Your drink's selling price directly impacts profit margins. Most restaurant owners guess or use rough estimates, missing out on potential revenue. Learn the exact formulas and margins for calculating profitable drink prices.
Ever wonder if you're charging enough for that cocktail or beer? Most restaurant owners guess their drink prices or rely on outdated rules of thumb. But with the right calculation method, you can maximize profits without losing customers.
Difference between alcoholic and non-alcoholic drinks
Your drink's alcohol content affects the calculation because of VAT rates:
- Alcoholic drinks: 21% VAT
- Non-alcoholic drinks in restaurant: 9% VAT
- Non-alcoholic drinks takeaway: 9% VAT
The basic formula for drink prices
Similar to food pricing, you'll calculate selling price based on your target margin:
Minimum selling price excl. VAT = Purchase price / (Desired margin % / 100)
Selling price incl. VAT = Minimum price excl. VAT × (1 + VAT%)
💡 Example: Calculating a beer
Your beer costs €1.20 per bottle and you want a 25% drink margin:
- Minimum price excl. VAT: €1.20 / 0.25 = €4.80
- Price incl. 21% VAT: €4.80 × 1.21 = €5.81
You'd sell for €5.85 (rounded)
Standard margins per drink type
Different beverages work with different margins in the hospitality industry:
- Beer: 20-30% purchase margin
- Wine per glass: 25-35% purchase margin
- Soft drink: 15-25% purchase margin
- Coffee: 10-20% purchase margin
- Cocktails: 20-30% total ingredient costs
⚠️ Note:
With wine per glass, calculate using the price of one glass, not the entire bottle. A bottle costing €12 with 6 glasses means €2 per glass.
Special calculation for cocktails
Cocktails require more complex calculations since you're combining multiple ingredients. From tracking this across dozens of restaurants, I've found that missing even small ingredients can throw off your margins significantly:
💡 Example: Mojito
Ingredients per cocktail:
- Rum (5cl): €1.80
- Lime (half): €0.25
- Mint: €0.15
- Sugar: €0.05
- Soda: €0.20
Total ingredient costs: €2.45
At 25% margin: €2.45 / 0.25 = €9.80 excl. VAT
Selling price: €9.80 × 1.21 = €11.86 (rounded €11.95)
Wine per glass vs. per bottle
With wine, you have two options: sell per glass or whole bottles. Per glass generates higher profits:
💡 Example: Wine bottle €15 purchase
Scenario 1 - Selling whole bottle:
- Purchase: €15
- At 30% margin: €15 / 0.30 = €50 excl. VAT
- Selling price: €50 × 1.21 = €60.50
Scenario 2 - Selling per glass (6 glasses):
- Cost per glass: €15 / 6 = €2.50
- At 30% margin: €2.50 / 0.30 = €8.33 excl. VAT
- Per glass: €8.33 × 1.21 = €10.08 (rounded €10.50)
- 6 glasses × €10.50 = €63.00
Selling per glass generates €2.50 more
Rounding prices for the menu
Always calculate precisely, but round for your final menu:
- €5.81 becomes €5.85 or €5.95
- €11.86 becomes €11.95 or €12.00
- Avoid prices like €5.83 or €11.47
⚠️ Note:
Always round up, never down. You'll need those extra cents for unexpected costs.
Check: is your margin still correct?
After rounding, verify that your margin remains on target:
💡 Example: Check calculation
Beer purchase €1.20, selling price €5.95 incl. VAT:
- Selling price excl. VAT: €5.95 / 1.21 = €4.92
- Actual margin: (€1.20 / €4.92) × 100 = 24.4%
That works fine - you targeted 25% and achieved 24.4%
How do you calculate the selling price of a drink?
Determine your purchase price per serving
Check what you pay for one glass, bottle or cocktail. With wine per glass divide the bottle price by the number of glasses (usually 6). With cocktails add up all ingredients.
Choose your desired margin percentage
Beer and soft drinks usually 20-30%, wine 25-35%, cocktails 20-30%. The lower the percentage, the more you earn per drink. Check what's standard in your type of business.
Calculate the minimum selling price
Divide your purchase price by your desired margin. For example: €1.20 purchase / 0.25 margin = €4.80 excl. VAT. This is your minimum selling price to achieve your desired margin.
Add VAT and round
Alcohol gets 21% VAT, non-alcoholic 9%. Multiply by 1.21 or 1.09. Round the final result to a nice price for your menu, but always round up.
✨ Pro tip
Audit your top 3 drink categories every 6 weeks to catch margin drift early. Beer, wine, and cocktails usually represent 70% of beverage revenue, so getting these right protects most of your profit.
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Frequently asked questions
Do I need to include VAT in my drink price calculation?
Yes, but calculate first excl. VAT then add VAT. Alcoholic drinks get 21% VAT, non-alcoholic 9%. Your menu price is always including VAT.
What is a good margin for beer?
Between 20-30% of the selling price is standard. At 25% you earn €4 on every €5 you charge. Lower percentages mean more profit per drink.
How do I calculate the price of wine per glass?
Divide the purchase price of the bottle by the number of glasses (usually 6). A bottle costing €18 means €3 per glass. At 30% margin that becomes €10 per glass excl. VAT.
Do I need to calculate cocktail prices differently?
Add up all ingredients (alcohol, mixers, garnish) and calculate your margin over that total. Don't forget labor costs - making cocktails takes more time than pouring a beer.
📚 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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