Think of your lunch drinks menu like a different playlist than your dinner one. Guests sip differently at midday - more coffee and fresh juices, less wine and cocktails. This shift completely changes your profit picture per glass.
Why lunch drinks have different margins
Your guests drink differently at lunch than at dinner. More coffee, tea, soft drinks and juices. Less wine and beer. This means different cost prices and different margins per drink.
- Coffee: high margin (85-90%)
- Soft drinks: average margin (70-80%)
- Fresh juices: lower margin (60-70%)
- Alcoholic drinks: standard margin (75-82%)
The basic formula for drink margin
The same formula applies to every drink as with food, but with 21% VAT for alcohol and 9% VAT for non-alcoholic drinks in restaurants.
💡 Formula:
Drink margin % = ((Selling price excl. VAT - Cost of goods) / Selling price excl. VAT) × 100
Note: always use the price EXCLUDING VAT for your calculation.
Calculate VAT correctly per drink type
The biggest difference from food: alcoholic drinks have 21% VAT, non-alcoholic drinks 9% VAT.
⚠️ Note:
Beer, wine and all alcoholic drinks: 21% VAT. Coffee, tea, soft drinks, juices: 9% VAT. This makes a big difference in your margin calculation.
- Alcoholic drinks: Menu price ÷ 1.21 = excl. VAT
- Non-alcoholic drinks: Menu price ÷ 1.09 = excl. VAT
Practical calculation per drink type
Here's how to calculate margins for typical lunch drinks with real numbers.
💡 Example - Fresh orange juice:
- Menu price: €4.50 (incl. 9% VAT)
- Excl. VAT: €4.50 ÷ 1.09 = €4.13
- Cost of goods: €1.40 (oranges, juicer electricity)
Margin: ((€4.13 - €1.40) ÷ €4.13) × 100 = 66.1%
💡 Example - Glass of house wine:
- Menu price: €6.00 (incl. 21% VAT)
- Excl. VAT: €6.00 ÷ 1.21 = €4.96
- Cost of goods: €0.90 (150ml from bottle of €6.75)
Margin: ((€4.96 - €0.90) ÷ €4.96) × 100 = 81.9%
💡 Example - Cappuccino:
- Menu price: €3.25 (incl. 9% VAT)
- Excl. VAT: €3.25 ÷ 1.09 = €2.98
- Cost of goods: €0.35 (coffee, milk, energy)
Margin: ((€2.98 - €0.35) ÷ €2.98) × 100 = 88.3%
Calculate average lunch margin
For your total lunch drinks menu, you calculate the weighted average margin. This gives you insight into your total drink profitability during lunch.
- Add up all drink sales during lunch hours
- Add up all cost of goods for those drinks
- Calculate: (Total sales excl. VAT - Total cost of goods) ÷ Total sales excl. VAT × 100
Optimize margins for lunch
Lunch drinks have different optimization opportunities than dinner drinks. Focus on volume and speed. But there's a pattern we see repeatedly in restaurant financials - places that nail their coffee margins often see 15-20% higher lunch profitability overall.
- Promote high margin drinks: Coffee, tea, homemade lemonade
- Bundle with lunch menus: Drink + lunch for fixed price increases total margin
- Price fresh juices strategically: Higher price but emphasize fresh/healthy
- Alcohol-free alternatives: Mocktails often have higher margins than beer
Using tools for drink margins
Food cost calculators record all drinks with correct VAT calculation per type. You see your margin per drink directly and can calculate different scenarios for your lunch menu.
These tools automatically calculate whether you need to use 9% or 21% VAT and show you real-time margins. This way you always know which drinks generate the most revenue during lunch hours.
How do you calculate the margin on lunch drinks? (step by step)
Determine the correct VAT per drink type
Check whether your drink is alcoholic (21% VAT) or non-alcoholic (9% VAT). Calculate the price excluding VAT by dividing by 1.21 or 1.09. This is crucial for accurate margin calculation.
Calculate the exact cost of goods per portion
Add up all costs: the drink itself, any additions (milk, sugar, ice cubes), energy for preparation. For fresh juices: fruit + energy for juicing. For coffee: beans + milk + machine energy.
Apply the margin formula
Use the formula: ((Selling price excl. VAT - Cost of goods) ÷ Selling price excl. VAT) × 100. Check whether your margin is realistic: coffee 85-90%, soft drinks 70-80%, fresh juices 60-70%, alcohol 75-82%.
✨ Pro tip
Track your top 3 lunch beverages over the next 14 days and recalculate their exact margins weekly. You'll often find one drink that's secretly eating your profits.
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
Which VAT applies to which lunch drinks?
All alcoholic drinks (beer, wine, cocktails): 21% VAT. All non-alcoholic drinks in restaurants (coffee, tea, soft drinks, juices): 9% VAT. For takeaway, 21% VAT applies to everything.
What is a good margin for lunch drinks?
Coffee and tea: 85-90%, soft drinks: 70-80%, fresh juices: 60-70%, alcoholic drinks: 75-82%. On average, your lunch drinks should hit around 75-80% margin.
How do I calculate the margin of fresh orange juice?
Add up all costs: fruit, energy for juicing, possibly ice. Divide by the number of glasses you get from the amount of fruit. Calculate with 9% VAT for the selling price excluding VAT.
Should I charge different prices for lunch and dinner?
You may, but it's not required. Many restaurants use the same drink prices but adjust the selection. Lunch focuses more on coffee, tea and juices while dinner emphasizes wine and cocktails.
How do bundled lunch deals affect drink margins?
Bundling typically reduces your per-drink margin but increases total transaction value. Calculate the combined margin of food + drink together, not separately.
Do homemade vs bottled drinks have different margin calculations?
Yes - homemade requires calculating ingredient costs, labor time, and equipment depreciation. Bottled drinks have simpler cost calculations but often lower margins due to wholesale markups.
How often should I recalculate lunch drink margins?
Review monthly or whenever supplier costs change significantly. Fresh juice margins fluctuate with seasonal fruit prices, while coffee margins stay more stable.
📚 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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