How to Cost a Cocktail: A Practical Guide (with a Free Excel Template)
- infothedoublestrai
- 2 days ago
- 8 min read
Costing a cocktail is not just an Excel exercise. It decides whether a best-selling Negroni pays the rent or slowly erodes the bar’s margin over a season.
Two drinks can look identical on the menu but behave very differently in the P&L. Without precise costing, decisions about price, garnish or promotions are based mostly on instinct. With precise costing, they become controllable levers.
FREE DOWNLOAD — COCKTAIL COSTING TEMPLATE (EXCEL)
If you want to apply the formulas in this guide instantly, download the spreadsheet I use for cocktail costing and menu pricing (See Section 9 for more details).
Available for The Double Strainer newsletter subscribers so the file can stay updated over time.
SECTION 1 – WHAT “COCKTAIL COST” REALLY MEANS
Before diving into spreadsheets, it helps to define a few key terms.
Recipe cost (cost per serve): The total direct cost of all ingredients used in one cocktail: spirits, liqueurs, juices, syrups, modifiers, garnishes, etc.
Pour cost / beverage cost %: The percentage of the selling price that is made up by the recipe cost.
Formula: Pour Cost % = (Recipe Cost / Selling Price) × 100
Gross profit (GP) and GP %: Gross profit is Selling Price minus Recipe Cost.
Formulas: GP = Selling Price – Recipe CostGP % = (GP / Selling Price) × 100
Pour Cost % + GP % = 100%.
Most operations work with a target pour cost %(for example 18–22% in high-end hotels, 25–30% in some neighbourhood bars).Costing each drink correctly is the only way to know if a menu actually hits that target.
SECTION 2 – QUICK REFERENCE: CORE FORMULAS
For readers who want the shortcuts first:
Recipe Cost = Sum of all ingredient costs in one cocktail
Cost per ml = Bottle Cost / Bottle Volume (ml)
Cost per ml of juice = Cost of fruit used / Total ml of juice obtained
Final Recipe Cost = Base Recipe Cost × (1 + Waste %)
Pour Cost % = (Recipe Cost / Selling Price) × 100
GP = Selling Price – Recipe Cost
GP % = (GP / Selling Price) × 100
Selling Price (from target pour cost) = Recipe Cost / Target Pour Cost %
The following sections show how these formulas work in practice.
SECTION 3 – STEP BY STEP: FROM BOTTLE TO COST PER SERVE
Step 1 – Gather the data
For each product in the bar:
Purchase cost (what the bar pays, after discounts)
Pack size (ml, g, pieces)
Expected yield (how much usable liquid or product is obtained)
Unit of measure used in recipes (ml, dash, slice, piece, barspoon, etc.)
For fresh ingredients and batches (juices, syrups, cordials, pre-batches), yield is critical.One kilo of limes does not equal one litre of juice behind the bar.
Step 2 – Convert to cost per unit
Bottled products
Convert bottle size to ml (for example 0.7 L = 700 ml).
Calculate:Cost per ml = Bottle Cost / Bottle Volume (ml)
Fresh juices
Track the juice obtained from a known amount of fruit.
Calculate: Cost per ml of juice = Cost of fruit used / Total ml of juice obtained
Syrups and house preparations
Use: Cost per unit = Total ingredient cost / Final usable volume or quantity
Garnishes
Work in cost per piece (for example cost per twist, wedge, cherry, leaf).
Ice
For many bars, ice is treated as part of overhead (water, electricity and machine depreciation).
However, if you buy ice from a supplier or use premium clear blocks and large hand-cut cubes, it can make sense to treat it as a direct cost per serve.
A simple approach is:
- Calculate the total cost of ice purchased or produced in a given period.
- Estimate how many usable cubes or blocks that represents.
- Divide to obtain a cost per cube or per large block, and assign that cost to the drinks that use it.
Step 3 – Cost each ingredient in the recipe
For each line of the spec:
Take the quantity used (ml, piece, etc.).
Multiply by the cost per unit.
Formula: Ingredient Cost = Quantity Used × Cost per Unit
Add all ingredient costs to obtain the Base Recipe Cost.
Step 4 – Add a waste / variance factor
Real bars are not laboratories. There is always some variance:
Over-pouring
Spillage
Broken bottles or dropped garnish trays
Juice and syrups that expire
Complimentary staff or VIP drinks
Many operations add a waste factor of 3–10% on top of the theoretical cost.
Formula: Final Recipe Cost = Base Recipe Cost × (1 + Waste %)
The exact percentage depends on discipline, training and historical beverage variance.
SECTION 4 – NUMERICAL EXAMPLE 1: COSTING A GIN SOUR
Example specs:
45 ml London Dry Gin
25 ml fresh lemon juice
15 ml 1:1 sugar syrup
1 lemon twist garnish
Assume the following purchasing data (currency “C”):
Gin
Bottle size: 700 ml
Bottle cost: C 90.00
Cost per ml gin = 90.00 / 700 ≈ C 0.129
Gin cost in the drink (45 ml):45 × 0.129 ≈ C 5.81 → rounded: C 5.80
Lemon juice
1 kg lemons costs: C 10.00 - Juice obtained: 500 ml
Cost per ml lemon juice = 10.00 / 500 = C 0.02
Lemon juice cost in the drink (25 ml):25 × 0.02 = C 0.50
Sugar syrup (1:1)
1 kg sugar: C 3.00
Water cost: ignored
Final syrup yield: 1,600 ml
Cost per ml syrup = 3.00 / 1600 = C 0.001875
Syrup cost in the drink (15 ml):15 × 0.001875 ≈ C 0.03
Lemon twist garnish
From the same 1 kg of lemons (C 10.00), assume 100 usable twists.
Cost per twist = 10.00 / 100 = C 0.10
Base Recipe Cost
Gin: C 5.80
Lemon juice: C 0.50
Sugar syrup: C 0.03
Lemon twist: C 0.10
Base Recipe Cost = 5.80 + 0.50 + 0.03 + 0.10 = C 6.43
Add a 5% waste factor
Final Recipe Cost = 6.43 × 1.05 ≈ C 6.75
The Gin Sour costs the bar about C 6.75 in direct product cost per serve.
From cost to menu price (20% target pour cost)
Selling Price = Recipe Cost / Target Pour Cost %
Selling Price = 6.75 / 0.20 = C 33.75 → rounded menu price: C 34.00
Check:
Pour Cost % = (6.75 / 34.00) × 100 ≈ 19.9%
The drink hits the 20% target.
SECTION 5 – NUMERICAL EXAMPLE 2: SIGNATURE VS HIGHBALL
A second example shows how different serves with different pour costs behave in real life.
Signature cocktail
Final Recipe Cost: C 9.00
Target pour cost: 20%
Selling Price = 9.00 / 0.20 = C 45.00
GP per drink = 45.00 – 9.00 = C 36.00GP % = (36.00 / 45.00) × 100 = 80%
Simple highball
Final Recipe Cost: C 4.00
Selling price: C 28.00
Pour Cost % = (4.00 / 28.00) × 100 ≈ 14.3%
GP per drink = 28.00 – 4.00 = C 24.00GP % ≈ 85.7%
Monthly impact
Assume in one month:
Signature sells 200 units
Highball sells 600 units
Total GP from signature:200 × 36.00 = C 7,200
Total GP from highball:600 × 24.00 = C 14,400
The highball earns double the gross profit, even though the selling price is much lower.The lesson: costing is not only about one drink’s margin; it is also about how the whole menu works together in volume and GP.
SECTION 6 – WHY PRECISE COSTING IS FUNDAMENTAL
Many bars work with “rough” costing and feel that is enough. It rarely is.
Detailed costing matters because:
Margins are won or lost on small differences: A difference of 0.50–1.00 in recipe cost becomes significant when multiplied by hundreds or thousands of serves per month.
Menu design becomes data-driven: With accurate costs and GP%, a bar can see which cocktails are high margin and which are weak.Specs, prices and even menu layout can then be adjusted with a clear financial goal, rather than on emotion.
Discounts and promotions stay under control: Happy hours, two-for-one offers and partner promotions can destroy profitability if the starting cost is unknown. With proper costing, management can simulate:– the impact of a 20% discount on GP;– whether a drink can be included in free-flow or banquet packages.
Training becomes concrete for bartenders: When bartenders see the cost of an extra free-pour or a wasted garnish tray, pour discipline and prep habits become a shared responsibility, not just a rule from management.
Supplier negotiations become sharper: Clear costings help justify listing fees, support budgets or free stock by showing the volume and visibility a brand receives from each cocktail.
Skipping this level of precision is equivalent to betting the bar’s profitability on memory and luck.
SECTION 7 – COMMON MISTAKES AND BLIND SPOTS
Even experienced operations make similar errors:
Costing only the base spirit: Focusing on “cost per shot” and ignoring juices, syrups, liqueurs and garnish.In modern signatures, non-spirit ingredients can easily represent 30–50% of the recipe cost.
Ignoring batch and prep yield: Cordials, infusions, clarified juices and pre-batches rarely yield 100% of the input.Filtration, straining and evaporation must be reflected in the final cost per ml.
No waste factor: Working only with theoretical yields, as if variance did not exist.Any serious bar should compare theoretical vs actual beverage cost in the P&L and incorporate that gap into recipe costing.
Confusing tax with recipe cost: Depending on the market, menu prices may be shown inclusive or exclusive of VAT and service charge.The key is to know whether the target pour cost is calculated on net price or gross price, and to be consistent.
Not updating costs when suppliers change pricing: Spirit, fruit and dry-goods prices move constantly.If costings are not reviewed at least once per menu cycle (often quarterly), the numbers on paper stop matching reality.
No version control on specs: When recipes change (different spirit, new garnish, increased pour), the costing sheet must change too.Otherwise GP% becomes guesswork.
Treating ice as always “free”: Standard cube ice from an in-house machine can reasonably be treated as overhead in many programmes.
But if your bar buys ice from a supplier, uses clear block ice or hand-cut large cubes, ignoring that cost can distort the true profitability of spirit-forward drinks and highballs where ice is a key part of the service.
SECTION 8 – HOW TO USE COSTING WITH THE BAR TEAM
A costing system is valuable only if it influences daily behaviour.
For bar managers
Review recipe costs and GP% at least once per menu cycle.
Tag each cocktail as high, medium or low GP and decide deliberately which ones to feature on menus, boards and recommendations.
Combine recipe costing with sales mix reports to see which drinks generate the most total gross profit, not just the most revenue.
Use the costing sheet when negotiating with suppliers, showing how listings and signature serves translate into volume.
For working bartenders
Understand which cocktails are high-value for the business and why specs on those drinks are non-negotiable.
Treat every extra 5–10 ml “for free” as real money leaving the bar, not as a harmless gesture.
Remember that garnish and prep are part of cost, not decoration; wasting prep is as expensive as over-pouring spirits.
Use costing as a tool for ownership: a profitable bar is more likely to invest in training, salaries and better tools.
SECTION 9 – DOWNLOAD: COCKTAIL COSTING TEMPLATE
This template is designed for bar managers and bartenders who want a clear, structured way to move from ingredients and costs to a realistic selling price.
The file is free, but reserved for The Double Strainer newsletter subscribers so it can be kept up to date and supported over time.
After you confirm your email, you’ll receive:
The Excel file ready to use
A short instruction page on how to adapt it to your bar
Future updates whenever the template is improved or expanded
SECTION 10 – STRATEGIC DECISIONS BEHIND THE NUMBERS
The framework above assumes that:
Direct product cost is the main focus.
Labour, rent, utilities and overhead are covered by the GP left after product cost.
A single target pour cost % is acceptable for most drinks.
In practice, a professional programme will often:
Use different target pour costs for different families of drinks(for example lower pour cost on labour-intensive signatures, slightly higher pour cost on fast, high-volume highballs).
Consider labour cost per drink for very complex menus or for very high-volume outlets.
Adjust pricing based not only on cost but also on guest perception, competition and brand positioning.
Costing provides the numbers.Strategy decides where to relax or tighten the rules to match the concept, the guests and the market.
Written by Riccardo Grechi
Head Mixologist | Bar Concept Developer | Founder of The Double Strainer
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