Ever wonder why your afterdrink sales aren't as profitable as expected? Most restaurants only calculate drink costs but miss packaging, labor, and VAT complexities. Here's how to determine your true afterdrink margins.
What does an afterdrink arrangement really cost?
Your afterdrink arrangement involves more than the liquid in the glass. You must calculate:
- Drink costs: Alcohol purchase price plus mixers
- Packaging materials: Glassware, napkins, cocktail straws
- Labor time: Additional prep and service minutes
- VAT implications: 21% on alcohol (never 9%!)
⚠️ Note:
Alcoholic beverages require 21% VAT, not the reduced 9% rate. This dramatically affects your final margin calculations.
Calculate your drink costs per person
Begin with raw ingredient expenses. Total every component entering the glass:
💡 Example afterdrink arrangement:
Limoncello + coffee per person:
- Limoncello (5cl): €1.80
- Espresso: €0.25
- Amaretti cookie: €0.15
Drink costs: €2.20 per person
Don't overlook minor additions: sugar sachets, cream portions, lemon wedges. They seem insignificant individually but accumulate quickly.
Factor in staff costs
Afterdrinks demand more labor than simple bill settlement. Your bartender must:
- Prepare and present drinks properly
- Clean additional glassware afterward
- Extend service hours beyond normal closing
Budget approximately 2-3 extra minutes per guest. With €20 hourly labor costs, that translates to €0.60-€1.00 per afterdrink. This mistake costs the average restaurant EUR 200-400 per month in miscalculated margins.
💡 Calculation example for staff costs:
Table of 8 people, afterdrink arrangement:
- Extra time: 8 × 3 minutes = 24 minutes
- Staff costs: €20/hour = €0.33/minute
- Costs: 24 × €0.33 = €8.00 total
Per person: €1.00 extra staff costs
Calculate your selling price and margin
Now you can determine profitability. Use this formula:
Margin % = ((Selling price excl. VAT - Total costs) / Selling price excl. VAT) × 100
💡 Complete margin calculation:
Afterdrink arrangement for €8.50 (incl. 21% VAT):
- Selling price excl. VAT: €8.50 / 1.21 = €7.02
- Drink costs: €2.20
- Staff costs: €1.00
- Total costs: €3.20
Margin: ((€7.02 - €3.20) / €7.02) × 100 = 54.4%
Standard margins for afterdrinks
Afterdrinks typically yield higher margins than main dishes:
- Digestifs: 60-75% margin
- Cocktail arrangements: 50-65% margin
- Coffee + liqueur: 55-70% margin
These percentages exceed food margins (28-35%) because beverages require less intensive preparation than cooking processes.
⚠️ Note:
Monitor your supplier prices consistently. Alcohol costs often increase faster than food ingredients, particularly imported spirits.
Optimize your afterdrink margin
Three strategies to boost profitability:
- Select smart pairings: Coffee + house liqueur outperforms premium cognac margins
- Create package deals: 'Afterdrink for 2' boosts average transaction value
- Develop your staff: Effective upselling increases afterdrink sales volume
Food cost management tools like KitchenNmbrs automatically compute drink expenses and margins, including proper VAT calculations for each product category.
How do you calculate the margin on afterdrinks? (step by step)
Calculate all drink costs
Add up all ingredients: alcohol, mixers, garnish, coffee. Don't forget small things like sugar or lemon. These are your pure product costs per person.
Factor in staff costs
Calculate 2-3 minutes extra staff per afterdrink. At €20/hour in staff costs, that's €0.60-€1.00 per person extra.
Calculate your margin percentage
Subtract total costs from selling price (excl. 21% VAT), divide by selling price and multiply by 100. Standard margin for afterdrinks: 50-75%.
✨ Pro tip
Track your afterdrink conversion rates every 2 weeks - tables ordering digestifs should hit 35-40% during peak seasons. Lower rates indicate staff training opportunities or pricing adjustments needed.
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
What VAT rate applies to afterdrinks?
Alcoholic beverages require 21% VAT, even within arrangements. Coffee alone uses 9% VAT, but adding alcohol shifts the entire offering to 21%.
What constitutes a good margin for digestifs?
Digestifs typically achieve 60-75% margins. They outperform food because labor requirements are minimal and per-serving costs stay relatively low.
Should packaging costs be included?
Absolutely include glassware, napkins, and decorative elements in cost calculations. Cocktail garnishes, straws, and presentation accessories accumulate significant per-drink expenses.
How frequently should afterdrink prices be adjusted?
Review supplier pricing quarterly minimum. Alcohol costs escalate faster than food ingredients, especially imported products like whisky or cognac.
Can afterdrinks combine with dessert offerings?
Yes, combination packages increase average transaction values. Calculate margins across the complete arrangement rather than itemizing separately.
How do seasonal liqueurs affect margin calculations?
Seasonal spirits often carry premium pricing but limited availability windows. Factor storage costs and potential waste from unsold inventory into your margin calculations.
What's the impact of glassware breakage on afterdrink costs?
Include 3-5% breakage allowance in your calculations. Specialty cocktail glasses cost more to replace than standard wine glasses, affecting your true serving costs.
⚠️ EU Regulation 1169/2011 — Allergen Information — https://eur-lex.europa.eu/eli/reg/2011/1169/oj
The allergen information on this page is based on EU Regulation 1169/2011. Recipes and ingredients may vary by supplier. Always verify current allergen information with your supplier and communicate this correctly to your guests. KitchenNmbrs is not liable for allergic reactions.
In the UK, the FSA enforces allergen regulations under the Food Information Regulations 2014.
📚 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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