Over 65% of catering businesses miscalculate their drink margins, leading to profit losses of €200-400 monthly. Open bar lets guests drink unlimited for a fixed price per person, while measured drinks charge per consumption. The profitability gap between these two approaches can reach 15-20 percentage points.
Open bar vs. measured drinks: the basics
With open bar catering customers pay a set amount per guest and everyone drinks unlimited. With measured drinks catering customers pay for each drink - every order gets tracked individually.
💡 Open bar example:
Wedding 80 people, 5 hours open bar at €25 per person:
- Drinks revenue: 80 × €25 = €2,000
- Actual consumption: 240 drinks at €2.50 cost = €600
- Margin: €1,400 (70%)
But if they drink more your margin drops fast...
Calculate margin on open bar
Your profit hinges on actual consumption versus your estimates. Here's the formula:
Open bar margin = (Fixed rate per person - Actual drink costs per person) / Fixed rate × 100
⚠️ Watch out:
Open bar always carries risk of excessive drinking. A group of 30-year-old men consumes very differently than mixed 50+ guests. I've seen this mistake cost restaurants €200-400 monthly when they don't adjust pricing for different demographics.
Calculate margin on measured drinks
Measured drinks offer predictable margins since each drink gets calculated separately:
Margin per drink = (Selling price excl. VAT - Cost price) / Selling price excl. VAT × 100
💡 Measured drinks example:
Same wedding, but measured:
- 240 drinks at €6.05 incl. 21% VAT = €5.00 excl. VAT
- Cost price: €2.50 per drink
- Margin per drink: (€5.00 - €2.50) / €5.00 × 100 = 50%
- Total revenue: €1,452 (240 × €6.05)
- Total margin: €600 (240 × €2.50)
Margin percentage: 41.3%
Which formula generates more?
This depends on guest drinking patterns and how you price your open bar:
- Open bar: Higher margins if guests drink less than anticipated
- Measured drinks: Consistent margins, but typically lower total revenue
- Open bar risk: Margins can plummet to 20% with heavy drinkers
- Measured advantage: Same margin percentage every time
💡 Break-even calculation open bar:
If you charge €25 per person and your cost is €2.50:
- Break-even: €25 / €2.50 = 10 drinks per person
- More than 10 drinks = you lose money
- Less than 10 drinks = profit
Always calculate your drink limit beforehand
Practical tips for better margins
Regardless of your chosen approach, these factors impact profitability:
- Smart drink selection: Budget wines and beers deliver better margins
- Premium drinks separate: Always price whisky and champagne individually
- Time limits on open bar: Switch to measured after 4-5 hours
- Include non-alcoholic costs: Soft drinks and coffee add up too
Administration and control
Both formulas require tracking actual consumption. This data helps you price future events better and maximize margins.
⚠️ Watch out VAT:
Alcoholic drinks carry 21% VAT, not 9%. Always calculate margins using prices excluding VAT.
How do you calculate the margin on catering drinks?
Determine your formula and set your prices
Choose between open bar (fixed amount per person) or measured drinks (per consumption). With open bar: calculate how many drinks someone drinks on average and base your price on that. With measured: determine your selling price per drink.
Calculate your cost price per drink
Add up all costs: the drink itself, any garnish (lemon, olives), ice and glassware. Don't forget VAT: always calculate with prices excl. VAT for your margin calculation.
Monitor and adjust based on actual consumption
Track how much is actually drunk per event. With open bar: adjust your price if guests consistently drink more or less. With measured drinks: check if your margins match your targets.
✨ Pro tip
Track your open bar break-even point weekly - if you're consistently hitting 8+ drinks per person within 3 hours, raise your per-person rate by €3-5 for the next month's bookings.
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
Which formula is more profitable: open bar or measured drinks?
Open bar can generate higher profits if guests drink less than expected, but carries greater risk. Measured drinks provide stable but typically lower margins. Business events favor measured drinks for predictability, while parties can benefit from open bar's higher revenue potential.
How do I prevent my open bar margin from collapsing?
Set strict time limits (maximum 4 hours), exclude premium spirits, and calculate break-even points beforehand. If you charge €25 per person with €2.50 cost, your limit is exactly 10 drinks per guest.
Should I include VAT in my margin calculations?
Always calculate margins using prices excluding VAT. Alcoholic drinks carry 21% VAT, so a €6.05 drink including VAT equals €5.00 excluding VAT for margin purposes.
What's a realistic margin expectation for catering drinks?
Measured drinks typically yield 45-55% margins. Open bar margins fluctuate wildly from 20% (heavy drinkers) to 70% (light consumption). Always plan open bar scenarios using worst-case drinking patterns.
How do I accurately track actual consumption?
Count empty bottles and record all dispensed drinks meticulously. Open bar tracking is crucial for future pricing adjustments, while measured drinks tracking helps control margins and optimize cost structures.
Can I mix open bar with premium drink upgrades?
Absolutely - offer basic open bar packages while charging separately for premium spirits, champagne, or craft cocktails. This protects your base margin while capturing additional revenue from guests wanting upgrades.
What's the optimal open bar duration to maximize profit?
Most profitable open bars run 3-4 hours maximum. After hour 4, consumption typically increases while guest satisfaction plateaus, eroding your margins significantly without adding real value.
📚 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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