Most bar owners guess their beer margins, but precision beats guesswork every time. Draft and bottled beer have completely different cost structures. Here's how to calculate what each pint and bottle actually brings in.
The difference between draft and bottled
Draft beer costs differ significantly from bottles. With draft you're paying for the keg, CO2, line maintenance, and dealing with foam loss. Bottles cost more per liter but waste less.
💡 Example draft vs bottle:
Heineken 25cl selling for €2.50 (incl. 21% VAT):
- Draft: keg €120 for 200 glasses = €0.60 per glass
- Bottle: purchase €0.85 per bottle
Difference: €0.25 per glass advantage for draft
Calculate margin for draft beer
For draft beer you'll convert total keg costs to per-glass costs. Always calculate with the selling price excluding VAT (21% for alcoholic beverages).
Draft beer margin formula:
Margin % = ((Selling price excl. VAT - Cost per glass) / Selling price excl. VAT) × 100
💡 Example draft beer calculation:
Pilsener 25cl for €2.80 (incl. 21% VAT):
- Selling price excl. VAT: €2.80 / 1.21 = €2.31
- 30L keg for €65 = 120 glasses of 25cl
- Cost per glass: €65 / 120 = €0.54
- CO2 and loss: +€0.06 per glass
Margin: ((€2.31 - €0.60) / €2.31) × 100 = 74%
Calculate margin for bottles
Bottles make calculations simpler since you know exactly what each one costs. But watch out for deposit fees and bulk purchase discounts that affect your numbers.
⚠️ Attention:
Always calculate alcoholic beverages with 21% VAT, not 9%. This common mistake makes your margin appear lower than it actually is.
💡 Example bottles calculation:
Hertog Jan 30cl for €3.20 (incl. 21% VAT):
- Selling price excl. VAT: €3.20 / 1.21 = €2.64
- Purchase price per bottle: €1.05
- Deposit fee: €0.00 (passed on to guest)
Margin: ((€2.64 - €1.05) / €2.64) × 100 = 60%
Hidden costs with draft beer
Draft beer carries more costs than just the keg price. These additional expenses determine whether draft truly beats bottles:
- CO2 costs: €0.03-€0.05 per glass
- Line maintenance: €0.01-€0.02 per glass
- Foam loss: 5-10% extra volume needed
- Purging: first glasses after tapping
Add these costs to your keg price for accurate cost analysis. Based on real restaurant P&L data, operators who ignore these hidden costs overestimate their draft margins by 8-12%.
What margin is normal?
Standard margins for beer in hospitality fall between:
- Draft beer: 70-80% margin
- Bottles: 55-70% margin
- Specialty beer: 60-75% margin
If you're below these percentages, consider raising prices or finding cheaper suppliers.
Optimize your margin
Three strategies to boost your beer margin:
- Better purchasing: Negotiate keg prices on larger orders
- Less loss: Train staff to minimize foam
- Adjust mix: Promote beers with higher margins
💡 Example mix optimization:
If you sell 100 beers per evening:
- 80x pilsener (margin €1.70) = €136 profit
- 20x specialty (margin €2.50) = €50 profit
Shift to 60x pilsener + 40x specialty:
New profit: €102 + €100 = €202 (+€16 per evening)
How do you calculate beer margin? (step by step)
Calculate selling price excluding VAT
Divide your menu price by 1.21 (for 21% VAT on alcohol). A beer of €3.00 becomes €3.00 / 1.21 = €2.48 excl. VAT.
Calculate cost per unit
For draft: divide keg price by number of glasses. For bottle: take purchase price per bottle. Add extra costs like CO2 and loss.
Apply the margin formula
Margin % = ((Selling price excl. VAT - Costs) / Selling price excl. VAT) × 100. Check if you're between 55-80% margin.
✨ Pro tip
Track your foam loss percentage for 2 weeks - most bars lose 7-12% to foam, but proper training can cut this to 3-5%.
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 include VAT in my margin calculation?
No, always calculate with the price excluding VAT. For alcoholic beverages that's 21% VAT that you need to remove from your menu price.
What is a good margin on beer?
Draft beer: 70-80% margin. Bottles: 55-70% margin. If you're lower, you can probably raise your price or buy cheaper.
How do I factor in CO2 costs?
CO2 costs about €0.03-€0.05 per glass of draft beer. Add this to your keg costs for the real cost overview per glass.
Is draft beer always cheaper than bottles?
Usually yes, but not always. Calculate the total costs including CO2, maintenance and loss. Sometimes bottles are more cost-effective on small volumes.
How often should I adjust my beer prices?
Check your purchase prices every 3-6 months. Breweries regularly adjust their prices, especially with energy and raw material fluctuations.
What's the biggest mistake in beer margin calculations?
Using the wrong VAT rate or forgetting hidden costs like CO2 and foam loss. These errors can make your margins look 10-15% different than reality.
📚 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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