How to Price Cocktails and Bar Drinks for Maximum Profit
Learn how to price cocktails using pour cost percentage and the cost-plus pricing method to maximize bar profit on every drink you serve.
How to Price Cocktails and Bar Drinks for Maximum Profit
Knowing how to price cocktails correctly is the difference between a bar that looks busy and a bar that's actually profitable. Most operators set drink prices by guessing, copying competitors, or rounding to a number that feels right. The result is inconsistent margins and money left on the table. The fix is one number: pour cost.
Why Your Bar Is Either Your Biggest Asset or Your Biggest Leak
Bar drinks are the highest-margin items in most restaurants. A cocktail that costs you $1.85 to make can sell for $11–14. A glass of wine you pay $4 for can go for $13 at the table.
But high potential doesn't mean automatically profitable. Most operators price their drinks by guessing or copying competitors. That leaves real money on the table — or worse, creates prices that look fine but quietly drain margin.
What Is Pour Cost?
Pour cost (also called beverage cost percentage) is the percentage of a drink's selling price that went into making it.
Pour Cost % = Ingredient Cost ÷ Selling Price × 100
If a cocktail costs you $2.10 to make and you sell it for $12:
- $2.10 ÷ $12 × 100 = 17.5% pour cost
Lower pour cost = higher margin.
Target Pour Cost by Drink Type
| Drink Category | Target Pour Cost | Why |
|---|---|---|
| Spirits & Cocktails | 15–20% | Premium pricing power, higher preparation labor |
| Beer (draft) | 20–25% | Lower price point, lower prep labor |
| Beer (bottled/canned) | 25–30% | Less waste but lower perceived value |
| Wine by the glass | 30–35% | Higher ingredient cost relative to sell price |
| Wine by the bottle | 35–45% | Volume discount opportunity if priced correctly |
Worked Example: Pricing a House Margarita
| Ingredient | Amount | Cost |
|---|---|---|
| Tequila (well) | 1.5 oz | $1.20 |
| Triple sec | 0.5 oz | $0.40 |
| Fresh lime juice | 0.5 oz | $0.25 |
| Total ingredient cost | $1.85 |
Testing price points:
- At $10: $1.85 ÷ $10 = 18.5% pour cost ✅
- At $11: $1.85 ÷ $11 = 16.8% pour cost ✅ (sweet spot)
- At $8: $1.85 ÷ $8 = 23.1% pour cost ⚠️ (thin margin)
$11 is the right price. At 40 margaritas on a Friday night: $440 revenue, $74 ingredient cost, $366 gross margin on one drink type, one shift.
The Cost-Plus Cocktail Pricing Method
Selling Price = Ingredient Cost ÷ Target Pour Cost %
For a craft cocktail with $3.20 in ingredient cost, targeting 20% pour cost:
- $3.20 ÷ 0.20 = $16.00 selling price
Round to the nearest dollar. If $16 feels high for your market, either accept a slightly higher pour cost or substitute ingredients to bring your cost down.
Common Bar Pricing Mistakes
Pricing by competition without knowing your costs. If the bar next door charges $10 for a margarita and their tequila costs $0.30 more per ounce than yours, copying their price means you run a worse margin. Know your own numbers first.
Forgetting waste and yield. A lime yields about 0.75–1 oz of juice. Factor in the full fruit cost, not just the juice yield.
Setting prices and never revisiting them. If your spirits costs go up 15% and your prices don't change, your pour cost just went up 15% too. Review pricing quarterly.
Building a Bar Pricing Spreadsheet
For every drink on your menu, track:
- Ingredient list with ounces and current cost per ounce
- Total ingredient cost
- Current selling price
- Current pour cost % (cost ÷ price × 100)
- Target pour cost %
- Recommended price (cost ÷ target %)
Review this spreadsheet quarterly. Flag any drink more than 3 points above its pour cost target. Either reprice or reformulate.
FAQ: How to Price Cocktails
What is the standard pour cost for cocktails?
The standard target for spirits and cocktails is 15–20%. Premium craft cocktails can run up to 22–25% if they command a premium price. Beer runs 20–30% and wine by the glass typically runs 30–35%.
How do you calculate the price of a cocktail?
Divide the total ingredient cost by your target pour cost percentage. Example: $2.50 cost ÷ 0.18 (18% target) = $13.89 → round to $14.
Should I price my drinks based on what competitors charge?
Use competitor pricing as a sanity check, not as your primary method. If competitors charge $12 for a margarita but your ingredient costs are higher, copying their price means you run a worse margin. Know your own numbers first.
How often should I review my bar drink prices?
Review pricing quarterly at minimum — or immediately after any significant change in spirits, beer, or wine purchase costs. Even a 10% cost increase on your most-used spirit meaningfully impacts pour cost across multiple cocktails.
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