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The gap between the theoretical amount of product that should have been used (based on sales data) and the actual amount consumed. Shrinkage is caused by overpouring, spillage, theft, and untracked comps — and is the primary driver of pour cost variance.
Shrinkage is the number that reveals what's actually happening behind your bar versus what should be happening. A theoretical usage of 10 bottles of vodka against an actual usage of 12 bottles means 2 bottles of vodka disappeared without generating revenue. That's shrinkage.
The four causes each require different responses. Overpouring is a training and measurement problem — solved by jigger standards and regular pour testing. Spillage is a technique and workflow problem — solved by spec documentation and setup. Theft is a controls problem — solved by inventory frequency, access management, and accountability systems. Untracked comps are a policy problem — solved by clear comp authorization and recording.
Industry benchmarks place acceptable shrinkage at 3-5% of total pours. Above 10% typically indicates a systemic control failure — usually either consistent overpouring, active theft, or comp policies that aren't enforced. Many operations don't calculate their shrinkage rate because they don't run theoretical usage — they only count what's left, not what should be left.
methodus provides the recipe-level costing data needed to calculate theoretical usage accurately — the foundation for any meaningful shrinkage analysis.
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