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Beverage cost

Beverage cost control: the bar's margin, kept in the till

The bar is where most venues earn their margin — and where it leaks fastest. Drinks carry 70–80% gross margins, but free pours, dead stock, and half-remembered specs can quietly give a fifth of it back. Here are the benchmarks by category, the pour cost method, and the weekly loop that holds it.

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Definition

Beverage cost percentage is the share of a drink's selling price absorbed by its ingredients — the bar's equivalent of food cost. Bars typically target 18–24% overall: roughly 18–20% on spirits and cocktails, 20–25% on beer, and 30–40% on wine, where the bottle does less work per franc.

Pour cost % = ingredient cost ÷ ex-tax selling price × 100

What should each category cost?

Commonly cited pour-cost targets, category by category:

Spirits & cocktails: 18–20% — the margin engine; every point of drift here is expensive
Draft beer: 20–25% — kegs are cheap per serve but leak through foam and unrecorded pours
Bottled beer: 22–28% — little drift, easy to count, low ceiling
Wine: 30–40% by the bottle, better by the glass — price the second glass, not the first

The blended target — 18–24% — matters less than the split. A bar at 23% blended could be a healthy wine-led list, or a cocktail program bleeding five points to overpours. Only category-level numbers tell you which bar you're running.

The 20% problem

Industry audits find bars lose up to 20% of their liquor stock — not to theft, mostly, but to drift: free pours running 10–20% heavy, prep and spillage, unrecorded comps, specs remembered three different ways by three bartenders (Sculpture Hospitality; Bar-i's audit base across 30,000+ bar audits shows 15–20% of poured product lost to shrinkage).

Run the arithmetic on your own numbers: a bar doing CHF 40,000 a month in beverage revenue that loses 15% of poured product is giving back roughly CHF 6,000 a month. That's the margin engine paying for nothing — and none of it shows up until the count.

The method

Controlling beverage cost, week by week

Four habits, in order. Each one makes the next one measurable.

1
Spec every drink — at edible-portion cost
A cocktail without a written spec has as many costs as bartenders. Cost each recipe at real yields: the juice a lime actually gives, the syrup after evaporation, the overpour factor on free-poured spirits. The spec is both the margin calculation and the training document.
2
Price by category, not by rule of thumb
One markup multiplier across the list gives away money on spirits and prices wine off the menu. Set category targets (18–20% cocktails, 30–40% wine), then check each drink against its own target — and let the calculator do the ex-tax math.
3
Count the bar weekly — key bottles more often
Beverage stock is money on a shelf in its most walkable form. A weekly count by section, valued at current purchase prices, turns 'the Negroni feels heavy' into a number. High-value bottles deserve a faster cadence.
4
Close the variance: counted vs sold
Compare what left the shelves to what the till says was sold, category by category. The gap is your shrinkage — overpour, spillage, comps, error — and it's the number the 20% problem hides in. Chase the biggest category first; it's usually spirits.

With methodus

The bar program, costed and counted

methodus runs the whole loop on the tablet behind the bar:

True pour cost on every spec

Each cocktail is costed with real yields, house-made preps, and container sizes — kegs and bag-in-box included, so a draft pour costs against the 20-litre price, not a phantom 750ml bottle. Change a supplier price and every drink updates.

Bar counts by section, on a phone

Back bar, speed rail, cellar — counted shelf-to-screen, valued at current prices, archived for week-over-week comparison. The variance conversation starts from a number.

Deals, compared before you commit

Supplier deals and case offers laid side by side against your actual usage — so the 'bargain' pallet of gin gets judged on cash and shelf-time, not on the rep's enthusiasm.

Price history per bottle

Every invoice updates the purchase price and keeps the trail. When a distributor creeps a price, you see the curve — and the pour cost that moved with it.

The specs hold the margin, the counts catch the drift, and the whole team pours the same drink Thursday night and Sunday noon. What was going down the drain becomes net profit again.

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For the full pour-cost math with yield loss worked through a real Margarita, read how to calculate true pour cost → — and place your own number in the pour cost calculator.

FAQ

Beverage cost FAQ

Bars typically target 18–24% overall: roughly 18–20% on spirits and cocktails, 20–25% on draft beer, 22–28% on bottled beer, and 30–40% on wine by the bottle. The category split matters more than the blend — a healthy blended number can hide an expensive cocktail program.

Divide the drink's ingredient cost by its ex-tax selling price and multiply by 100. The ingredient cost must use real yields — the juice a lime actually gives, syrup after evaporation, and an overpour factor of 10–15% on free-poured spirits — or the number flatters you.

Because the theoretical number ignores drift: free pours running heavy, spillage and prep loss, unrecorded comps, and specs remembered differently across the team. Industry audits find bars lose up to 20% of liquor stock this way (Sculpture Hospitality) — a weekly count against sales, category by category, is the instrument that measures it.

A full count weekly, with high-value bottles counted more often — daily in high-volume rooms. Always at the same moment, valued at current purchase prices, so week-over-week comparisons hold and variance against sales means something.

Container sizes are first-class: a draft pour costs against the actual keg price and volume (20–30L, or bag-in-box for wine), not a default bottle. By-the-glass wine costs per pour against the bottle, and every cost updates when a supplier invoice lands.

Who builds methodus

methodus is built by an operator. Nathaniel Gilliand, École hôtelière de Lausanne graduate, runs restaurants, bars and beach clubs. This is the tool he built to find the margin that was evaporating in his own P&L.

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The bar's margin, poured on purpose

Specs with true pour cost, weekly counts by section, deals judged on your usage, price history per bottle. The drain stops drinking your profit.

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