The Neat Profit

How to Price Cocktails for Profit

Pricing cocktails isn't guesswork—it's math. Here's the formula, the strategy, and the tools to price every drink for maximum profitability.

The Pour Cost Formula

The foundation of cocktail pricing is pour cost—the ratio of what you paid for ingredients to what you charge for the drink:

Ingredient Cost / Pour Cost % = Menu Price

Example: A cocktail uses 2 oz of gin ($0.80/oz), 0.5 oz of vermouth ($0.20/oz), and a garnish ($0.10). Total cost: $1.80. At 20% pour cost: $1.80 / 0.20 = $9.00 menu price.

Calculating Ingredient Costs

To price accurately, you need the exact cost of every ingredient in every drink:

  • Spirits: Bottle cost / total ounces = cost per ounce × pour size
  • Mixers: Cost per unit × amount used
  • Garnishes: Cost per unit (lime, olive, twist, etc.)
  • Ice: Often overlooked—factor in water and utility costs
  • Glassware breakage: A small per-drink allocation

The Neat Profit automates all of this. Build each recipe once with exact measurements, and the system costs every pour to the cent. When you scan a new distributor invoice, costs update automatically across all recipes.

Menu Engineering: Beyond the Formula

Pricing isn't just about cost—it's about what the market will bear. Menu engineering categorizes drinks by profitability and popularity:

  • Stars: High profit, high popularity — keep these prominent
  • Plowhorses: Low profit, high popularity — consider price increases
  • Puzzles: High profit, low popularity — reposition on menu or rebrand
  • Dogs: Low profit, low popularity — consider removing

The Neat Profit's AI Recipe Optimization analyzes your menu automatically, identifying which items are Stars, Plowhorses, Puzzles, and Dogs—and recommends specific actions to improve overall menu profitability.

Pricing for Premium vs Well Drinks

The 20% pour cost benchmark is a starting point, not a rule. Premium products can sustain higher pour costs because the gross profit dollars are still significant. A $200 whisky flight at 40% pour cost still generates $120 in gross profit. Conversely, well drinks should carry lower pour costs to maximize margin on high-volume items. See our guide on cocktail pricing strategy for bars for more.

Automating Cocktail Pricing

Manually calculating and updating cocktail prices is tedious and error-prone. The Neat Profit automates the entire process:

  • Build recipes once with exact measurements
  • Costs auto-update when invoice prices change
  • Pour cost and margin displayed for every recipe
  • AI suggests price adjustments based on demand elasticity
  • Free Pour Cost Calculator for quick calculations

Frequently Asked Questions

How do I price cocktails for profit?+
To price cocktails for profit, calculate the cost of every ingredient (spirit, mixer, garnish), determine your target pour cost percentage (typically 20%), and set the price at: ingredient cost / pour cost percentage. The Neat Profit automates this calculation for every recipe, updating prices as costs change.
What is a good pour cost for cocktails?+
The industry standard is 20% pour cost—if a drink costs $2 in ingredients, charge $10. Premium cocktails can sustain higher pour costs because gross profit dollars are still significant. The Neat Profit calculates pour cost automatically for every menu item.
How often should I recalculate cocktail prices?+
Recalculate whenever distributor prices change. The Neat Profit handles this automatically—when you scan a new invoice, recipe costs update instantly, so you always know your current margins.
What's the difference between pour cost and margin?+
Pour cost is the ratio of ingredient cost to selling price. Margin is the gross profit percentage. If a drink costs $2 and sells for $10, pour cost is 20% and margin is 80%. The Neat Profit tracks both metrics for every recipe.

Price Every Drink Right

Automated recipe costing with The Neat Profit. Free for single-location bars.

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