The Cost of a Cocktail-Presentation

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GENERATIONS OF COCKTAIL COST

“The chief point is to be liberal in the allowance for expenses, and there is then the possibility of greater profits than were expected.”

–Harry Johnson’s Bartenders’ Manual and a Guide for Hotels and Restaurants, 1882

ELEMENTS OF COCKTAIL COST

PRIMARY COSTS:

1. PRIMARY INGREDIENTS – ALCOHOL, PRODUCE, SYRUPS, BITTERS, ICE, GARNISH, ETC.

2. SERVICE ITEMS– GLASSWARE, STRAWS, BEVERAGE NAPKINS, COCKTAILS PICKS, ETC.

SECONDARY COSTS:

3. PRICE VARIANCES – HAPPY HOUR, PROMOTIONS, ETC.

4. MARGIN OF ERROR & WASTE – FREE POURING, JIGGER ERROR, SPILLS, BAR COMPS, ETC.

5. SERVICE LABOR – TIME REQUIRED TO SERVE THE COCKTAIL

PRIMARY COSTS: SPIRITS

LITER : OUNCE RATIOS.750 LITER = 25.360521 LITER = 33.81402 OUNCES1.75 LITER = 59.17454

STANDARD DAIQUIRI RECIPE

2 OUNCES PLANTATION 3 STAR RUM = $0.82.75 OUNCES LIME JUICE.25 ONCES SIMPLE SYRUP1 LIME WEDGE1 BEVERAGE NAPKINGLASSWARE SERVICE COST

COST OF PLANTATION 3 STAR RUM (OZ)1 LITER = $13.80$13.80 / 33.81402 = $0.40811474

PRIMARY COSTS: SPIRITS

TIPS FOR REDUCING COST:

1. BRAND SUPPORT: WHEN AVAILABLE (AND LEGAL IN YOUR STATE) GET SOME. BUT, SERIOUSLY…DON’T BE A SELLOUT OR COMPROMISE YOU BAR’S IDENTITY.

2. BUY HANDLES (1.75 LITERS). INFUSIONS, BLENDS OF SPIRITS, OR GROW SOME MUSCLES. A HANDLE OF BEEFEATER FITS IN A STANDARD SPEEDRAIL.

3. GET PRODUCTS ON CLOSE-OUT. BRANDS SWITCH DISTRIBUTORS FREQUENTLY, AND IT DOESN’T MEAN THEY ARE INFERIOR PRODUCTS. BUY AT A DISCOUNT!

4. USE PIERRE FERRAND…THANKS TO OUR SPONSOR! ALSO, THIS ISN’T JUST A PLUG…BRANDS LIKE PIERRE FERRAND, WHO ARE LARGE ENOUGH TO WIDELY DISTRUBUTE A QUALITY PRODUCT FOR A FAIR PRICE, BUT AT THE SAME TIME DON’T BUILD HUGE ADVERTISING BUDGETS INTO YOUR PRICE PER BOTTLE, ARE IDEAL FOR COCKTAIL BARS.

PRIMARY COSTS: JUICE & PRODUCE

CASE PRICE : LITER YIELD1 CASE = 3.60 LITERS1 LITER = 33.81402 OUNCES


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP1 LIME WEDGE1 BEVERAGE NAPKINGLASSWARE SERVICE COST

COST OF LIME JUICE (OZ)1 CASE = $22.36$22.36 / 3.60 (L YIELD) = $6.22 (LITER)$6.22 / 33.81402 = $0.18394737


CASE PRICE : LITER YIELD1 CASE = 200 LIMES


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP1 LIME WEDGE = $.02 (LIME WEDGE COST)1 BEVERAGE NAPKINGLASSWARE SERVICE COST

COST OF LIME WEDGE (OZ)1 CASE = $22.36 $22.36 / 200 LIMES = $0.1118 (LIME)$0.12 / 6 = $0.02 (WEDGE)



1. BUY SIZED LIMES FOR GARNISH, AND BUY PACKER LIMES FOR JUICING.

2. TAKE WEEKLY PRICES FROM VARIOUS DISTRIBUTORS BEFORE BUYING IF YOU’RE A SMALL OPERATION OR ONLY BUY FOR ONE BAR PROGRAM.

3. BUY IN BULK THROUGH DISCOUNT CONTRACTS OR GROUP ORDERS FOR MULTIPLE BARS PROGRAMS.

4. BUY PRODUCE IN FUTURES IF YOU GO THROUGH ENOUGH OF IT. MOST BAR GROUPS WITH 6-8 OR MORE ESTABLISHMENTS ROTATE AS MUCH CITRUS DAILY AS A GROCERY STORE, WHICH BUYS WHOLESALE IN FUTURES.

PRIMARY COSTS: SYRUP & SIMILAR

POUNDS : KILOGRAMS1 BAG = 50 LBS.1LB. = .4535924 KILOGRAMS


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP = $0.06 (OUNCE COST X.25)1 LIME WEDGE = $0.02 (LIME WEDGE COST)1 BEVERAGE NAPKINGLASSWARE SERVICE COST

COST OF SIMPLE SYRUP (OZ)30 LBS. = 480 OUNCES SIMPLE SYRUP1 OUNCE = $0.06 (SEE NEXT SLIDE)



1. UNDERTAKE EASILY PREPARED INGREDIENTS DURING BAR SHIFTS.

2. PRODUCE PERISHABLE INGREDIENTS IN SMALLER QUALITIES TO AVOID WASTE.

3. PRODUCE STABLE INGREDIENTS IN LARGER QUANTITIES TO REDUCE LABOR COSTS.

4. CONSIDER NOT MAKING EVERYTHING IN HOUSE. THERE’S SOME INCREDIBLE BOTTLED PRODUCTS MADE BY FOLKS WHO PROBABLY MAKE A BETTER ORGEAT THAN YOU DO.

PRIMARY COSTS: SERVICE ITEMS

CASE : UNIT1 CASE = 3000 FOUR-PLY NAPKINS


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP = $0.06 (OUNCE COST X.25)1 LIME WEDGE = $0.02 (LIME WEDGE COST)1 BEVERAGE NAPKIN = $0.02GLASSWARE SERVICE COST

COST OF SIMPLE SYRUP (OZ)1 CASE = $53.38 $53.38 / 3000 = $0.01779333 (UNIT)


CASE : UNIT1 CASE = 36 5.5 OZ COUPES


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP = $0.06 (OUNCE COST X.25)1 LIME WEDGE = $0.02 (LIME WEDGE COST)1 BEVERAGE NAPKIN = $0.02GLASSWARE SERVICE COST = $0.07

COST OF GLASS SERVICE (PER COCKTAIL)1 CASE = 36 COUPES$111.60 / 36 = $3.10 (UNIT)COUPES SERVED MONTHLY = 1,650COUPES BROKEN = 3434/1,650 = 2.06% (BREAKAGE CHANCE)2.06% X $3.10 = $0.06387879



1. BUY GLASSWARE IN BULK AND STORE IT FOR EXTENDED PERIODS IF YOU CAN AFFORD TO DO SO. OTHERWISE, GROUP ORDER WITH OTHER BARS.

2. PURSUE NON-TRADITIONAL GLASSWARE SOURCES LIKE ALIBABA.COM.

3. AVOID ITEMS THAT PEOPLE WHO ARE INTOXICATED ARE LIKELY TO STEAL.

4. SERIOUSLY QUESTION IF YOUR DESIRES FOR EVERYTHING TO BE AS PRETTY, BRANDED, OR DURABLE AS POSSIBLE MATCHES WITH YOUR GUESTS’ EXPECTATIONS FOR PRICING, ADVERTISING, OR QUALITY.

PRIMARY COSTS SUMMARY: DAIQUIRI


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP = $0.06 (OUNCE COST X.25)1 LIME WEDGE = $0.02 (LIME WEDGE COST)1 BEVERAGE NAPKIN = $0.02 GLASSWARE SERVICE COST = $0.07

TOTAL PRIMARY COSTS = $1.17COCKTAIL PRICE = $8.00TOTAL COSTS OF GOOD SOLD % = 14.625% NET PER COCKTAIL = $6.83

SECONDARY COSTS: PRICE VARIANCES


2 OUNCES PLANTATION 3 STAR RUM = $0.82 (OUNCE COST X 2).75 OUNCES LIME JUICE = $0.18 (OUNCE COST X .75).25 OUNCES SIMPLE SYRUP = $0.06 (OUNCE COST X.25)1 LIME WEDGE = $0.02 (LIME WEDGE COST)1 BEVERAGE NAPKIN = $0.02 GLASSWARE SERVICE COST = $0.07

TOTAL PRIMARY COSTS = $1.17COCKTAIL PRICE = $8.00 HAPPY HOUR PRICE = $5.00COST % = 14.625 HAPPY HOUR COST % = 23.40NET PER COCKTAIL: $6.83 NET PER COCKTAIL: $3.83

$6.83 - $3.83 = $3.00 (LOSS). $3.00/$3.83 = 78% (BREAK-EVEN %). THE DAIQUIRI HAPPY HOUR MUST THEREFORE GENERATE A 78% INCREASE IN SALES TO NET THE SAME PROFITS THAT THE BAR WOULD AT STANDARD PRICING.

SECONDARY COSTS: MARGIN OF ERROR, SPILLS & WASTE1. RATIO MEASUREMENT: FREE POURING VERSUS JIGGERS

A. FREE POURING = MORE EFFICIENT DURING RUSHES, HIGHER MARGIN OF ERROR. BETTER FOR HIGH-VOLUME ENVIRONMENTS LIKE NIGHTCLUBS.

B. JIGGERS = LESS EFFICIENT DURING RUSHES, LOWER MARGIN OF ERROR. BETTER FOR SLOWER-PACED, PRODUCT-FOCUSED COCKTAIL BARS.

2. SPILLS & WASTE: MISPOURS, GUEST MISTAKES, GUEST DISLIKES, ETC.

3. DRINK DEVELOPMENT: COST OF COCKTAIL CREATION & TRAINING.

4. COMPLIMENTARY DRINKS: REWARDS FOR REGULARS

SECONDARY COSTS: SERVICE LABOR

ETHICS OF PRICING: SPIRITS SALES

1. COST % MODELS: CONSISTENT SCALES VS. PROGRESSIVE SCALES

A. CONSISTENT SCALE = GUESTS PAY A PERCENTAGE MARKUP THAT MAINTAINS A CONSISTENT COST OF GOODS SOLD % REGARDLESS OF PRICING.

B. PROGRESSIVE SCALE = GUESTS PAY A PERCENTAGE MARKUP THAT IS HIGHER FOR LOWER-PRICED ITEMS LOWER FOR HIGHER-PRICED ITEMS.

ETHICAL CONCERNS:-IS IT FAIR TO REWARD THE WEALTHY FOR SPENDING MORE?-IS IT THE OBLIGATION OF THE BAR OPERATOR TO BE CONSISTENT WITHIN THE CONFINES OF EITHER CHOSEN COST % MODEL?-SHOULD THE BAR OWNER FAVOR CERTAIN BRANDS BY INCREASING THE COST % OF THE SPIRITS SOLD TO MAKE THEM MORE ATTRACTIVE TO GUESTS?

ETHICS OF PRICING: COST % PRICING

ETHICS OF PRICING: COCKTAIL SALES

1. COCKTAIL MENU MODELS: CONSISTENT PRICES VS. INDIVIDUAL PRICES

A. CONSISTENT PRICES = ALL COCKTAILS MAINTAIN A CONSISTENT PRICE REGARDLESS OF COST OF GOODS FOR CREATING THE DRINK. I.E. “ALL DRINKS $12”

B. INDIVIDUAL PRICES = ALL COCKTAILS ARE PRICED INDEPENDENTLY ACCORDING TO THE SUBJECTIVE DECISIONS OF THE HOUSE.

ETHICAL CONCERNS:-IS IT FAIR FOR THE PERSON HAVING A VODKA COCKTAIL THAT COSTS $1.53 TO MAKE TO PAY THE EXACT SAME PRICE AS THE SAZERAC DRINKER WITH MORE STREET CRED WHO’S COCKTAIL COSTS $2.53 TO MAKE?-DO BAR OWNERS REGULARLY TAKE ADVANTAGE OF LESS-SAVVY CONSUMERS BY SERVING THEM A LESS VALUABLE COCKTAIL FOR THE SAME OR HIGHER PRICES THAN MORE VALUABLE COCKTAILS?

ANVIL’S BREAK-EVEN BOTTLE SERIES

The Cost of a Cocktail-Presentation

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