Most restaurants obsess over food costs while completely ignoring their beverage margins. You'll spend hours calculating recipe costs and tracking waste, but that bottle of wine sitting in your cellar? You barely think about its profit potential. This backwards approach costs you thousands every month.
Why drinks are so profitable
Beverages naturally carry lower ingredient costs than food items. That €8 bottle of wine becomes €32 on your table. A €0.80 beer transforms into €3.50. The profit margins are massive, yet most operators don't grasp just how significant this difference really is.
? Example: Comparing food vs. drinks
Steak (€28 incl. VAT):
- Selling price excl. VAT: €25.69
- Ingredient costs: €9.50
- Margin: €16.19 (63%)
Bottle of house wine (€32 incl. VAT):
- Selling price excl. VAT: €26.45
- Purchase price: €8.00
- Margin: €18.45 (70%)
Result: Higher margin with less work
Where things go wrong with drinks
The issue? Most restaurateurs treat beverages like an afterthought. You order some bottles, stick them in the cooler, and call it done. But this lazy approach leaves serious money on the table:
- Zero margin visibility: You can't identify which bottles generate the most profit
- Passive selling: Your staff have no clue what to recommend
- Poor purchasing decisions: You're buying too much of the wrong inventory
- Static offerings: Same drink menu regardless of season
⚠️ Note:
While drinks have high margins, they also carry more risk of spoilage and theft. Factor this into your calculations.
The impact of better drink management
Treating beverages with the same respect as your food program can dramatically boost your bottom line. After managing kitchen operations for nearly a decade, I've seen restaurants increase profits by 40% just by focusing on drink sales. Guests often spend more freely on beverages than entrees anyway.
? Example: Annual impact
Restaurant with 100 covers/day, 6 days/week:
- Current drink sales: €8 per cover
- With better management: €12 per cover
- Difference: €4 per cover
Extra revenue per year: €4 × 100 × 6 × 52 = €124,800
At 70% margin: €87,360 extra profit
Why you're not managing this
Several factors contribute to this beverage blind spot:
- Perceived simplicity: Drinks seem easier than cooking, so they get ignored
- No recipe mindset: You calculate food costs religiously but skip drink calculations
- Knowledge gaps: Your chef knows ingredients inside out, but servers know little about wine
- Tracking failures: You monitor dish popularity but ignore beverage performance
How to turn this around
Start by understanding your drink margins. Calculate earnings on every wine, beer, and cocktail. Apply the same analytical approach you use for your food menu:
Drink margin % = (Selling price excl. VAT - Purchase price) / Selling price excl. VAT × 100
? Example: Calculating drink margin
House red wine you sell for €6.50 per glass (incl. 21% VAT):
- Selling price excl. VAT: €6.50 / 1.21 = €5.37
- Purchase price per glass: €1.60 (€8 bottle / 5 glasses)
- Margin: (€5.37 - €1.60) / €5.37 × 100 = 70%
Much better than most dishes!
Systems like KitchenNmbrs let you track beverage margins alongside food costs, giving you complete visibility into which products drive the most profit.
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How do you get control of your drink margins?
Inventory your current drink menu
Make a list of all drinks you sell: wines, beers, soft drinks, coffee. Note the purchase price and selling price of each product. This gives you the overview you need.
Calculate the margin per product
Use the formula: (Selling price excl. VAT - Purchase price) / Selling price excl. VAT × 100. Note: alcoholic drinks have 21% VAT, not 9%. This gives you insight into your most profitable products.
Analyze sales figures per product
Look at which drinks sell the most and compare this with the margins. Sometimes you sell a lot of a product with low margin, while profitable alternatives barely sell.
✨ Pro tip
Track your beverage sales over the next 30 days and calculate what percentage they represent of total revenue. Most successful restaurants hit 30-40% drink sales, but if you're below 25%, you're leaving serious profit on the table.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Calculate it yourself?
Our free food cost calculator does it in seconds.
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Frequently asked questions
What is a good drink margin for restaurants?
Should I include VAT when calculating drink margins?
How do I prevent drinks from spoiling or being stolen?
Which drinks should I push for more profit?
How often should I adjust my drink prices?
Can I apply the same portion control methods to drinks as I do with food?
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
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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