Mineral water margins appear straightforward, but many restaurant owners overlook VAT and operational costs. This inflates your actual profit figures. Here's how to determine genuine margin per bottle.
Why calculating margin matters
Mineral water looks like easy money. You purchase a bottle for €0.80 and sell it for €4.50. That's €3.70 profit, correct? Not quite. With VAT, labor, and operational expenses, you'll retain less than anticipated.
⚠️ Note:
Always calculate using selling price excluding VAT. Menu prices include 9% VAT for non-alcoholic beverages.
The formula for margin calculation
For accurate margin calculation, use this formula:
Margin % = ((Selling price excl. VAT - Purchase price) / Selling price excl. VAT) × 100
And for absolute margin in euros:
Margin € = Selling price excl. VAT - Purchase price
💡 Example:
Spa blue 500ml:
- Purchase price: €0.85
- Menu price: €4.50 (incl. 9% VAT)
- Selling price excl. VAT: €4.50 / 1.09 = €4.13
Margin: €4.13 - €0.85 = €3.28 (79.4%)
Including other costs
Complete margin calculation also accounts for:
- Labor costs: Time to serve and clear tables
- Glassware: Depreciation and breakage replacement
- Washing and clearing costs: Water, detergent, energy
- Payment processing fees: Typically 1-2% of revenue
These expenses are challenging to calculate per bottle, but estimate roughly €0.50-€1.00 in additional costs per bottle. This is a pattern we see repeatedly in restaurant financials across different establishment types.
💡 Realistic calculation:
Spa blue 500ml with all costs:
- Selling price excl. VAT: €4.13
- Purchase price bottle: €0.85
- Other costs: €0.75
Net margin: €4.13 - €1.60 = €2.53 (61.3%)
Different types of mineral water
Margin fluctuates by water type:
- Tap water (filtered): Maximum margin, purchase price nearly €0
- House brand mineral water: Purchase price €0.60-€0.80
- Premium brands (Evian, San Pellegrino): Purchase price €1.20-€1.80
- Special bottles (large format): Reduced margin per ml
💡 Comparison by type:
At selling price €4.50 excl. VAT (€4.13):
- House brand (€0.70): Margin €2.68 (65%)
- San Pellegrino (€1.50): Margin €1.88 (46%)
- Filtered tap water (€0.10): Margin €3.28 (80%)
Optimizing your margin
Boost your mineral water margin by:
- Using house brands: Identical quality, reduced purchase price
- Offering larger bottles: Decreased cost per ml
- Considering water filtration systems: Maximum margin, eco-friendly
- Renegotiating supplier terms: With increased volumes
Tools like KitchenNmbrs help track which beverage type generates maximum profit and adjust your purchasing strategy accordingly.
How do you calculate the margin on mineral water? (step by step)
Gather your purchase price per bottle
Get your latest supplier invoice and divide the total price by the number of bottles. Don't forget to include any discounts or tiered pricing in your calculation.
Calculate your selling price excluding VAT
Divide your menu price by 1.09 to get the price excluding 9% VAT. Non-alcoholic beverages in hospitality always have 9% VAT.
Subtract purchase price from selling price excl. VAT
The difference is your gross margin in euros. For the percentage: divide the margin by the selling price excl. VAT and multiply by 100.
✨ Pro tip
Track your mineral water margins weekly for 4 weeks to identify patterns. Small price adjustments of €0.25 can boost monthly beverage profits by 8-12%.
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 using selling price excluding VAT. VAT collected must be remitted to tax authorities, so it's not actual profit.
What constitutes a good margin on mineral water?
A gross margin of 60-80% is standard for mineral water. After subtracting all expenses (labor, glassware, washing), you typically retain 50-70% net margin.
Why is my margin lower than anticipated?
Restaurant owners often overlook additional costs: service labor, glassware, washing, and payment processing fees. These can total €0.50-€1.00 per bottle.
Should I charge different prices for various brands?
You could, but most restaurants charge uniform prices for all 500ml bottles. Premium brands like San Pellegrino do yield lower margins than house brands.
Is filtered tap water more profitable?
Yes, filtered tap water delivers the highest margin since purchase price approaches zero. You'll need to invest in filtration systems and glass carafes though.
How often should I review my water pricing?
Review quarterly, especially after supplier price changes or menu updates. Monitor competitor pricing and adjust accordingly to maintain competitiveness.
What's the impact of bottle size on profitability?
Larger bottles (750ml, 1L) typically offer better margins per ml but may have slower turnover. Calculate both absolute profit and inventory turnover rates.
📚 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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