Premium gin is like upgrading from house paint to designer wallpaper - it looks impressive, but someone has to pay for it. Bar managers constantly wrestle with this dilemma: will customers actually shell out extra for top-shelf brands? Here's your step-by-step roadmap to crunch those numbers and find out.
The pour cost of premium gin
Pour cost works exactly like food cost, except it's for drinks. It shows what percentage of your cocktail price gets eaten up by alcohol costs. Premium gin naturally pushes this number higher than standard brands.
💡 Example:
Gin and tonic with Bombay Sapphire vs. Beefeater:
- Beefeater (€28/bottle): €1.40 per 5cl
- Bombay Sapphire (€42/bottle): €2.10 per 5cl
- Difference: €0.70 per cocktail
Calculate the minimum price increase
Maintaining your margin means raising cocktail prices. But how much? That depends entirely on your target pour cost percentage.
💡 Calculation:
Gin and tonic with Beefeater: €8.50 (incl. 21% VAT)
- Selling price excl. VAT: €7.02
- Gin costs: €1.40
- Pour cost: 19.9%
For Bombay Sapphire (€2.10 gin):
- Minimum price excl. VAT: €2.10 / 0.199 = €10.55
- Incl. 21% VAT: €12.77
- Rounded: €13.00
⚠️ Note:
Alcoholic beverages get hit with 21% VAT, not 9%. Always calculate your pour cost excluding VAT.
Test market acceptance
A €4.50 jump is no joke. Test whether customers will actually bite by offering premium gin alongside your standard option.
- List both options on your menu
- Train staff to suggest the premium choice
- Track upgrade rates religiously
- Calculate total revenue impact
Alternative strategies
If that price increase makes customers run for the hills, you've got options:
💡 Option 1 - Accept a lower margin:
Gin and tonic for €11.00 with Bombay Sapphire:
- Selling price excl. VAT: €9.09
- Pour cost: €2.10 / €9.09 = 23.1%
- Still within acceptable range (18-25%)
Calculate total impact
After 4 weeks, crunch the real numbers. From years of working in professional kitchens, I've learned that theory means nothing until you see actual sales data.
💡 Calculation example:
20 premium gin and tonics per week at €11.00:
- Extra revenue: 20 × €2.50 = €50/week
- Extra margin: 20 × €1.80 = €36/week
- Per year: €1,872 extra margin
Tools like KitchenNmbrs let you track pour costs across all cocktails and spot which premium options actually deliver profits.
How do you calculate whether premium gin is profitable? (step by step)
Calculate your current pour cost
Divide the cost of your gin per cocktail by your selling price excluding VAT. Multiply by 100 to get the percentage.
Determine the new minimum price
Divide the cost of premium gin by your desired pour cost percentage. This gives you the minimum selling price excluding VAT.
Test market acceptance
Offer both options and measure how many guests upgrade to premium. Calculate the total impact on your revenue and margin.
✨ Pro tip
Run a 3-week test with Hendrick's as your featured premium gin at €12 per G&T. Track exactly how many customers choose it over your house brand - you need at least 18 premium sales per week to justify the menu change.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
What's an acceptable pour cost for premium gin?
Premium spirits typically run 18-25% pour cost. That's slightly higher than standard brands (15-20%) because customers expect to pay for quality. Don't stress if you hit 25% - it can still be profitable.
Should I calculate pour cost with or without VAT?
Always exclude VAT from your calculations. Alcoholic beverages get taxed at 21%, so divide your menu price by 1.21 first. This gives you the real selling price for margin calculations.
How many customers actually upgrade to premium gin?
Upgrade rates vary wildly by venue, but 15-30% is realistic if your staff actively suggests it. The key is training your team to present it as an option, not an upsell. Price sensitivity matters too - keep the premium reasonable.
📚 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.
Calculate your cocktail costs down to the ml
Drink margins seem high, but spillage and free pours eat them up. KitchenNmbrs calculates the exact cost price of every cocktail and drink. Try it free.
Start free trial →