Most bar owners think premium spirits automatically kill their margins. Premium spirits can double your pour cost, but they often deliver higher absolute profits per cocktail. The real question isn't about pour cost—it's about total margin.
What is pour cost for cocktails?
Pour cost is the beverage version of food cost. It shows what percentage of your cocktail price goes to ingredients. Pour cost = (Ingredient costs / Selling price excl. VAT) × 100
Note: alcoholic beverages have 21% VAT, not 9% like food.
💡 Example: Gin Tonic
House brand variant:
- Gin (5cl): €1.20
- Tonic (15cl): €0.40
- Garnish: €0.15
Total ingredients: €1.75
Premium vs. house brand: the numbers
The difference in pour cost is dramatic. Premium brands cost 2-4x more per serving, but you can charge higher prices too.
💡 Example: Gin Tonic Comparison
House brand:
- Ingredients: €1.75
- Selling price: €7.50 incl. VAT (€6.20 excl.)
- Pour cost: 28.2%
- Margin: €4.45
Premium (Hendrick's):
- Ingredients: €4.20
- Selling price: €12.00 incl. VAT (€9.92 excl.)
- Pour cost: 42.3%
- Margin: €5.72
Difference in margin: €1.27 per cocktail
The strategic choice
Premium brands have higher pour costs but often deliver more profit per cocktail. This is a mistake that costs the average restaurant EUR 200-400 per month—they avoid premium spirits because of the pour cost percentage, missing out on higher absolute margins. The real question: does it sell enough to justify the higher ingredient cost?
⚠️ Heads up:
A higher pour cost doesn't automatically mean less profit. If you can charge €12 for premium vs. €7.50 for house brand, you earn more despite the higher pour cost.
Premium pays off here
Premium brands work in these situations:
- Higher-end clientele: Fine dining, cocktail bars, business dinners
- Brand recognition: Guests specifically order "Hendrick's Tonic"
- Experience focus: You're selling the experience, not just the drink
- Lower volumes: Higher margin per cocktail compensates for fewer sales
House brand wins here
House brands have advantages in these cases:
- Volume business: Café, sports bar, student crowd
- Price competition: Market is price-sensitive
- Mixed drinks: Brand taste gets masked in complex cocktails
- Fast turnover: High sales volume beats higher per-unit margin
💡 Example: Annual revenue impact
Say you sell 100 Gin Tonics per week:
- House brand: €4.45 × 100 × 52 = €23,140/year
- Premium: €5.72 × 80 × 52 = €23,808/year
Premium generates more, even with 20% lower sales.
The mix strategy
Many successful bars use a combination:
- House pour: House brand for basic cocktails and standard orders
- Premium shelf: 3-4 well-known brands for upselling
- Top shelf: 1-2 ultra-premium for special occasions
This way you offer choice without making inventory too complex.
Beverage cost tracking tools
Food cost calculators like KitchenNmbrs automatically calculate pour costs for all your cocktails. You see immediately which drinks are most profitable and can adjust prices if suppliers raise costs.
The software accounts for correct VAT rates (21% for alcohol) and shows your margin per cocktail in real-time.
How do you calculate cocktail margins? (step by step)
Calculate ingredient costs per cocktail
Add up all costs: spirit, mixer, garnish, ice. Calculate per exact amount (5cl gin, 15cl tonic). Don't forget small things like straws and napkins.
Determine your selling price excluding VAT
Divide your menu price by 1.21 to get the price excl. 21% VAT. So €12.00 incl. VAT becomes €9.92 excl. VAT.
Calculate pour cost and margin
Pour cost = (ingredient costs / selling price excl. VAT) × 100. Your margin is selling price excl. VAT minus ingredient costs. Aim for 18-25% pour cost.
✨ Pro tip
Track your top 5 cocktails' margins weekly for the next month. Premium brands often show 20-40% higher absolute profit despite higher pour costs—focus on total euros earned, not percentages.
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 good pour cost percentage for cocktails?
Typical pour cost runs 18-25%. Premium cocktails can hit 30%, while house brand cocktails should stay 15-22%. Your concept and clientele determine what works.
Should I include VAT in pour cost calculations?
No, always calculate excluding VAT. Alcoholic beverages carry 21% VAT. Divide your menu price by 1.21 to get the price excl. VAT for calculations.
How do I know if premium brands are worth stocking?
Compare absolute margin per cocktail, not just pour cost. If premium delivers €2 more margin but sells 30% less, you still earn more per cocktail sold. Test demand first with limited-time offerings.
📚 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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