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 €2.50 cocktail at a €12 net selling price has a 20.8% ingredient cost. For wine, calculate bottle purchase cost per usable glass first, then divide by the target cost fraction. Check measured pour size and waste before judging either category’s margin.
The three categories of drink cost
- Spirits and cocktails: an 18–25% ingredient-cost target is a planning range. A well-managed bar may aim for 20–22%. Above target, check pours, garnish and complimentary drinks. A low cost percentage can reflect a high selling price; it does not prove underpricing.
- Wine by the glass: a 750 ml bottle at €9 purchase cost yields six 125 ml glasses before waste. Cost is €1.50 per glass; at a 30% cost target the net glass price is €1.50 ÷ 0.30 = €5. At 25–35% targets the range is €4.29–€6. Compare with the bottle’s menu price and local demand after doing this cost calculation.
- Beer and cider: calculate cost per saleable serving, including keg loss. Craft beer bought at €4.20 and sold net at €6.50 has a 64.6% ingredient cost and €2.30 contribution before other costs. It has a thin percentage margin; judge volume and contribution together.
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 cost percentage: higher contribution at this price |
| €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.
- How do I calculate the wine-by-the-glass price?
- Divide bottle purchase cost by usable glasses, then divide that cost by the target cost fraction. A €9 bottle with six usable glasses costs €1.50 per glass; at 30% the net price is €5. If the menu bottle price is €30, six €5 glasses total €30. Waste reduces usable yield and raises the required price.
- 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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