New cocktails can wreck your beverage margins if you don't calculate their impact first. Most bar owners add drinks without knowing how they'll affect total costs. Learn the exact steps to calculate a new drink's impact on your beverage cost percentage.
What is beverage cost?
Beverage cost is the percentage of your drink revenue that goes toward purchasing drinks. Just like food cost for meals, but for all drinks: beer, wine, spirits, soft drinks and coffee.
💡 Beverage cost formula:
Beverage cost % = (Drink purchase costs / Drink revenue excl. VAT) × 100
Note: alcoholic drinks have 21% VAT, non-alcoholic 9%.
The impact of one new drink
Adding a new drink changes your total beverage cost. This depends on:
- The pour cost of the new drink
- How many you sell
- Which other drinks it replaces
⚠️ Watch out:
A drink with high pour cost can destroy your total margin if it becomes popular. Always calculate first before adding it to your menu.
Calculate the pour cost of the new drink
Pour cost is the 'food cost' of drinks. For cocktails, add up all ingredients:
💡 Example: Mojito
Selling price: €9.50 incl. 21% VAT = €7.85 excl. VAT
- White rum (5cl): €1.20
- Lime (half): €0.30
- Mint (sprig): €0.15
- Sugar: €0.05
- Soda: €0.10
Pour cost: (€1.80 / €7.85) × 100 = 22.9%
Estimate the expected volume
How many will you sell per week? Look at similar drinks on your menu. A new cocktail often sells 10-30 units per week in the first month. This is a mistake that costs the average restaurant EUR 200-400 per month - they overestimate demand and don't account for ingredient waste.
Calculate the impact on your total beverage cost
Now you can work out what the new drink does to your total beverage cost:
💡 Example calculation:
Current situation per week:
- Drink revenue: €3,500 excl. VAT
- Purchase costs: €875
- Beverage cost: 25%
With 20 mojitos added:
- Extra revenue: 20 × €7.85 = €157
- Extra purchase: 20 × €1.80 = €36
- New totals: €3,657 revenue, €911 purchase
New beverage cost: (€911 / €3,657) × 100 = 24.9%
Watch out for cannibalization of other drinks
Guests don't always order extra. Often they replace another drink. If your mojito replaces a beer (lower pour cost), your total beverage cost rises more than calculated.
⚠️ Watch out for cannibalization:
If your mojito (22.9% pour cost) replaces a beer (15% pour cost), your beverage cost rises. Factor this into your impact analysis.
Use digital tools for tracking
Manual tracking quickly becomes complex. With an app you can automatically calculate pour costs and monitor the impact of new drinks on your total beverage cost.
How do you calculate the impact of a new drink? (step by step)
Calculate the pour cost of the new drink
Add up all ingredient costs and divide by the selling price excl. VAT. For alcoholic drinks: price incl. VAT / 1.21. For non-alcoholic: / 1.09.
Estimate the expected sales volume per week
Look at similar drinks on your menu. New cocktails often sell 10-30 units per week. Be realistic in your estimate.
Calculate the impact on your total beverage cost
Add the extra revenue and purchase costs to your current figures. Calculate your new beverage cost percentage. Watch whether the new drink replaces other drinks.
✨ Pro tip
Track your new drink's actual sales against projections for exactly 3 weeks. If it's selling 40% less than expected, either promote it harder or remove it before it hurts 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
What's a good pour cost for cocktails?
A typical pour cost for cocktails is between 18-25%. Beer and wine are often between 15-20%. Spirits neat often have 12-18% pour cost.
Should I include VAT in my pour cost calculation?
No, always calculate excl. VAT. Alcoholic drinks have 21% VAT, so divide the menu price by 1.21. Non-alcoholic drinks in your café have 9% VAT.
How often should I check my beverage cost?
Check your total beverage cost weekly. With new drinks: monitor the first month extra closely to see if your estimate is correct and adjust if needed.
What if my new drink has too high a pour cost?
You have three options: raise the selling price, lower ingredient costs (smaller portion or cheaper brand), or accept lower margin if it drives high volume.
How do I track which drinks replace other drinks?
Compare your sales figures before and after introducing the new drink. If your beer sales drop while cocktail sales rise, there's cannibalization happening.
Should I factor in garnish waste for cocktails?
Yes, add 5-10% to your ingredient cost for waste. Mint wilts, limes dry out, and bartenders sometimes mess up drinks during busy periods.
How do I calculate pour cost for wine by the glass?
Divide bottle cost by number of glasses you pour. A €15 bottle yielding 5 glasses has €3 pour cost per glass, plus factor in oxidation losses.
📚 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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