Beverage package margins make or break event profitability. Many organizers forget the 21% VAT on alcohol, losing money without knowing it. Here's the step-by-step calculation to determine your actual margin.
What is a beverage package margin?
A beverage package margin shows the difference between your drink costs and what you charge customers. For events, you charge per person rather than per drink consumed.
? Example:
Corporate drinks for 50 people, 3 hours:
- Price per person: €25.00 incl. VAT
- Beverage cost: €8.50 per person
- Revenue: 50 × €25 = €1,250
- Cost of goods: 50 × €8.50 = €425
Gross margin: €825 (66%)
Process VAT correctly (critical!)
Alcoholic beverages carry 21% VAT, not 9%. Many organizers miss this detail. You must calculate using prices excluding VAT for accurate margins.
⚠️ Important:
Beer, wine and spirits carry 21% VAT. Soft drinks and juices in packages have 9% VAT. Calculate these separately for precise margins.
Formula for beverage package margin
Margin % = ((Selling price excl. VAT - Cost of goods) / Selling price excl. VAT) × 100
For alcoholic beverages:
- Selling price excl. VAT = Package price / 1.21
- Cost of goods = all beverages per person
- Other costs = staff, transport, materials
? Example calculation:
Beverage package €30 incl. 21% VAT:
- Price excl. VAT: €30 / 1.21 = €24.79
- Cost of goods: €9.50 per person
- Margin: ((€24.79 - €9.50) / €24.79) × 100 = 61.7%
Typical cost of goods per person
For a standard 3-hour beverage package, use these guidelines:
- Beer: €1.50 - €2.50 per glass (depending on brand)
- Wine: €2.00 - €4.00 per glass
- Soft drink: €0.80 - €1.20 per glass
- Average consumption: 4-6 drinks per person per 3 hours
? Consumption calculation example:
Per person in 3 hours (average 5 drinks):
- 3 beers at €2.00 = €6.00
- 1 wine at €3.00 = €3.00
- 1 soft drink at €1.00 = €1.00
Total cost of goods: €10.00 per person
Include other costs
Besides drinks, you've got additional costs that affect your margin:
- Staff: bartender, on-site service
- Transport: beverages to location, materials back
- Materials: taps, glasses, ice cubes, garnish
- Time: preparation, setup, breakdown
Convert these costs to per-person amounts and subtract from your gross margin to get net margin. This is the kind of thing you only learn after closing your first month at a loss.
Standard margins in practice
For beverage packages at events, these margins are typical:
- Gross margin (beverages only): 60-75%
- Net margin (after all costs): 35-50%
- For large events (100+ people): higher net margin due to economies of scale
- For small events (20- people): lower net margin due to fixed costs
⚠️ Important:
Below 35% net margin? You're probably not earning enough. Check that you've included all costs and that your purchase prices are correct.
Track margins digitally
With systems like KitchenNmbrs, you can set up beverage packages as recipes. You enter quantities per person, and the app calculates your cost of goods and margin automatically. This shows immediately if a package is profitable.
Especially useful if you regularly do events and offer different packages. You can see which package generates the most profit and adjust prices accordingly.
Related articles
How do you calculate the margin on a beverage package? (step by step)
Determine your selling price excluding VAT
Divide your package price by 1.21 (for alcohol) or 1.09 (for non-alcoholic). This is your actual selling price on which you calculate your margin. For example: €30 incl. VAT becomes €24.79 excl. VAT.
Calculate your total cost of goods per person
Add up all the drinks you charge per person: beer, wine, soft drink. Assume an average of 4-6 drinks per person per 3 hours. For example: 3 beers (€6) + 1 wine (€3) + 1 soft drink (€1) = €10 per person.
Apply the formula and deduct other costs
Gross margin = ((€24.79 - €10) / €24.79) × 100 = 59.6%. Deduct your costs for staff, transport and materials for your net margin. Aim for a minimum of 35% net margin.
✨ Pro tip
Calculate your beverage costs weekly for 4 consecutive weeks to establish baseline consumption patterns. This gives you accurate per-person costs that account for seasonal variations and event types.
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
Why do I need to calculate 21% VAT on beverage packages?
How many drinks should I calculate per person?
What is a good net margin on beverage packages?
Should I include staff and transport in my cost of goods?
Can I offer different packages with different margins?
How do I handle mixed beverage packages with different VAT rates?
What's the difference between gross and net margin on beverage packages?
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
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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