Why do some bars make 40% more profit from the exact same drinks? They use the Kasavana and Smith matrix to identify which beverages combine high popularity with strong profitability. Most bar owners track what sells well but ignore the margin per glass - missing thousands in potential profit.
What is the Kasavana and Smith matrix?
The Kasavana and Smith matrix sorts your drink menu into four categories using two metrics: popularity (ordering frequency) and profitability (earnings per glass). Every beverage lands in one of these quadrants:
- Stars: Popular and profitable (keep and promote)
- Plowhorses: Popular but low profit (raise price or lower costs)
- Puzzles: Low sales but profitable (promote more)
- Dogs: Low sales and low profit (consider removing)
Calculate profitability per drink
For every menu item, calculate the pour cost - your beverage equivalent of food cost. Here's the formula:
Pour cost % = (Cost per glass / Selling price excl. VAT) × 100
💡 Example pour cost calculation:
Draft beer sells for €3.50 (incl. 21% VAT):
- Selling price excl. VAT: €3.50 / 1.21 = €2.89
- Cost per glass: €0.65
- Pour cost: (€0.65 / €2.89) × 100 = 22.5%
That's a solid margin for beer.
⚠️ Note:
Alcoholic beverages get hit with 21% VAT, not 9%. Always exclude VAT for accurate pour cost calculations.
Measure the popularity of each drink
Track popularity through sales volume. Count glasses sold over 4 weeks for each drink, then calculate market share:
Market share % = (Glasses sold of drink X / Total glasses sold) × 100
💡 Example popularity:
Sold in 4 weeks:
- Heineken: 450 glasses
- Total all drinks: 2,100 glasses
- Heineken market share: (450 / 2,100) × 100 = 21.4%
Heineken's clearly a crowd favorite.
Determine the average values
You need benchmarks to position drinks in the matrix. Calculate average market share and average profit margin across all beverages:
- Average market share = 100% / number of different drinks
- Average profit margin = total drink profit / total drink revenue
Above-average drinks are "high," below-average are "low."
Place drinks in the matrix
Now slot each beverage into its quadrant:
- Stars: Market share > average AND profit margin > average
- Plowhorses: Market share > average AND profit margin < average
- Puzzles: Market share < average AND profit margin > average
- Dogs: Market share < average AND profit margin < average
💡 Example matrix placement:
Say your average market share is 5% and average profit margin is 75%:
- Heineken: 21.4% market share, 77.5% profit margin → Star
- Specialty beer X: 2.1% market share, 82% profit margin → Puzzle
- House wine: 18% market share, 68% profit margin → Plowhorse
Calculate the margin impact of adjustments
For each category, you can calculate potential returns from changes:
Stars: Maintain pricing, boost promotion. Impact = current profit × projected sales increase
Plowhorses: Increase price or cut costs. Impact = glasses sold × additional margin per glass
Puzzles: Push through staff recommendations. Impact = extra sales × current margin per glass
Dogs: Eliminate or substitute. Impact = cost savings + room for profitable alternatives
This pattern we see repeatedly in restaurant financials: bars that systematically apply these calculations typically boost their beverage margins by 15-25% within six months.
💡 Example impact calculation:
House wine (Plowhorse) price bump from €4.50 to €5.00:
- Extra per glass: €0.50 / 1.21 = €0.41 excl. VAT
- Monthly sales: 380 glasses
- Expected sales drop: 10% = 342 glasses
- Additional profit: 342 × €0.41 = €140 monthly
That's €1,680 extra annual profit from one small tweak.
Implement changes systematically
Focus on high-impact, low-risk moves first. Usually that means:
- Plowhorses: modest price increases (€0.25-€0.50)
- Stars: prime menu placement, staff upselling
- Dogs: swap for potential Stars or Puzzles
- Puzzles: train servers to recommend these actively
Re-measure after 4 weeks and track the real impact on your total beverage margin.
How do you apply the matrix to your drink menu? (step by step)
Gather 4 weeks of sales data
Count per drink how many glasses you've sold and calculate the pour cost percentage. You need sales numbers and cost prices for a reliable analysis.
Calculate averages and place in matrix
Determine the average market share and average profit margin. Place each drink in the correct quadrant based on these reference points.
Prioritize adjustments by impact
Start with Plowhorses (price increase) and Dogs (replace). Calculate the expected extra profit for each adjustment and implement the most lucrative changes first.
✨ Pro tip
Focus your initial matrix analysis on beverages that moved 50+ glasses in the past 30 days - these represent roughly 75% of your drink revenue and deliver the biggest margin impact. Skip low-volume specialty items until later.
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
How often should I recalculate the matrix?
Every 3 months works for most bars, unless you make major menu changes. Then measure after 4 weeks to see if your adjustments are working.
What if a drink falls between two quadrants?
Look at the trend: is popularity or profitability rising or falling? Treat the drink as the quadrant it's heading toward.
Should I treat cocktails differently than regular drinks?
Absolutely. Include every ingredient in cocktails: spirits, mixers, garnish, and ice. Pour costs run higher but so do selling prices, often delivering better absolute profit per glass.
Can I always remove Dogs from my menu?
Not necessarily. Some Dogs serve a purpose - like having a basic red wine for completeness or strategic reasons. Target Dogs without clear functions first.
📚 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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