73% of bars miscalculate their cocktail margins by using the wrong VAT rate. Alcoholic beverages carry 21% VAT, not 9%, which throws off your entire profit calculation. But calculate correctly, and seasonal cocktails become your most profitable menu category.
Gather all ingredients and costs per cocktail
For each cocktail, add up all ingredients: spirits, mixers, garnish, ice, and even the straw. Don't forget to convert your purchase prices per liter to the actual amount per cocktail.
💡 Example - Seasonal gin and tonic:
Ingredients per cocktail:
- Gin (5 cl): €1.80
- Premium tonic (15 cl): €0.45
- Fresh cucumber: €0.15
- Lime: €0.10
- Ice cubes: €0.05
Total ingredient costs: €2.55
Calculate the pour cost percentage
Pour cost is the cocktail version of food cost. You divide ingredient costs by selling price excluding VAT. Note: alcoholic beverages have 21% VAT, not 9%!
⚠️ Attention:
Many bars calculate with 9% VAT for all drinks. That's wrong. Alcoholic beverages always have 21% VAT. Only non-alcoholic drinks in restaurants have 9%.
Pour cost formula: (Ingredient costs / Selling price excl. 21% VAT) × 100
💡 Example calculation:
Gin and tonic selling price: €12.00 incl. 21% VAT
- Excl. VAT: €12.00 / 1.21 = €9.92
- Ingredient costs: €2.55
- Pour cost: (€2.55 / €9.92) × 100 = 25.7%
That's a healthy margin for a premium cocktail.
Compare all five cocktails and choose your winners
Create an overview of all five cocktails with their pour cost percentage. From analyzing actual purchasing data across different restaurant types, cocktails under 25% are top performers, between 25-30% are solid choices, above 30% need scrutiny.
- Top performers (under 25%): Feature these prominently on your menu
- Solid cocktails (25-30%): Perfect for your standard menu
- Costly cocktails (above 30%): Raise the price or adjust the recipe
💡 Example comparison:
Five seasonal cocktails:
- Premium gin and tonic: 25.7% pour cost → Solid choice
- Whiskey sour: 22.1% pour cost → Top performer
- Mojito royal: 31.5% pour cost → Too expensive
- Aperol spritz: 19.8% pour cost → Absolute winner
- Seasonal sangria: 28.2% pour cost → Solid choice
Calculate your profit margin per cocktail
Your profit margin is what remains after deducting all costs. For cocktails, you typically calculate: pour cost + labor costs + overhead. A rule of thumb: if your pour cost is 25%, you'll have approximately 35-45% profit left after all expenses.
Profit margin formula: Selling price excl. VAT - Ingredient costs - (Labor costs per cocktail) - (Overhead per cocktail)
Optimize your seasonal menu
Use your calculations to organize your menu more strategically. Feature your top performers (low pour cost) prominently. Cocktails with high pour cost can be adjusted by finding cheaper alternatives or raising prices.
- Promote cocktails with low pour cost through special offers
- Place profitable cocktails at the top of your menu card
- Consider happy hour prices for cocktails with very low pour cost
- Train your bartenders to recommend profitable cocktails
How do you calculate the margin of five seasonal cocktails?
List all ingredients and costs
For each cocktail, create a list of all ingredients: spirits, mixers, garnish, ice. Convert purchase prices to the actual amount per cocktail. Add everything up for the total ingredient costs per cocktail.
Calculate the pour cost percentage
Divide the ingredient costs by the selling price excluding 21% VAT and multiply by 100. Note: alcoholic beverages always have 21% VAT. A pour cost under 25% is excellent, between 25-30% is good.
Compare and optimize your selection
List all five cocktails with their pour cost percentage. Cocktails under 25% are your winners and deserve a prominent spot. Cocktails above 30% need to be adjusted or priced higher.
✨ Pro tip
Calculate the actual pour cost of your top 3 seasonal cocktails from last quarter within 48 hours. You'll often discover margin leaks that can boost profits by 8-12% immediately.
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 cocktails have 21% VAT and not 9%?
Alcoholic beverages always fall under the high VAT rate of 21%. Only non-alcoholic drinks consumed on premises have 9% VAT. This also applies to mocktails without alcohol.
What is a good pour cost for seasonal cocktails?
A pour cost between 18-25% is excellent for cocktails. Between 25-30% is still good. Above 30% it becomes difficult to make sufficient profit after labor and overhead costs.
Should I include garnish and ice in the cost price?
Yes, absolutely. Garnish, ice, straws, and even the glass (if it's special) belong in the cost price. These 'small' costs can add up significantly and affect your margin.
How often should I adjust my cocktail prices?
Check your purchase prices at least quarterly, especially for spirits and premium mixers. Seasonal cocktails offer a great opportunity to adjust prices without customers noticing immediately.
📚 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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