Beverage pricing: how to price drinks so they actually fund the kitchen
Beverage cost targets, the wine-by-the-glass math, beer margins, and how to structure a drinks list that earns its keep.
A cocktail costs €2.50 in spirits, juices, and garnish. At €12, that is a 21% beverage cost. The same ingredients in a bottle of wine cost €1.80 per glass at a 35% pour. The math is simple, but most operators never do it. They price the cocktail because it 'feels right' next to the menu, then wonder why the food cost percentage creeps up when the bar tab grows. Drinks are not a side show — in a full-service restaurant they contribute 40–50% of gross profit.
The three categories of drink cost
- Spirits and cocktails: target 18–25% cost. A well-managed bar runs 20–22%. Above 28% means over-pouring, expensive garnish, or comp abuse. Below 15% usually means underpricing — the customer will notice.
- Wine by the glass: target 25–35% cost. The by-the-glass price should sit at 40–60% of the bottle's customer-facing price for a 600 ml bottle (about 5–6 glasses). If the glass costs €4 and the bottle is €30, the customer perceives a deal. If the glass is €7 and the bottle is €30, they will drink from the bottle.
- Beer and cider: target 15–25% cost. Keg beer runs 12–18% because the cost per pint is low and volume is high. Craft beer at €6.50 on a €4.20 cost lands at 65% — that is a margin item, not a volume driver.
A worked example
A gin and tonic costs €1.80 in gin (30 ml from a €24 bottle), tonic, and lime. The menu lists it at €8, €11, and €14 in three different venues.
| €8 | €1.80 / €8 = 23% | At target — acceptable for a volume driver |
|---|---|---|
| €11 | €1.80 / €11 = 16% | Below target — generous, good for a happy-hour anchor |
| €14 | €1.80 / €14 = 13% | Premium pricing — justified only if the gin is premium and the story is told |
The cocktail does not change. What changes is the price architecture. A €14 G&T works in a bar where the gin is named on the menu and the pour is generous. The same drink at €8 in a sandwich shop is a volume driver, not a margin item.
Making it stick
- 1Set targets per category. Write down your beverage cost target for cocktails (20–25%), wine (30%), and beer (20%). Post the numbers where the bar team can see them. The target is a range, not a single number — seasonality and mix will move you 2–3 points either way.
- 2Track pour cost monthly. Pull the cost of every spirit, wine bottle, and keg unit. Divide by units sold. Flag any item where actual cost exceeds target by 3 points for two consecutive months. Pour cost is your leading indicator — the aggregate is your lagging one.
- 3Audit the pour. Check glass volumes, free pour rate, and comp rate. A well-run bar comps 3–5% of drinks. Above 8% means the team is using comp as a social lubricant, not a retention tool. Calibrate the pour with a jigger and a timed test.
- 4Re-price in stages. Raise drinks before food. A €1.00 increase on cocktails is less visible than a €2 increase on mains. Stage the increase across two menus: first the happy-hour list, then the full menu 30 days later.
FAQ
- What is a good beverage cost percentage?
- 18–25% for cocktails and spirits, 25–35% for wine by the glass, 15–25% for beer. The target depends on your mix: a wine-led venue will run higher on wine, a bar-led venue will run lower on spirits. The right number is consistent within each category, not a single aggregate.
- Should wine by the glass cost more than double the bottle price?
- No. The glass price should be 40–60% of the bottle price per glass equivalent. A €30 bottle that gives six glasses should sell the glass at €5–8. Above €9 per glass, customers will buy the bottle and split it, which destroys your margin on the glass sale.
- How do I price a new cocktail without guessing?
- Start with the cost: spirits, mixers, garnish, and the glass. Set your target at 20–25%. Then check the market: if your competitor's equivalent is €11, price at €10–12. If the cost math says €9 and the market says €14, price at €12 and tighten the pour.
- Is it okay to price drinks differently for happy hour?
- Yes, and you should. Happy hour pricing at 60–70% of the standard price drives volume during slow periods without resetting the customer's anchor. Just do not let the happy-hour price linger on the menu for more than 60 days — once the discount is the norm, it is the anchor.
Keep reading
- Food cost percentage: the one number that tells you if your margins are working
What food cost percentage actually measures, where the target should sit, and how to fix it when it drifts.
- How to structure your menu pricing for maximum profit
A practical guide to menu engineering: food cost targets, margin calculations, and pricing psychology.
- Menu design psychology: how layout, placement, and framing drive what customers order
The science of menu design: eye movement patterns, the golden triangle, anchoring, and how to structure a menu that sells itself.
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