How to Price Bar Drinks

by Michelle Renee

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Opening a bar can be an exciting experience for an industry professional, but there's also a
lot of work involved. One of the most important things on your to-do list is creating a
favorable and profitable list of cocktails and beverages. Considering how many different
types and brands of liquors are used in the bar business, it may seem, at first, a bit
overwhelming to know how to price bar drinks. The good news is, with a little patience and
perseverance you can establish a profitable drink menu with reasonable prices for your
patrons.
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1. Establish what you'd like your liquor cost to be for each drink. In most bars and
restaurants, an alcohol cost of 20 to 25 percent is pretty standard. However, this estimate
may fluctuate slightly according to the type of establishment you are running. For example,
a sports bar serving numerous beer and drink specials, or a bar and grill hosting a happy
hour, might experience a 30 percent liquor cost, while an upper-class martini bar maintains
an 18 percent cost.

2. Don't include the cost of your mixers. Since many drinks have various ingredients, such as
soda, juices, bloody Mary or sweet and sour mix, you can make your drink pricing
experience much simpler by categorizing your mixers as bar supplies. Focus only on the
alcohol itself when establishing your per-drink expenses.
3. Determine the cost per ounce for each type of liquor you serve. You can easily calculate
how much each ounce of alcohol costs by dividing the cost of each bottle by the amount of
ounces it holds. For example, if your cost for a 33-ounce bottle of liquor is $30, the price per
ounce is about 91 cents. Since different types and brands of liquor have varied price ranges,
you'll need to calculate the price per ounce for each bottle.

4. Multiply the cost per ounce of liquor by the amount added to each drink. You'll need to
estimate your liquor cost for each and every drink you serve. If you're pouring one ounce of
vodka in your screwdrivers, your liquor cost per drink for a $30 bottle of vodka is 0.91 cents.
For a double shot, it's $1.82 per ounce, and so forth. Create a list of your liquor costs for
each drink recipe in your bar menu.

5. Multiply the liquor cost by four or five to establish the price of the drink. Again, the
amount of profit you desire for each drink is determined by you as a bar owner or manager.
To earn a 75 percent profit on each drink, multiply your liquor cost by four. For an 80 percent
profit, multiply by five. At 0.91 cents per drink, a 75 percent mark up would equal $3.64 per
drink. For an 80 percent profit per drink, you'd need to charge $4.55.

6. Round the price up to the nearest quarter. A good policy to abide by is always rounding up
to the nearest quarter. Odd prices like $3.64 or $4.55 are difficult to calculate for bartenders,
cocktail waitresses and customers, especially in high volume establishments. If your 75
percent profit deems the drink worth $3.64, charge $3.75, and charge $4.75 for an 80
percent mark up. In addition to making tabs easier to calculate in fast-paced work
environments, those few extra pennies add up quickly and equal extra profit.