U Weekly. Serving The Ohio State University in Columbus Ohio

'The Drink Exchange'

By Adam Konvalinka

A cheap happy hour can make even a lousy bar a hot spot, but sipping the same special week after week might send customers seeking something different. To keep attracting crowds, a new concept for happy hour has started on the West Coast called the "The Drink Exchange." Specific drink prices will fluctuate because of demand and changes are constantly updated on TV screens, like the stock exchange.

The idea came to Todd Shram, founder of "The Drink Exchange" through a friend, "They were doing it in Turkey, of all places," he said. "One of my friends went to a bar there named after the stock market and thought it was the coolest thing." Shram researched the concept and found there were no bars in America doing anything like this. In 2005 he founded the company "The Drink Exchange" in San Diego and began developing and testing software. The company launched the software into official use about seven months ago, according to Shram.

The "The Drink Exchange" software system was developed to provide a unique and interesting alternative to normal bar promotions. Bar owners can set minimum and maximum prices for each individual drink and also the percentage by which prices will fluctuate. If one item is purchased frequently, the price on that item will go up as prices on other products go down. The drink prices are shown on TVs like stock listings would be on the business news, so customers can follow the action. "People love to watch it and see what everyone else is drinking. Some people will even wait to order a drink until one of their favorites becomes cheap," said Mark Cirillo, one of the owners of Verant Group, which owns a number of successful bars and restaurants. Verant Group is also based in San Diego, and when Cirillo heard about the concept, he thought it would be a way to stand out.

"It's unique and new, and these days everyone can relate to the stock market going up and down," he said. Customers eagerly await "crashes," when the bartender hits a button to make all drinks go to their minimum for a minute and a half, he said. The system can offer up to 20 different items at a time that can be placed in categories such as beers, shots, mixers, or even food items.

The purpose of the drink system is to entertain and draw customers, but it also has benefits for bar owners, Cirillo said. "It allows you to offer good discounts because you know the system is enabling you to make back the money on other items," he said. His bars often do happy hours where all drinks are $3. "I lose my shirt on a lot of those items and I have to hope I sell enough of the items I do make a profit on to make it successful," he said. Bar owners can use the information provided by the system to get a better understanding of their customers' preferences and drinking patterns. "It's absolutely a good tool in that regard, I can do things like put different shots up against each other to see what people prefer," Cirillo said. It also aids in keeping track of inventory.

Panini's bartender Jennifer Eilers said she does not think "The Drink Exchange" will catch on in the campus area anytime soon. "Honestly, what people want around here is what costs $1," she said. Eilers was preparing for Friday Power Hour from 7-9 p.m. when almost all drinks are a dollar and appetizers are half price. "I understand it's a fun thing, but I feel bad for those bartenders in California," she said. Even though the computer updates prices automatically, having to go to the register to come up with a customer's total would be inconvenient, she said. "I think the bar would do less business because the drinks are not getting out as quick." The drink system is designed to appeal to a slightly older, more sophisticated crowd, and works best with pricier bars. Shram said he has no potential customers in Ohio yet, but is optimistic that the system will catch on and spread nationwide. More information at thedrinkexchange.com.

Originally Published: February 3, 2010

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