Understanding Liquor Markup and Beverage Cost
For any bar, restaurant, or catering business, mastering the liquor markup is essential for maintaining profitability. Unlike food costs, which can fluctuate wildly, liquor costs are generally more stable, allowing for precise engineering of your menu prices.
How the Calculation Works
Our calculator uses the industry-standard "Beverage Cost Percentage" method. To determine your menu price, the formula is:
Menu Price = (Cost Per Bottle / Ounces per Bottle * Pour Size) / (Target Cost % / 100)
Industry Standards for Beverage Cost
While every venue is different, here are the typical target beverage cost percentages used in the industry:
- Liquor/Spirits: 15% to 20%
- Draft Beer: 15% to 20%
- Bottled Beer: 25% to 30%
- Wine: 30% to 40%
Practical Example
Imagine you purchase a 750ml bottle of premium Bourbon for $45.00. A 750ml bottle contains approximately 25.4 ounces. If your standard pour is 2 ounces, your cost per drink is $3.54.
If your bar aims for a 20% liquor cost, you would divide $3.54 by 0.20, resulting in a suggested menu price of $17.70. To account for "shrinkage" (spills or over-pouring), most managers would round this up to $18.00 or $19.00.
function calculateLiquorMarkup() {
var bottleCost = parseFloat(document.getElementById('bottleCost').value);
var bottleSize = parseFloat(document.getElementById('bottleSize').value);
var pourSize = parseFloat(document.getElementById('pourSize').value);
var targetCost = parseFloat(document.getElementById('targetCost').value);
if (isNaN(bottleCost) || isNaN(bottleSize) || isNaN(pourSize) || isNaN(targetCost) || targetCost <= 0) {
alert("Please enter valid positive numbers in all fields.");
return;
}
// Logic calculations
var costPerOz = bottleCost / bottleSize;
var costPerDrink = costPerOz * pourSize;
var targetCostDecimal = targetCost / 100;
var suggestedPrice = costPerDrink / targetCostDecimal;
var grossProfit = suggestedPrice – costPerDrink;
// Display results
document.getElementById('costPerOz').innerHTML = "$" + costPerOz.toFixed(2);
document.getElementById('costPerDrink').innerHTML = "$" + costPerDrink.toFixed(2);
document.getElementById('suggestedPrice').innerHTML = "$" + suggestedPrice.toFixed(2);
document.getElementById('grossProfit').innerHTML = "$" + grossProfit.toFixed(2);
// Show result area
document.getElementById('results-area').style.display = 'block';
}