Managing bar profitability is like conducting an orchestra – every drink plays a different note in your profit symphony. Draft beer might sing at 20% pour cost while premium cocktails can hit 35%. You can master the step-by-step process to calculate margin per drink and spot your highest-earning beverages.
What is pour cost and how do you calculate it?
Pour cost mirrors food cost but applies specifically to beverages. It reveals what percentage of your selling price covers alcohol and mixer purchases.
Pour cost formula:
Pour cost % = (Drink purchase costs / Selling price excl. VAT) × 100
⚠️ Note:
Alcoholic beverages carry 21% VAT, not the 9% applied to food. Always calculate: selling price / 1.21 for the VAT-excluded price.
Calculate the margin per drink type
Each drink category follows distinct margin patterns. Here's how you determine profitability across different types:
Draft beer
💡 Example:
Heineken 25cl draft:
- Selling price: €2.80 incl. 21% VAT
- Selling price excl. VAT: €2.80 / 1.21 = €2.31
- Purchase price per 25cl: €0.52
Pour cost: (€0.52 / €2.31) × 100 = 22.5%
Wine by the glass
💡 Example:
Sauvignon Blanc 15cl:
- Selling price: €5.50 incl. 21% VAT
- Selling price excl. VAT: €5.50 / 1.21 = €4.55
- Bottle costs €12, yields 5 glasses of 15cl = €2.40 per glass
Pour cost: (€2.40 / €4.55) × 100 = 52.7%
Cocktails
Cocktail calculations require totaling every component: spirits, mixers, garnish, and ice.
💡 Example:
Mojito:
- Selling price: €9.50 incl. 21% VAT = €7.85 excl. VAT
- Rum (5cl): €1.20
- Lime juice (2cl): €0.15
- Sugar syrup (1cl): €0.08
- Mint + ice: €0.12
Total purchase costs: €1.55
Pour cost: (€1.55 / €7.85) × 100 = 19.7%
Which drinks generate the most profit?
Rank beverages by absolute margin per glass, not pour cost percentage alone. This approach reveals a pattern we see repeatedly in restaurant financials – expensive items with moderate percentages often outperform cheap items with low percentages.
- Absolute margin = Selling price excl. VAT - Purchase costs
- An expensive cocktail at 25% pour cost can generate more euros than cheap beer at 20%
- Prioritize drinks you sell frequently AND that deliver solid margins
💡 Example comparison:
Beer vs. Cocktail:
- Beer: €2.31 - €0.52 = €1.79 margin
- Mojito: €7.85 - €1.55 = €6.30 margin
The mojito delivers 3.5× more profit per glass!
Practical tips for higher drink margins
- Promote high-margin drinks: Position cocktails prominently on your menu
- Train your staff: Encourage them to suggest signature cocktails
- Monitor your tap system: Excessive foam equals wasted money
- Control pour sizes: 5cl rum means exactly 5cl, not 6cl
- Select strategic wines: Purchase bottles that divide cleanly into 5 glasses
Tools for drink margin analysis
Modern bar management software automatically calculates pour costs across your entire beverage menu. You can instantly identify which cocktails, wines and beers deliver the highest profitability. This data helps you optimize your bar menu for maximum earnings.
How do you calculate drink margin? (step by step)
Gather all purchase prices
Note the purchase price per liter of all your drinks. For cocktails add up all ingredients: spirits, mixers, garnish. Don't forget the ice.
Calculate the cost per serving
Divide the purchase price by the number of servings. A bottle of wine at €12 yields 5 glasses = €2.40 per glass. A liter of gin at €40 yields 20 double shots = €2.00 per cocktail.
Calculate the pour cost percentage
Use the formula: (Purchase costs / Selling price excl. VAT) × 100. Note: alcohol falls under 21% VAT. Divide your menu price by 1.21 to get the price excluding VAT.
✨ Pro tip
Analyze your top 8 selling drinks over the past 30 days first. If these beverages maintain healthy margins, you've secured roughly 75% of your bar's profit potential.
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
What's a reasonable pour cost for cocktails?
Most cocktails should fall between 18-25% pour cost. Premium cocktails using expensive spirits might run higher, but they compensate with greater absolute margin per glass.
Should I include VAT in drink margin calculations?
Never include VAT in your margin calculations. Alcoholic beverages carry 21% VAT, so divide your menu price by 1.21 to get the VAT-excluded amount for accurate calculations.
Why does wine show such high pour costs?
Wine typically runs 45-60% pour cost because you purchase whole bottles but sell individual glasses. If bottles don't sell completely, you face losses. Cocktails offer more flexibility since you mix each serving individually.
How frequently should I review drink pricing?
Review your purchase prices monthly since suppliers adjust costs regularly. If your purchase price increases but selling price stays flat, your margin automatically shrinks.
Which beverages deliver the highest margins?
Cocktails made with house spirits, draft beer, and signature drinks usually provide the strongest margins. Premium wines by the glass can also perform well if you move them quickly.
How do I handle seasonal fluctuations in ingredient costs?
Track your core ingredients monthly and adjust cocktail recipes or prices accordingly. Consider seasonal menu rotations that use ingredients at their lowest cost points.
What's the impact of waste on drink margins?
Beverage waste can destroy margins faster than food waste due to higher ingredient costs. A single over-pour or spilled premium cocktail can eliminate the profit from three properly made drinks.
📚 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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