Smaller Sodas in NYC Leads to Larger Profit Margins

We have all read of the size cap placed on soda and other sugary drinks in New York City by former mayor Bloomberg. Today the New York State Supreme Court agreed with a lower court’s ruling that such a ban is illegal at least in the way this one came to be. The ruling today focused mainly on how the Health Department overreached their bonds by becoming a law making entity instead of being an enforcing entity, which is its true function. Although this ban was short lived and truthfully did not effect many businesses or people, it did get recognized buy major soda companies. With health consciousness being a major hospitality trend in recent years, both Pepsi and Coke-a-cola have released smaller bottle and can sizes with the ideal that more people will drink soda if it is offered in a smaller container.

One the business side of this argument. These smaller cans and bottles are being soda for a larger profit (think of the flip side of the law of economies of scale). This idea should be implemented in restaurants and bars around the country. It will be easier to upsell a customer who is drinking a water to a small soda than a large soda. Assuming the sales volume is there added a dollar or two to each check is a huge increase over a whole year. So even through large drinks can be offered everywhere now, Hog and Rooster Hospitality recommends restauranteurs look at their small size offering first for a healthier customer and a healthier bottom line.

To comment on this blog post or any other by Hog & Rooster Hospitality reach out to us on Twitter @HRHospitality.



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