Drink margins separate profitable restaurants from struggling ones. Most owners obsess over food costs while ignoring beverages that deliver 65-80% margins...
The Riverside Bistro went from barely breaking even to €163,800 annual profit by fixing one thing: their drink margins. They weren't tracking pour sizes, hadn't updated costs in months, and were calculating margins wrong. Three months later, they hit 78% on beverages.
What is a healthy drink margin?
A healthy margin on drinks is between 65% and 80% for most food service businesses. This means that for every euro you earn on drinks, 65 to 80 cents is profit (before deducting other costs like staff and rent).
💡 Example:
A glass of wine on your menu for €6.50 (incl. 9% VAT):
- Selling price excl. VAT: €5.96
- Cost price wine per glass: €1.20
- Margin: €5.96 - €1.20 = €4.76
Margin percentage: 80%
Margins per drink type
Different drinks deliver different margins. Here's what you should expect:
- Wine by the glass: 70-85%
- Draught beer: 75-85%
- Bottled beer: 65-75%
- Spirits: 80-90%
- Soft drinks: 85-90%
- Coffee/tea: 80-90%
💡 Example draught beer:
A 25cl beer for €2.80 (incl. 9% VAT):
- Selling price excl. VAT: €2.57
- Cost price per glass: €0.40
- Margin: €2.57 - €0.40 = €2.17
Margin percentage: 84%
How do you calculate your drink margin?
The formula for drink margin is straightforward:
Margin % = ((Selling price excl. VAT - Cost price) / Selling price excl. VAT) × 100
⚠️ Note:
Always calculate with the price excluding VAT. On drinks you pay 9% VAT in the Netherlands (except on spirits above 22%, where it's 21%).
Why are drink margins so high?
Beverages naturally deliver higher margins than food because:
- Zero prep time: You just pour and serve
- Minimal spoilage: Wine and spirits stay fresh for months
- Low labor costs: Pouring takes seconds, not minutes
- Fast turnover: Popular drinks move quickly
💡 Example impact:
Restaurant with 100 covers per day, 6 days per week:
- Average 1.5 drinks per guest
- Average margin per drink: €3.50
- Per week: 900 drinks × €3.50 = €3,150
Per year: €163,800 in drink margin
Where do things often go wrong?
Most operators lose money through these common mistakes:
- Generous pours: 20cl wine instead of 15cl destroys 25% of your margin
- Stale cost data: Suppliers increase prices quarterly
- VAT confusion: Calculating margins with tax-inclusive prices
- Untracked waste: Spillage, staff tastings, comped drinks
⚠️ Note:
A 5cl overpour of wine per glass costs you €15,600 per year in lost margin at 50 glasses per day.
Optimizing drink margin
Here's how to boost your beverage margins without alienating customers:
- Consistent pours: Use jiggers or programmable dispensers
- Push glass wines: Better margins than bottles
- Smart house selections: Quality wines at wholesale prices
- High-margin cocktails: Focus bar training on profitable drinks
- Regular price audits: Update costs monthly, not yearly
Based on real restaurant P&L data, operators who track margins weekly see 12-15% higher beverage profits than those who check quarterly. Modern systems make this monitoring automatic and painless.
How do you calculate your drink margin? (step by step)
Gather your data
Note the selling price from your menu (incl. VAT) and the cost price per unit. For wine: calculate the price per glass by dividing the bottle price by the number of glasses.
Calculate selling price excl. VAT
Divide the menu price by 1.09 (for 9% VAT on drinks). For example: €6.50 / 1.09 = €5.96 excl. VAT.
Calculate the margin
Subtract the cost price from the selling price excl. VAT. Divide this by the selling price excl. VAT and multiply by 100 for the percentage.
✨ Pro tip
Install measured pour spouts on your top 5 spirits. A 30ml pour instead of 35ml saves €2,400 annually per bottle at 100 cocktails weekly.
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 promote wine by the bottle or by the glass for better margins?
Wine by the glass typically delivers better margins (70-85%) compared to bottles (50-65%). You control portions precisely and reduce waste from opened bottles that don't sell. However, bottles work well for large groups and special occasions.
How do I handle staff drinks and tastings without killing my margins?
Track all staff consumption as a separate cost category, typically 2-3% of total beverage sales. Set clear policies: one shift drink per employee, tastings only for new items, and manager approval for any comped drinks.
What's the break-even point if I want to offer happy hour discounts on drinks?
With 75% margins, you can discount drinks up to 40% and still profit. A €5 beer (€1.25 cost) can be sold for €3 during happy hour and still deliver €1.75 profit per glass.
📚 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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