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Total cost of spirits and liqueurs used in a period divided by total beverage revenue. Liquor cost focuses specifically on distilled spirits rather than total beverage ingredients — providing a more granular view of spirit-category margin performance.
Liquor cost and beverage cost percentage measure similar things, but beverage cost percentage captures all ingredients (mixers, citrus, garnishes, beer, wine). Liquor cost isolates the spirits spend — useful because spirits are typically the largest single cost component in a cocktail program and the most variable based on brand tier selection.
Industry benchmarks for liquor cost: 18-22% for well-managed full-service cocktail bars, 22-28% for bars with extensive premium programs where spirit cost is high but revenue per pour is also elevated. Free-pour operations without strong inventory controls often run 25-35% without realizing it.
Tracking liquor cost separately from overall beverage cost helps identify where margin problems originate. If overall beverage cost is elevated but liquor cost is on target, the issue is elsewhere (over-use of expensive fresh ingredients, waste in house preps, beer and wine margins). If liquor cost is high, the problem is in the spirit program specifically.
methodus calculates liquor cost at the spec level — separately identifying spirit costs from other ingredient costs so you can pinpoint margin issues by category.
Total beverage cost divided by total beverage revenue.
The percentage of revenue spent on drink ingredients.
Calculating the true cost of every ingredient in a dish or drink.
The difference between theoretical and actual inventory — lost to waste, theft, or overpouring.
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