Your bar's pour costs could be bleeding €1,000+ annually without you realizing it. Most establishments stick with premium gin brands, assuming customers demand them, while smart operators quietly boost margins with quality house selections. The math behind this decision determines if you're maximizing profit or paying for brand recognition you don't need.
Why house brand gin creates profit opportunities
Drink margins often separate profitable bars from struggling ones. Premium gin brands charge for marketing budgets and brand recognition; house brands price based on actual product quality and distillation costs.
💡 Example comparison:
Known gin (Bombay Sapphire):
- Cost price: €28.00 per bottle
- Selling price G&T: €8.50 incl. VAT
- Number of G&Ts per bottle: 25
House brand gin (quality gin from local distillery):
- Cost price: €18.00 per bottle
- Selling price G&T: €8.00 incl. VAT
- Number of G&Ts per bottle: 25
The pour cost calculation
Pour cost represents the drink equivalent of food cost percentages. It shows what portion of your selling price goes directly to the spirit itself, excluding mixers and garnishes.
Pour cost formula:
Pour cost % = (Gin costs per G&T / Selling price G&T excl. VAT) × 100
💡 Calculation known brand:
Bombay Sapphire example:
- Gin costs per G&T: €28.00 / 25 = €1.12
- Selling price excl. 21% VAT: €8.50 / 1.21 = €7.02
- Pour cost: (€1.12 / €7.02) × 100 = 16.0%
💡 Calculation house brand:
House brand gin example:
- Gin costs per G&T: €18.00 / 25 = €0.72
- Selling price excl. 21% VAT: €8.00 / 1.21 = €6.61
- Pour cost: (€0.72 / €6.61) × 100 = 10.9%
⚠️ Note:
Always calculate with the price excluding VAT. Alcoholic beverages carry 21% VAT, not 9% like food items.
Calculate total margin per G&T
Pour cost tells part of the story, but you need the complete picture including tonic, ice, garnish, and labor considerations. Most kitchen managers discover too late that the smallest cost components often add up to significant annual differences.
💡 Complete cost price known brand:
- Gin: €1.12
- Tonic (200ml): €0.45
- Garnish (lime): €0.08
- Ice: €0.05
Total drink costs: €1.70
Margin: €7.02 - €1.70 = €5.32 per G&T (75.8%)
💡 Complete cost price house brand:
- Gin: €0.72
- Tonic (200ml): €0.45
- Garnish (lime): €0.08
- Ice: €0.05
Total drink costs: €1.30
Margin: €6.61 - €1.30 = €5.31 per G&T (80.3%)
Impact on annual basis
Individual G&T differences seem minor, but they compound dramatically over 12 months. Suppose you sell 50 G&Ts weekly:
- Known brand: 50 × €5.32 × 52 = €13,832 annual profit
- House brand: 50 × €5.31 × 52 = €13,806 annual profit
This example shows minimal difference because the house brand sells at a lower price point. But pricing your house brand equal to premium options changes everything:
💡 House brand at known brand price:
House brand gin for €8.50 (same as known brand):
- Drink costs: €1.30
- Selling price excl. VAT: €7.02
- Margin: €5.72 per G&T (81.5%)
Extra profit per year: 50 × (€5.72 - €5.32) × 52 = €1,040
Risks of house brand gin
House brands aren't without drawbacks that need careful consideration:
- Brand recognition gaps: Customers might specifically request familiar names
- Quality assumptions: Some guests equate unknown brands with inferior products
- Supply chain dependency: Known gins offer multiple supplier options
- Marketing effort required: You'll need to educate staff and customers about quality
⚠️ Note:
Run your house brand alongside existing options initially. Monitor customer response before making complete switches.
The decision matrix
Use these criteria for your evaluation:
- Margin improvement > €500 annually: Justifies the transition effort
- Quality matches expectations: Conduct blind taste tests with trusted customers
- Supplier reliability confirmed: Verify consistent delivery capabilities
- Customer base receptive: Trendy venues vs. traditional cocktail establishments
Food cost calculators let you compare multiple gin options side-by-side, showing pour costs and margins without manual calculations.
How do you calculate whether house brand gin is more profitable? (step by step)
Calculate the pour cost of your current gin
Divide the cost price of a bottle by the number of G&Ts you get from it (usually 25). Divide this by your selling price excluding 21% VAT and multiply by 100 for the percentage.
Calculate the pour cost of the house brand
Do the same calculation for the house brand you're considering. Don't forget to include tonic, garnish, and ice in the total drink costs per G&T.
Calculate the difference on an annual basis
Multiply the margin difference per G&T by the number of G&Ts you sell per week and by 52 weeks. If the difference is more than €500 per year, it's worth testing.
✨ Pro tip
Track your house brand sales for exactly 6 weeks at a 10% discount compared to premium options. If weekly volume exceeds 40% of total gin sales, gradually increase the price by €0.25 monthly until it matches your premium tier.
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?
No, always calculate using selling prices excluding VAT. Alcoholic beverages carry 21% VAT, so divide your menu price by 1.21 to get the pre-tax amount.
How many G&Ts can I make from one bottle of gin?
A standard 70cl bottle yields approximately 25 G&Ts using 2.8cl gin per drink. Some establishments use 3cl pours, which produces about 23 G&Ts per bottle.
What pour cost percentage should I target for gin?
Typical gin pour costs range between 15% and 25%. Below 15% might indicate room for price reduction or portion increases to drive volume. Above 25% suggests margin optimization opportunities.
📚 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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