Beverage Margins: The Most Underused Lever in Restaurant Profit
Two tables spend $180 each. The first spends all of it on food. The second spends $130 on food and $50 on wine. At typical cost ratios the second table leaves roughly $12 more in your pocket — same revenue, same service time, same table turn.
Multiply that across a full room and a full week and beverage stops being a side consideration.
The gap, in numbers
Food runs at 28–35% cost. A well-managed beverage program runs at 18–25%. Roughly ten points of margin, on every dollar that moves from one column to the other.
| Category | Target cost | Notes |
|---|---|---|
| Spirits | 15–20% | Highest margin; most theft-prone |
| Draught beer | 20–25% | Watch line waste and yield |
| Wine by the glass | 20–28% | Depends on bottle yield |
| Bottled wine | 30–40% | Lower % but high dollar margin |
| Coffee | 12–18% | Best ratio on the menu |
| Soft drinks | 10–15% | Rarely sold deliberately |
Track beverage separately from food. A combined "COGS" line hides everything. If your blended cost is 29%, you can't tell whether food is under control and drinks are leaking, or the reverse.
Percentage versus dollars, again
Bottled wine has the worst cost percentage in the table and is often the most profitable line in the building.
A bottle costing $18 and selling at $52 is 35% cost — but $34 of margin in one transaction requiring almost no labour. A glass of house white at 24% might return $9. The percentage flatters the glass; the dollars favour the bottle.
This is the same trap as menu pricing by ratio alone. Watch percentages to catch waste and theft. Watch dollars when deciding what to sell.
Where beverage margin leaks
Free pouring
In my own bars, a 30ml spirit poured by eye routinely came out at 35–40ml. That's close to a third of your margin gone on every drink, and it's invisible — no waste, no breakage, nothing to see. Jiggers or measured pourers close it immediately. Staff resist for about a fortnight.
Wine by the glass yield
A 750ml bottle should give five 150ml glasses. Poured generously it gives four, and your cost percentage rises by a quarter. Marked glassware or a measured pourer solves it.
Draught losses
Line cleaning, foaming, and settling waste consume real volume. Some is unavoidable; much is training and gas pressure. Compare kegs purchased against pints sold monthly — the gap is often larger than anyone expects.
Comps and staff drinks
Every comped round is margin. That doesn't make it wrong — it's often good business — but it needs recording. Untracked comps show up as an unexplained cost problem rather than a deliberate decision.
Selling more without being pushy
The difference between a good beverage program and an average one is mostly staff knowledge, not scripts.
- Ask about drinks before handing over menus. Once people are reading food, the moment passes.
- Offer a specific choice, not a category. "Can I get you a drink?" invites no. "We've got a Marlborough sauvignon or a local pale ale on tap" invites a decision.
- Pair two or three dishes deliberately and print the pairing. It removes the choice problem that stops people ordering wine.
- Let staff taste everything. Nobody recommends a wine they haven't tried. A weekly ten-minute tasting outperforms any incentive scheme.
The non-alcoholic opportunity
A meaningful share of guests aren't drinking — driving, pregnant, in recovery, or simply not interested. Most restaurants offer them soft drinks from a gun and lose the sale.
A house-made soda, a decent non-alcoholic aperitif, or a proper mocktail sells at $9–12 with an ingredient cost under $2. The margin rivals spirits, and the guest who would otherwise have drunk tap water spends like a drinker.
It also changes who chooses your restaurant. Groups accommodate their non-drinking members, and being the place with something interesting for them is worth more than the drink itself.
See your beverage cost separately
Use detailed P&L mode to split beverage from food and see each as a percentage of revenue.
Use the free calculator →