Most restaurant owners think a busy bar equals a profitable bar. That's completely wrong. You can serve 200 drinks a night and still lose money if your margins are off.
What is your bar's contribution?
Your bar's contribution goes beyond raw revenue numbers. You need the contribution margin: what remains after you subtract direct costs.
💡 Example:
A restaurant with 70% food revenue and 30% bar revenue:
- Total revenue: €50,000/month
- Food revenue: €35,000 (70%)
- Bar revenue: €15,000 (30%)
But does the bar also deliver 30% of your profit?
Calculate your pour cost percentage
For beverages, you'll use pour cost instead of food cost. This shows what percentage of your selling price goes toward beverage purchases.
Pour cost formula:
Pour cost % = (Beverage purchase costs / Selling price excl. VAT) × 100
⚠️ Note:
Alcoholic beverages carry 21% VAT, not 9%! A beer priced at €3.00 incl. VAT equals €2.48 excl. VAT.
💡 Example pour cost calculation:
Heineken beer:
- Selling price: €3.00 incl. 21% VAT = €2.48 excl. VAT
- Purchase price: €0.65 per bottle
- Pour cost: (€0.65 / €2.48) × 100 = 26.2%
That's a solid pour cost for beer.
Standard pour cost percentages
Different beverages deliver different margins:
- Beer: 20-28% pour cost
- Wine by the glass: 18-25% pour cost
- Spirits/cocktails: 15-22% pour cost
- Soft drinks: 10-15% pour cost
- Coffee: 8-12% pour cost
Calculate total contribution margin
The contribution margin shows what's left after removing direct costs. For your bar, that means beverage costs plus any dedicated bartender hours.
Bar contribution margin formula:
Contribution margin = Bar revenue - Beverage costs - Direct bar staff costs
💡 Example contribution calculation:
Bar with €15,000 revenue per month:
- Bar revenue: €15,000
- Beverage costs (22% average): €3,300
- Bartender 60 hours × €15: €900
- Contribution margin: €15,000 - €3,300 - €900 = €10,800
Contribution percentage: 72%
Compare bar vs. food contribution
Now you can fairly assess if your bar pulls its weight against your kitchen:
- Calculate your food revenue's contribution margin
- Calculate your bar revenue's contribution margin
- Compare the percentages
💡 Example comparison:
Restaurant with food and bar:
- Food: €35,000 revenue, contribution margin 65% = €22,750
- Bar: €15,000 revenue, contribution margin 72% = €10,800
- Total: €50,000 revenue, contribution €33,550 = 67.1%
The bar delivers 32% of total contribution (€10,800 / €33,550), while representing only 30% of revenue. Excellent!
Signs your bar isn't contributing enough
Most kitchen managers discover these red flags too late, but here's what to watch for:
- Pour cost above 30%: You're pricing too low or paying too much
- Low revenue per square meter: Your bar occupies space that could generate more
- High staff costs: Too many bartenders relative to revenue
- Excessive waste: Opened bottles, expired inventory, incorrect pours
⚠️ Note:
A bar with lower contribution might still add value through enhanced guest experience and extended stays. Consider the complete picture.
Improve your bar's contribution
If your bar isn't contributing enough, you've got several moves:
- Raise prices: Especially on premium brands
- Push profitable drinks: Cocktails typically beat beer on margins
- Cut waste: Better portioning, FIFO rotation for wines
- Optimize purchasing: Negotiate better supplier deals
- Train staff: Proper pouring techniques, effective upselling
How do you calculate your bar's contribution? (step by step)
Gather your bar figures from last month
Note your total bar revenue, all beverage purchases, and your bartender(s) hours. Make sure you distinguish between alcoholic (21% VAT) and non-alcoholic beverages (9% VAT).
Calculate your average pour cost percentage
Divide your total beverage costs by your bar revenue excluding VAT and multiply by 100. A healthy pour cost is between 18-25% for most bars.
Determine your contribution margin and compare
Subtract beverage costs and direct staff costs from your bar revenue. Compare this percentage with your food revenue contribution margin to see if your bar contributes proportionally.
✨ Pro tip
Track your top 3 cocktails' pour costs weekly for 8 weeks. These drinks often make or break bar profitability since they command premium prices but require precise ingredient control.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What if my bar loses money but guests stay longer?
Your bar creates indirect value through extended stays and higher food revenue. Calculate how much additional food revenue guests generate when they also drink. If a guest who drinks spends €15 more on food, that changes everything.
Which beverages have the highest margin?
Soft drinks, coffee, and house cocktails typically deliver the highest margins. Beer and wines by the glass sit in the middle range, while premium spirits can be extremely profitable if priced correctly.
Should I include VAT in the pour cost calculation?
Never include VAT in your calculations. Alcoholic beverages carry 21% VAT, so that €3.00 beer becomes €2.48 excluding VAT for your pour cost math.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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