Mastering Menu Profitability: How to Cost a Drink
Understanding Drink Costing for Profitability
In bar and restaurant management, understanding the cost of each drink on your menu is crucial for maintaining profitability. By conducting cost analysis on the drink menu, bars and restaurants can ensure that their pricing strategies align with their financial goals, like desired product markup, pour cost, and profit margin.
In this article, I’ll delve into the specifics of costing a classic cocktail, the Daiquiri. We’ll explore how to do it the slow, manual way, and then at the end, I’ll show you the quick and easy way (because I know all you bar managers out there are probably trying to get this done before you open for service today!)
Buckle up, things are about to get technical. However, if you want to skip the math and hard parts, you can check out how Spec handles everything for you.
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Still want to see how to do it the hard way? No worries, let's get started.
How to Cost a Drink: The Slow Way
The first step in figuring out how to cost any drink, no matter if you’re doing this the slow or fast way, is to determine what’s in the drink. Duh! But look more deeply, even in our example of the Daiquiri, there’s more than just rum, simple syrup, and lime juice.
Look, I know, figuring out how much your liquor costs isn’t that hard. But if you juice your limes, do you know how many limes it takes to make the juice required for the cocktail, or even, how long it took your barback to juice them? Now think about the simple syrup. Do you know how much white cane sugar is in the glass
What about how much the water costs in the syrup? (Just kidding, we don’t have to nerd out that much. Unless you want to.)
Ok, let’s get started…
Step 1:
Write out a list of all the ingredients (yes, all of them) on a piece of paper or preferably your nearest digital device. No, a bev nap or guest check won’t have enough room!
White Rum (Tip: pick a high-quality rum for a Daiquiri. My favorite right now is El Dorado 3yr. )
Sugar
Water
Limes for the juice (have you heard of Super Juice?)
Limes for the lime wheel garnish
Step 2:
Assemble this list into separate recipes, each with its own ingredients, starting from the ground up and ending with the final drink. Think about how these recipes are prepared daily, and then we’ll worry about how much of each is in your drink later.
Lime Juice:
Ingredient: 30 limes
Simple Syrup:
Ingredient: 1 L water
Ingredient: 1000 g White Cane Sugar
Lime Wheels:
Ingredient: 4 limes
Daiquiri:
Ingredient: 2 fl oz El Dorado 3yr
Ingredient: 1 fl oz Lime Juice
Ingredient: 1 fl oz Simple Syrup
Ingredient: 1 Lime Wheel for garnish
Step 3:
Ok, we’re getting somewhere. Next, we need to add two things to our list.
Record the yield (how much each recipe makes) and the labor involved.
Lime Juice:
Yield: 32 fl oz
Labor: Barback for 30 minutes
Ingredient: 30 limes
Simple Syrup:
Yield: 48 fl oz
Labor: Barback for 30 minutes
Ingredient: 1 L water
Ingredient: 1000 g White Cane Sugar
Lime Wheels:
Yield: 24 wheels
Labor: Bartender for 1 minute
Ingredient: 4 limes
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute
Ingredient: 2 fl oz El Dorado 3 yr
Ingredient: 1 fl oz Lime Juice
Ingredient: 1 fl oz Simple Syrup
Ingredient: 1 Lime Wheel for garnish
Step 4:
Record the cost of how much you pay for each ingredient, and how much you get when you buy it, and convert this number to the unit used in the recipe. Consult the internet for these conversions, unless you’re some kind of math wizz and can do it in your head. Skip doing this for the sub-recipes in the final drink.
Lime Juice:
Yield: 32 fl oz
Labor: Barback for 30 minutes ($0.33 per minute is $20 per hour)
Ingredient: 30 limes ($50 for 100 count case)
Simple Syrup:
Yield: 48 fl oz
Labor: Barback for 10 minutes ($0.33 per minute)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($20 for 4536g bag)
Lime Wheels:
Yield: 24 wheels
Labor: Bartender for 1 minute ($0.17 per minute is $10 per hour)
Ingredient: 4 limes ($50 for 100 count case)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17 per minute)
Ingredient: 2 fl oz El Dorado 3yr ($20 for 25.36 fl oz bottle)
Ingredient: 1 fl oz Lime Juice
Ingredient: 1 fl oz Simple Syrup
Ingredient: 1 Lime Wheel for garnish
Yeah, we’re getting granular with this. But you want to know how much your cocktail actually costs, right?
Step 5:
Divide the amount of ingredients purchased by its cost.
Lime Juice:
Yield: 32 fl oz
Labor: Barback for 30 minutes ($0.30/min)
Ingredient: 30 limes ($50 / 100 count = $0.50/ct)
Simple Syrup:
Yield: 48 fl oz
Labor: Barback for 10 minutes ($0.33/min)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($20 / 4536 g = $0.0044/g)
Lime Wheels:
Yield: 24 wheels
Labor: Bartender for 1 minute ($0.17/min)
Ingredient: 4 limes ($50 / 100 count = $0.50/ct)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17/min)
Ingredient: 2 fl oz El Dorado 3yr ($20 / 25.36 fl oz = $0.79/fl oz)
Ingredient: 1 fl oz Lime Juice
Ingredient: 1 fl oz Simple Syrup
Ingredient: 1 Lime Wheel for garnish
Step 6:
Multiply the ingredient cost you just calculated by the amount used in the recipe.
Lime Juice:
Yield: 32 fl oz
Labor: Barback for 30 minutes ($0.33/min x 30 min = $10)
Ingredient: 30 limes ($0.50/ct x 30 limes = $15)
Simple Syrup:
Yield: 48 fl oz
Labor: Barback for 10 minutes ($0.33/min x 30 min = $10)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($0.0044 / g x 1000 g = $4.40)
Lime Wheels:
Yield: 24 wheels
Labor: Bartender for 1 minute ($0.17/min x 1 = $0.17)
Ingredient: 4 limes ($0.50/ct x 4 limes = $2)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17/min x 1 = $0.17)
Ingredient: 2 fl oz El Dorado 3yr ($0.79/fl oz x 2 fl oz = $1.58)
Ingredient: 1 fl oz Lime Juice
Ingredient: 1 fl oz Simple Syrup
Ingredient: 1 Lime Wheel for garnish
Step 7:
Add all the costs within each sub-recipe and write that in before the yield.
Lime Juice:
Yield: 32 fl oz ($10 labor + $15 limes = $25)
Labor: Barback for 30 minutes ($10)
Ingredient: 30 limes ($15)
Simple Syrup:
Yield: 48 fl oz ($10 labor + $4.40 sugar = $14.40)
Labor: Barback for 10 minutes ($10)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($4.40)
Lime Wheels:
Yield: 24 wheels ($0.17 labor + $2 limes = $2.17)
Labor: Bartender for 1 minute ($0.17)
Ingredient: 4 limes ($2)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17)
Ingredient: 2 fl oz El Dorado 3yr ($1.58)
Ingredient: 1 fl oz Lime Juice
Ingredient: 1 fl oz Simple Syrup
Ingredient: 1 Lime Wheel for garnish
Step 8:
Divide the cost of each recipe by the yield to find that recipe's cost.
Lime Juice:
Yield: $25 / 32 fl oz = $0.78/fl oz
Labor: Barback for 30 minutes ($10)
Ingredient: 30 limes ($15)
Simple Syrup:
Yield: $14.40 / 48 fl oz = $0.30/fl oz
Labor: Barback for 10 minutes ($10)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($4.40)
Lime Wheels:
Yield: $2.17 / 24 wheels = $0.09/wheel
Labor: Bartender for 1 minute ($0.17)
Ingredient: 4 limes ($2)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17)
2 fl oz El Dorado 3yr ($1.58)
1 fl oz Lime Juice
1 fl oz Simple Syrup
1 Lime Wheel for garnish
Step 9:
Move the cost of each recipe down to the final drink’s respective ingredients.
Lime Juice:
Yield: 32 fl oz ($0.78/fl oz)
Labor: Barback for 30 minutes ($10)
30 limes ($15)
Simple Syrup:
Yield: 48 fl oz ($0.30/fl oz)
Labor: Barback for 10 minutes ($10)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($4.40)
Lime Wheels:
Yield: 24 wheels ($0.09/wheel)
Labor: Bartender for 1 minute ($0.17)
Ingredient: 4 limes ($2)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17)
Ingredient: 2 fl oz El Dorado 3yr ($1.58)
Ingredient: 1 fl oz Lime Juice ($0.78/fl oz)
Ingredient: 1 fl oz Simple Syrup ($0.30/fl oz)
Ingredient: 1 Lime Wheel for garnish ($0.09/wheel)
Step 10:
In the final drink, multiply the amount of ingredients by the cost for the sub-recipes, just like step 6.
Lime Juice:
Yield: 32 fl oz ($0.78/fl oz)
Labor: Barback for 30 minutes ($10)
Ingredient: 30 limes ($15)
Simple Syrup:
Yield: 48 fl oz ($0.30/fl oz)
Labor: Barback for 10 minutes ($10)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($4.40)
Lime Wheels:
Yield: 24 wheels ($0.09/wheel)
Labor: Bartender for 1 minute ($0.17)
Ingredient: 4 limes ($2)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17)
Ingredient: 2 fl oz El Dorado 3yr ($1.58)
Ingredient: 1 fl oz Lime Juice ($0.78/fl oz x 1 fl oz = $0.78)
Ingredient: 1 fl oz Simple Syrup ($0.30/fl oz x 1 fl oz = $0.30)
Ingredient: 1 Lime Wheel for garnish ($0.09/wheel x 1 wheel = $0.09)
Step 11:
Add up all the ingredient and labor costs for your drink, and boom. You just answered the ultimate question of how to cost a drink.
Lime Juice:
Yield: 32 fl oz ($0.78/fl oz)
Labor: Barback for 30 minutes ($10)
Ingredient: 30 limes ($15)
Simple Syrup:
Yield: 48 fl oz ($0.30/fl oz)
Labor: Barback for 10 minutes ($10)
Ingredient: 1 L water
Ingredient: 1000 g White Can Sugar ($4.40)
Lime Wheels:
Yield: 24 wheels ($0.09/wheel)
Labor: Bartender for 1 minute ($0.17)
Ingredient: 4 limes ($2)
Daiquiri:
Yield: 1 count or serving
Labor: Bartender for 1 minute ($0.17)
Ingredient: Ingredient: 2 fl oz El Dorado 3yr ($1.58)
Ingredient: 1 fl oz Lime Juice ($0.78)
Ingredient: 1 fl oz Simple Syrup ($0.30)
Ingredient: 1 Lime Wheel for garnish ($0.09)
Total Cost: $2.92 per serving ($0.17 labor + $1.58 El Dorado + $0.78 lime juice + $0.30 simple syrup + $0.09 lime wheel)
The Quick & Easy Way to Cost a Drink
Look, I know what you’re thinking. “Dude, that was a lot of steps and a lot of math.” Or maybe you didn’t read any of that and skipped straight here. I don’t blame you.
So, if you want to know the easy way to do this, first, you need to create a Spec account and activate the 30-day free trial. (Look, you knew that was coming; you clicked on our website after all!)
Not only is pricing your cocktail with Spec faster, but it also has a few other added benefits:
There’s no math involved on your end.
Converting between different units of measurement is done for you.
Prices for your products are kept up to date with our invoicing feature.
The process of building the drink, and all its sub-recipes, is all stored in the Spec mobile app for use by your staff.
Get started with Spec Pro today with a 30 Day Free Trial!
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