Guidelines for Cocktail Pricing

In a recent article for Uncorkd, Kyle Thacker tackles the subject of how bars and restaurants can go about pricing their cocktail menus. Though the pricing formula is relatively simple, there are a number of strategic decisions to be made. The author presents the following steps:

  • Figuring out liquor cost – Bottle purchase price ÷ ounces in bottle = cost per ounce. Keep in mind that most drinks contain more than one ounce of liquor!
  • Figuring out pour cost – Pour cost is the ratio of the liquor cost of a drink to the price you charge customers for the drink; the higher your pour cost, the less you are charging for drinks. Thacker recommends aiming your pour cost to fall in the 18%-24% range. Determine your desired pour cost rate then use the following formula to determine your drink charge: liquor cost ÷ pour cost in decimals = drink charge.
  • Calculating the cost of non-alcoholic ingredients – Implement portion control standards behind the bar in order to maintain consistency of cocktail flavor as well as your cocktail production cost. Calculate the cost of freshly juiced produce then use the liquor cost formula from above to determine the price per ounce of juice.
  • Engineering your cocktail menu – While aiming for a pour cost in the 18%-24% range is ideal, some high-end cocktails cost significantly more to make and may require that you raise their particular pour cost (lower their price) in order to sell any. While these particular cocktails may be loss leaders price-wise, their benefit comes in the form of exciting customers and boosting the appeal of your bar—and their loss can often be made up for by selling another cocktail at a lower pour cost (higher price).

For more information, read the article in full at Uncorkd.