Most bar owners think they know which drinks make money - they don't. Without proper monthly calculations, you're flying blind on profitability. Your gut feeling about margins can cost you thousands in lost profits.
What is pour cost and why does it matter?
Pour cost works exactly like food cost, but for beverages. It reveals what percentage of your selling price goes toward buying alcohol. A solid pour cost for alcoholic drinks runs between 18% and 25%.
💡 Example:
You sell a beer for €3.00 (incl. 21% VAT).
- Selling price excl. VAT: €3.00 / 1.21 = €2.48
- Purchase price per bottle: €0.45
Pour cost: (€0.45 / €2.48) × 100 = 18.1%
⚠️ Note:
Alcoholic drinks carry 21% VAT, not 9%. Always calculate excluding VAT for accurate pour cost numbers.
Gather all drink sales from the past month
You'll need three data sources to nail down profitability:
- Cash register data: Sales volume per drink category
- Purchase invoices: What you bought and paid
- Inventory counts: Stock levels at month start and end
Skip any of these three, and your calculations become worthless guesswork.
Calculate your total drink revenue excl. VAT
Pull your cash register report and total all drink sales. Pay attention to VAT rates - they vary by drink type:
💡 Example monthly bar revenue:
- Beer: €8,500 incl. 21% VAT = €7,025 excl. VAT
- Wine: €6,200 incl. 21% VAT = €5,124 excl. VAT
- Soft drinks: €2,100 incl. 9% VAT = €1,927 excl. VAT
- Coffee: €1,800 incl. 9% VAT = €1,651 excl. VAT
Total drink revenue excl. VAT: €15,727
Calculate your actual drink purchases
Your real drink costs aren't just what you ordered. You must account for inventory changes:
Formula: Actual purchases = Purchased + Beginning inventory - Ending inventory
💡 Example inventory adjustment:
- Purchased in March: €3,200
- Inventory March 1: €2,800
- Inventory March 31: €2,400
Actual purchases: €3,200 + €2,800 - €2,400 = €3,600
Calculate your bar profitability
Now you can determine your real bar profit:
- Gross bar profit: Drink revenue excl. VAT - Actual drink purchases
- Pour cost %: (Actual drink purchases / Drink revenue excl. VAT) × 100
- Gross margin %: 100% - Pour cost %
💡 Complete example:
- Drink revenue excl. VAT: €15,727
- Actual drink purchases: €3,600
- Gross bar profit: €15,727 - €3,600 = €12,127
- Pour cost: (€3,600 / €15,727) × 100 = 22.9%
Gross margin: 77.1%
Analyze by drink category
Break down your analysis by drink type for the full picture. From years of working in professional kitchens, I've seen how different categories perform:
- Beer: Typical pour cost 18-22%
- Wine by the glass: Typical pour cost 20-25%
- Cocktails: Typical pour cost 15-20%
- Soft drinks: Typical pour cost 10-15%
⚠️ Note:
For cocktails, count every ingredient: spirits, mixers, fruit, ice and garnish. Don't forget labor intensity - cocktails demand more prep time.
Warning signs that your bar isn't generating enough
Watch for these red flags in your monthly numbers:
- Pour cost above 28%: Your prices are too low or purchase costs too high
- Wild month-to-month swings: Possible theft or inventory leakage
- Inventory climbing monthly: You're overbuying or sales are dropping
- Register sales don't match inventory drops: Control issues
How do you calculate your bar's profitability? (step by step)
Collect your cash register data and split by drink type
Pull the total drink sales from the past month from your cash register system. Split this into alcoholic (21% VAT) and non-alcoholic (9% VAT). Convert everything to prices excl. VAT.
Add up your actual drink purchases
Get all your drink purchase invoices and add them up. Adjust for inventory changes: purchased + beginning inventory - ending inventory = actual purchases.
Calculate your pour cost and gross bar profit
Pour cost = (actual purchases / revenue excl. VAT) × 100. Gross bar profit = revenue excl. VAT - actual purchases. A healthy pour cost is between 18-25%.
✨ Pro tip
Track your 3 highest-volume drinks weekly for the next 30 days. These usually represent 60% of your bar revenue - nail their profitability and you control most of 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 pour cost calculation?
Never calculate with VAT included. Alcoholic drinks carry 21% VAT, non-alcoholic drinks 9%. Always divide purchase costs by selling price excluding VAT for accurate pour cost percentages.
What is a healthy pour cost for my bar?
Alcoholic drinks should run 18-25% pour cost. Beer typically hits around 20%, while cocktails can run lower (15-20%) thanks to higher selling prices and premium positioning.
How often should I check my bar profitability?
Monthly for overall trends, weekly for your top sellers. If pour cost jumps suddenly, you might have theft, over-pouring, or inventory control problems that need immediate attention.
Should I include ice and garnish in cocktail costs?
Absolutely include everything: spirits, mixers, fruit, ice, garnish, even straws. Only by counting all ingredients will you get true cost prices and accurate profitability numbers.
📚 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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