Here at BevSpot, we love data. Especially the kind that reveals bar and restaurant industry insights. In this case, we’re looking at trends related to the profitability of some of our country’s most popular cocktails.
Our previous analyses of bar profitability data looked at the industry’s overall profitability metrics. We found that the average pour cost, the preferred measure of efficiency for beverage programs, is around 15% for spirits and cocktails. This means that before paying wages and rent, the median BevSpot bar is getting an 85% gross profit margin on their Moscow Mule.
Actually, that’s a lie. The 15% aggregate pour cost measures general profitability for individual establishments, but it represents an average of all the various drinks being sold by those bars. Costs and pricing can vary widely between drinks, especially cocktails—the profit margin on a bar’s Negroni recipe almost certainly won’t be the same as that of an Old Fashioned.
Knowing the costs and profit margins of various recipes is critical for designing and pricing a successful drink menu. In this and a few upcoming articles, we’ll be crunching these numbers for a range of common cocktails, and we’ve turned it into a complete cocktail profitability report. To make comparing between drinks easy, we broke down these recipes based on the liquors they contain.
To find the profit margins that BevSpot users are pricing into their menus, we compared their drinks’ list prices to their unit costs before adjustments for spillage and comped drinks. We also estimated the basic cost of each recipe by comparing users’ unit costs after those adjustments. Doing this allows cleaner comparisons between each cocktail on two metrics: typical profit margins, and typical unit pour costs.
We’ve looked at sales data from nine metro areas across the United States to see which popular cocktails are the most and least profitable for bars. Here’s what we found for six vodka-based classics.
Of the six cocktails covered here, the Vesper is the most costly for your bartender to serve; the Moscow Mule the most profitable. Since four out of six of these drinks have pour costs of below 15%, it looks like there are plenty of vodka cocktails bar managers can serve while improving their business’ bottom line.
While the Vesper is mostly gin by volume, we’ve included it in this list for ease of comparison with other cocktails containing vodka. You can expect to see it again in an upcoming list of gin-based cocktails. (Subscribe to the blog to make sure you don’t miss it!)
As an aside, this drink first appeared in 1953’s “Casino Royale,” the first of Ian Fleming’s James Bond novels (and the film adaptation starring Daniel Craig). Like Bond, Fleming was a prolific drinker with a taste for good gin, and it shows.
Sign up to the blog to receive the full cocktail profitability report, which will cover pour cost data for 28 of the nation’s most popular cocktails in each primary liquor category, so you can better price drinks for your beverage program.
The estimates in this report are based on data from bars and restaurants in nine metropolitan areas across the continental United States. Product cost and price estimates represent averages of typical drink costs and pricing in these metro areas.