Most bars lose money on cocktails because they don't calculate ingredient costs properly. You'll need purchase prices for tequila, triple sec and lime, plus exact quantities per drink. Many establishments forget the 21% VAT on alcohol, which throws off their entire profit margin.
What do you need for the calculation?
For an accurate cost price calculation of a Margarita you need the following data:
- Purchase prices of tequila, triple sec and lime
- Exact quantities per cocktail (in ml or grams)
- Number of servings you can make from a bottle
- Extra costs such as ice, salt and garnish
⚠️ Note:
Always calculate with the purchase price including 21% VAT for alcoholic beverages. This is a different VAT rate than for food (9%).
Calculate the costs per ingredient
Start by calculating the cost per milliliter for each ingredient. You do this by dividing the purchase price by the bottle size.
💡 Example calculation per ml:
Tequila bottle of 700ml costs €25.00 incl. VAT:
- Cost per ml: €25.00 ÷ 700ml = €0.036 per ml
- For 50ml tequila: 50 × €0.036 = €1.80
Calculate standard Margarita recipe
A classic Margarita consists of three main ingredients plus garnish. Calculate all costs per serving:
💡 Example: Complete cost price Margarita
Ingredients per cocktail:
- 50ml tequila (€25/700ml): €1.80
- 25ml triple sec (€18/500ml): €0.90
- 30ml fresh lime juice (€0.80/lime): €0.40
- Ice, salt, garnish: €0.15
Total cost price: €3.25 per Margarita
Calculate pour cost percentage
Pour cost is the equivalent of food cost for beverages. It shows what percentage of your selling price goes to ingredients.
Pour cost formula: (Ingredient costs ÷ Selling price excl. VAT) × 100
💡 Pour cost calculation:
Margarita selling price: €12.00 incl. 21% VAT
- Selling price excl. VAT: €12.00 ÷ 1.21 = €9.92
- Ingredient cost: €3.25
- Pour cost: (€3.25 ÷ €9.92) × 100 = 32.8%
This is on the high side. Based on real restaurant P&L data, standard pour cost for cocktails runs between 18-25%.
Optimize your cost price
If your pour cost is too high, you have several options to lower it:
- Increase selling price: Often the easiest solution
- Cheaper purchasing: Different supplier or larger volume
- Adjust portions: Slightly less alcohol per cocktail
- Optimize recipe: Less expensive triple sec, more lime juice
⚠️ Note:
Never lower the quality of your main ingredient (tequila). Guests will taste the difference and you'll damage your reputation.
How do you calculate the cost price of a Margarita? (step by step)
Gather all purchase prices
Note the purchase prices of tequila, triple sec and limes including VAT. Also include the costs of ice, salt and garnish. These small amounts add up across many cocktails.
Calculate costs per milliliter
Divide the purchase price by the bottle size. For example: €25 tequila ÷ 700ml = €0.036 per ml. Multiply this by the amount you use per cocktail.
Add up all ingredient costs
Sum all costs per ingredient into one total amount per cocktail. This is your cost price per Margarita. Then calculate your pour cost percentage by dividing by your selling price excluding VAT.
✨ Pro tip
Calculate your Margarita costs weekly for the first month after menu launch. Lime prices can swing 40% seasonally, and you'll want to adjust portions or pricing before it kills your margins.
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
Should I include VAT in my cost price calculation?
Yes, always calculate with purchase prices including VAT. For alcohol this is 21%. However, your selling price for the pour cost calculation must be excluding VAT.
What is a good pour cost for cocktails?
A standard pour cost for cocktails is between 18-25%. If you're above 30%, you're probably not earning enough on that cocktail. Premium cocktails can run slightly higher, but shouldn't exceed 28%.
How often should I update my cocktail prices?
Check your purchase prices at least every 3 months. Alcohol prices can fluctuate due to excise tax changes or supplier increases. Some bars review monthly during volatile periods.
📚 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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