1966 as an immigrant from Portugal and didn’t speak a word of English. He gained his success from working hard and saving his money. In addition to purchasing the bar for his kids over the last couple of month he has put another $30 to $40 thousand into the bar because he doesn’t want to see his kids fail. Barry feels that they are not running the bar like a business; instead it is more like a social club.
Libad’s is a 2,000 square foot space with a u-shaped bar, that contains three service wells, six beers on tap and a mechanical bull in the back – that they bought for $20,000. Downstairs a fully functioning kitchen with a stone pizza oven sits unused. As Barry, Jon and expert Peter O’Connor sit outside the bar during the recon they are discussed by the appalling antics taking place behind the bar and the deliberate over pouring.
The first thing Jon and Peter do when the get to the bar is have all of the bartenders pour a one ounce shot into a black glass. With the blacked out glasses you lose sight of the liquor and it makes it much harder to pour accurately for an untrained bartender. Unexpectedly, all of the bartenders passed on pouring accurately. Therefore, they knew that they were over pouring. The BevIntel reports are even more infuriating as it was estimated that the bartenders were giving away just under $100,000 in liquor a year. If Jessica was one top of the beverage cost (or if she even know what one was) they would have made $6,000 last month instead of losing $2,000.
Thing get worse during the stress test. The bar doesn’t have enough glassware, therefore the bartenders keep reverting to plastic cups. In addition the sinks are not set up for hand washing the glasses. Eddie is a disaster behind the bar, unable to event layout the glasses and put ice in them. He is so unbelievable stressed out that he is not functioning at the level of any of the other bartenders.
As patrons are waiting an hour for a drink, Jessica runs through the room trying to help. However, she isn’t accomplishing anything. She’s not a manager; she is not running this business it’s running her.
There are no procedures in the bar. They have a 25 year old cash register that doesn’t properly track the orders. Therefore, they keep the credit cards with sticky notes on them to keep track. The credit card machine is a separate device from the register on the other side of the bar making it really difficult to complete a transaction.
David is a nice guy but doesn’t seem to do much of anything. He just walks around and runs the bull. The bull on the back side of the bar is not making money and is alienating a large part of the audience. Is it worth keeping when it’s not adding to the value of the establishment?
It’s time to stop the tears and the excuses and make some money.
New Bedford, MA is the number one fishing port in America. With a population of 100,000 the area is swimming with blue collar fisherman, hauling in wages averaging $33,450 per year - $17,000 less than the national average. Therefore, customers must be enticed by value to spend their hard earned cash.
For the bar Jon has brought in Diageo Master of Whiskey Peter O’Connor, given his years of experience working with the world finest whiskeys Peter can sweeten this salty staff and create coastal cocktails to tie over thirsty locals.
Boston is drenched in Rum soaked history. In fact, Rum helped spark the American Revolution that started in Massachusetts. In the early 1700’s Rum production was one of colonial America’s largest industries. When Britain passed the Sugar Act in 1764 increasing taxes on exports out of Boston the local Rum industry was hit hard. The Sugar Act along with the later Stamp Act lead colonists to declare no taxation without representation which became a rally cry of the American Revolution.
Peter works to train the underperforming bartenders and challenge the successful ones with a variety of new Rum and Whiskey cocktails that will pair well with the new food items that will be created in the newly opened kitchen.
Jon has a surprise for Jessica and David down stairs in the kitchen. He has Cintas come in and professionally clean and disinfect everything in the kitchen. Lenny has been gone for seven years and Jon explains to Jessica and David that it is time to move on and honor Lenny by drawing people to the business that he loved.
Looking for the bars untapped food potential Tony G. has been called in to fire up the kitchen. Tony Gemignani is an award winning chef who owns and operates four popular restaurants and upscale bars in San Francisco. Tony is an 11 time world pizza champion and a master instructor at the International School of Pizza. He is the perfect asset to help train the new cooks to properly utilize the cold pizza stone.
The pizzas that they create are long oval pizzas that are 60% smaller than a normal pizza but look more expensive utilizing the science of perceived value. To cook a pizza properly, when you put the pizza in the oven you always keep it cooking in the same spot. A stone pizza oven consists of a baking chamber made of stones that are fire proof but can still store heat. When an uncooked pizza is placed on the hot stone the pizza cooks from the bottom up creating a crispy crust. Since the stones that the pizza touches are cooled by the uncooked dough each new pizza must be placed in the same spot – known as the cool spot to ensure a consistently cooked crust each and every time.
Once the training gets under way, Jon sits with Jessica and David to go over the P&L’s. He also invites Barry to sit in on the conversation since he should know what is going on in the business as he is the one that contributed all of the money to purchase the bar. Their beverage cost is 45% - the second highest Jon has ever seen in his life. It should be around 21% for this type of bar.
Beverage cost is determines by adding up to cost of product that’s used and dividing it by the amount of product sold. For example if a bar used $5,000 and had liquor sales of $25,000 in one month their beverage cost for that month would be 20%. A beverage cost that hits at 21% or less is considered to be profitable. Jessica promises that her number one goal is to manage the businesses expenses and get back on track.
After the 36 hour renovation process, Jon reintroduces the staff to Libad’s Seaside Tavern. Jon chose the word Tavern for a specific reason. It’s a traditional word and New England is a traditional place; tying into the local culture and esthetic of the community. Jon also added a large sign to the side of the building. This is key as the 5,900 cars that drive down the road that passes Libad’s they will see the new sign and know that they now offer food.
Having food will keep customers on average 52 minutes longer that an place that doesn’t. In addition, Jon added six new tables that previously didn’t exist in the bar. Each one of the chairs is worth $10,000 a year.
One month after the relaunch, drink sales have doubled and food sales are bringing in $3,500 per month. Eddie still works at Libad’s as a runner and only trends bar on slow nights to hone his skills. The staff is pouring perfectly into glasses, not shoes.