Written by The Pragmatic CFO. 15+ years running restaurant P&Ls.
This article is part of The Prime Cost Series.
A single bar pour cost number hides where the money goes. Liquor, beer and wine run at very different costs, so a blended 24% can be great or terrible depending on your mix. Track each category against its own target.
The formula
Pour cost = (opening inventory + purchases minus closing inventory) divided by sales, for each category. Count by category, cost by category, sales by category. Your chart of accounts needs separate lines for liquor, beer and wine sales and costs for this to work.
Targets by category
| Category | Typical target | Who says so |
|---|---|---|
| Liquor | 14% to 20% | Backbar and BinWise about 15%, BevSpot 14%, Baker Tilly 20% |
| Draft beer | 18% to 20% | Backbar, BinWise, Baker Tilly |
| Bottled beer | about 25% | Backbar, BinWise, Baker Tilly |
| Wine by the glass | 20% to 45% by tier | Backbar: house 20% to 25%, premium 30% to 35% |
| Wine by the bottle | about 35% | Backbar |
| Whole bar, blended | 18% to 24% | Restaurant365, Backbar, BinWise |
Wine has the widest spread because sources disagree and so do wine programs. Pick a target that fits yours and hold it.
Inside liquor, well drinks run higher cost than premium. WebstaurantStore puts well at about 30% and super-premium at about 15%, so a bar that sells mostly well drinks will sit at the high end of the range.
A worked example
| Category | Monthly sales | Actual cost | Actual % | Target % | Over target |
|---|---|---|---|---|---|
| Liquor | $20,000 | $3,600 | 18% | 15% | $600 |
| Draft beer | $8,000 | $1,760 | 22% | 20% | $160 |
| Bottled beer | $4,000 | $1,040 | 26% | 25% | $40 |
| Wine | $8,000 | $3,040 | 38% | 30% | $640 |
| Total | $40,000 | $9,440 | 23.6% | 20% | $1,440 |
The blended 23.6% sits inside the normal range, so it looks fine. By category, wine and liquor are $1,240 of the $1,440 problem. That’s $17,280 a year, and you now know where to look: wine pricing, comps and pour size, then liquor pours.
Where a wine problem usually hides
In the example, wine ran 38% against a 30% target. Pour size alone can do most of that. A 750 ml bottle is about 25 ounces. Here’s a $13 bottle sold at $10 a glass.
| Pour | Glasses per bottle | Sales per bottle | Pour cost |
|---|---|---|---|
| 5 ounces | 5 | $50 | 26% |
| 6 ounces | about 4.2 | $42 | 31% |
| 7 ounces | about 3.6 | $36 | 36% |
Add a comped glass or two a night and 38% is easy to reach. Liquor works the same way. A bartender pouring 1.75 ounces instead of 1.5 adds about 17% to cost, which turns a 15% target into 17.5%.
Fix it in this order: measure pours with jiggers or a pour test, check comps by bartender, then check menu prices against what the bottles cost today.
Price a drink from its cost
Price = cost per drink divided by target pour cost. A 750 ml bottle that costs $22 is $0.87 an ounce. A 1.5 ounce pour costs $1.30. At an 18% target that’s $7.23, so you’d price it at $7.25 or $7.50.
Related: restaurant inventory management, bar inventory software compared and food cost by concept.
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More on this: theoretical vs actual food cost.
Track bar cost the same way as food.
The Toolkit’s Food Cost Calculator compares ideal and actual cost by category, bar and alcohol included, and flags the category that is slipping.
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What is a good pour cost for a bar?
18% to 24% blended, according to Restaurant365, Backbar and BinWise. By category, liquor runs lowest and wine highest.
How do you calculate pour cost?
Opening inventory plus purchases minus closing inventory, divided by sales. Do it separately for liquor, beer and wine.
Why is my wine cost so high?
Usually pricing, comps or pours that run heavy. Wine targets run about 30% to 35%, higher than liquor or beer.
How often should I count the bar?
Weekly. Monthly counts find problems too late to fix that month.