As our users know, we at BevSpot care a lot about data. What we’ve found in the past was that pour cost, the preferred measure of efficiency for beverage programs, is around 15% for spirits & cocktails. Under these results, we came to the conclusion this means that, before paying wages and rent, the median BevSpot bar is getting an 85% gross profit margin on their Moscow Mule.
As we’ve dug a little deeper, that conclusion actually turned out to be inaccurate. The 15% aggregate pour cost represents an average of all the various drinks being sold by those bars. Veteran bar owners and managers will know that 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.
As part of a continuing series on the profitability of cocktails based on spirit, we dive into the world of gin and take a hard look at the profitability of some textbook gin-based cocktails.
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 taken a look at sales data from 9 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 8 gin-based classics.
Of the 8 cocktails covered here, the Last Word is the most costly for your bartender to serve; the Long Island Iced Tea, the most profitable.
Did the results surprise you at all? Personally, we were a little shocked to find out actually how expensive a Last Word could be for a bar program or exactly how profitable a Tom Collins really is. Let us know in the comments what your thoughts were and subscribe to get first notice on future installments in this series as we cover the rest of the spirits (tequila/mezcal and rum).
This data was sourced from BevSpot customers located in nine metropolitan areas across the continental United States. Product cost and revenue estimates represent sales-weighted averages of typical drink costs and pricing.
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