Drink Cost Percentage

What drink cost percentage actually means

Drink cost percentage is pour cost applied to a single menu item. It answers the question: how much of the price of this specific drink gets eaten by the ingredients? A $12 cocktail with $2.40 in ingredients has a drink cost percentage of 20 percent. That is the target for most cocktail programs.

Bar-wide pour cost is the average. Drink cost percentage is the individual number per menu item, which is where real menu engineering decisions get made.

The formula

Drink Cost % = Total recipe cost / Menu price

Example: a Margarita recipe costs $3.10 in ingredients (tequila, lime juice, agave, salt, lime wheel). The menu price is $13. Drink cost percentage is $3.10 / $13 = 23.8 percent.

That drink is slightly above a 20 percent target. Options: raise menu price by $1, cheaper tequila, smaller pour, or leave it alone because the volume makes up for the margin.

Why per-drink cost matters more than bar-wide

A bar can have a healthy 21 percent bar-wide pour cost and still have a handful of drinks at 35 percent that are quietly eating margin. Bar-wide numbers hide individual disasters. Drink cost percentage exposes them.

The first time most managers run per-drink cost on their menu, they find 3 to 5 drinks running way above target. Those are usually the drinks with expensive spirits, fresh juice, or house-made syrups that never got recosted.

Industry benchmarks by drink type

Typical drink cost percentage targets by category:

• Well cocktails (vodka soda, rum Coke): 15 to 20 percent
• Call cocktails: 18 to 22 percent
• Craft cocktails with fresh juice: 20 to 25 percent
• Premium signature cocktails: 22 to 28 percent
• Top-shelf or top-shelf-forward: 25 to 32 percent
• Wine by the glass: 25 to 35 percent
• Draft beer: 18 to 25 percent
• Bottle beer: 22 to 30 percent

These are targets, not rules. A signature drink that pulls customers through the door is worth a 28 percent cost if it drives volume.

A concrete example

A craft cocktail bar has a signature called the Smoke Show. Recipe cost is $4.20: 2 oz mezcal, fresh lime, house chili syrup, grapefruit, smoked salt rim. Menu price is $14. Drink cost percentage is 30 percent.

Is that a problem? It depends. If the drink sells 200 a month and is the bar’s most Instagrammed item, the 30 percent cost is worth it. If it sells 25 a month and takes 3 minutes to build, it needs to be reworked or cut.

Common mistakes

Targeting the same cost percentage across all drinks. Not including garnishes and modifiers. Using old cost data. Ignoring per-drink cost because “the bar average looks fine.” Refusing to raise prices on over-target items because of fear.

How PourIQ handles it

PourIQ shows drink cost percentage on every menu item in real time, color-coded by whether it hits your target, is slightly off, or is way off. You see the 3 to 5 drinks that need pricing or recipe attention immediately, without digging through a spreadsheet.