“You’ll hear this phrase a lot from me, but let it sink in,” says Steve, the Bartender. “Let it sink in.” Changers of Currency! It is such a great sentence. And I’ve been using it in connection with cocktails for a pretty extended period.”
What exactly does it signify? Very simply, alcoholic beverages have huge sales volumes and significant profit margins and are consistently popular in most bars throughout the year.
The Woo Woo is the best illustration of this concept. Some bartenders feel it is beneath them to prepare and serve drinks like this. They enjoy drinks with an extensive list of eight to ten components and their infusions. There is absolutely no problem with it at all. That ought to be supported. Yet, it would help if you never lost sight of the fact that at the end of the year, a Woo Woo will bring you much more money. The same is true for other cocktails such as mojitos, strawberry days, sex on the beach, and pina coladas. Naturally frozen in this case. Those are what you refer to as your “Cash Convertors.” If you like web stories then you can go check out our Web stories page.
So, striking a healthy equilibrium is the theme of your cocktail menu. Please don’t make the customer wait for what they want. Yet, there should also be an opportunity for your bartenders to demonstrate their abilities. Yet, the prices of each of these cocktails need to be worked out. You can’t advertise a cocktail with a cost price of £5 yet charge $8 for it on the menu. It makes absolutely no sense from a business perspective.
How do you Figure Out the Price of a Cocktail?
Spreadsheets are often used in bars. Some use applications. Several people still utilize the tried and true notebook and calculator combination. No matter your approach, you must be aware of the associated costs. In addition, you need to be aware of the proportions of each drink.
Let’s start with your Spirit’s foundation. A bottle of 70 cl has 28 individual shots of 25 ml each. 14x 50ml Doubles. Or 46 times (and a little bit) 15-milliliter measurements. If your bottle of JJ Whitley Raspberry Vodka costs you £15, it comes out to 54 pence for a 25-milliliter serving (when rounded up), 1.07 pounds for a double serving, or 33 pence for a 15-milliliter serving.
You will need to repeat this process for each Component, which includes Spirits, Liqueurs, Syrups, Purees, and Mixers…AS WELL AS Fruit, Garnishes, and Ice. Ice is difficult to determine until you purchase it, but you may estimate that each cocktail will cost between 5 and 10 pence. Including the cost of ice in your calculations is essential, as ice machines require water, electricity, and cleaning supplies.
WOO WOO, Should We Come Up With a Standard Cost?
(Please note that the prices listed here are only an example.)
- A bottle of 25 milliliters of vodka costs £15, while one shot costs 54 pence.
- The peach liqueur is priced at £12 a bottle, and each shot costs 43 pence.
- Twelve pence for 75 milliliters of cranberry juice costs £1.50 for a liter and 4 pence per shot.
- Two wedges of lime cost thirty pence, and six wedges cost five pence each.
- Thus ten pence is required to make a cocktail.
- The total for Woo Woo is $1.19.
You have some leeway in terms of the dimensions. For instance, Steve claims that “when I serve a Woo Woo, I pour a 50ml Double of Vodka,” which brings the total cost of the drink to £1.73 in this case.
- The selling price is equal to £7.50.
- Profit = £6.31 per drink
- The gross profit is equal to 84%
In contrast to the typical pint of Amstel, this appears to be quite the moral choice. Imagine that you served Steve’s version, which is just 54 pence more expensive, but you charged £1 more, making the total price £8.50. That’s a profit of additional 46 pence!
High GP VS LOW GP Cocktails
So all that is left to do is repeat this process for every cocktail you intend to sell and evaluate whether or not doing so makes good financial sense. It would be best to shoot for cocktails with an alcohol content of at least 70% grain-proof. It is permissible to have one or two cocktails on a menu priced at 50%, but these drinks need to have a “WOW” factor, and they need to be balanced out by Cash Converters priced at a high percentage. In most cases, your bartenders will demonstrate their abilities as things that count toward your 50% total. Statement items. “Look at what we’re capable of doing!” Increasing the Selling Price, however, would be the far superior choice if you could get a return of sixty percent or more on these items.
Once you have determined how much it will cost to make 20–30 cocktails, it is time to discover the right balance. Getting rid of the overly expensive ones, as well as the ones you have a sneaking suspicion, won’t be as successful in terms of sales. Then limit yourself to 10–15 cocktails that are acceptable for the competition.
You need to be flexible because there are instances when you won’t know anything until after a month has passed, but it doesn’t change the fact that you need to be flexible. You want the gross profit from your whole list to be somewhere in the middle to upper 70s if you can achieve 80% plus. Job done.