Restaurant margins on alcohol against food, venue by venue
What the answer looks like
Illustrative output on sample data
Illustrative example: how Lexi answers this for a fine dining group with four venues. It joins POS sales to supplier costs for wine, spirits and food over the last quarter.
- Venue 1: beverage sales $820,000, cost $205,000. Beverage margin = (820,000 - 205,000) ÷ 820,000 × 100 = 75%. Food margin 68%.
- Venue 2: beverage margin 66%, food margin 69%.
- Venue 3: beverage margin 74%, food margin 70%.
What the data shows
Venue 2 earns less on drinks than on food, the reverse of every other venue.
What it means
Pour cost at Venue 2 is 34%, against 25% elsewhere. Most of the gap comes from wine by the glass, where open bottles go unsold.
What to do
Shorten the by-the-glass list at Venue 2 and use smaller-format bottles for slow sellers.
Want me to rank Venue 2's wines by waste?
Pour cost and beverage margin formula
Why it matters
Drinks usually carry the highest margin on the menu, so a venue's drinks performance can make or break its profit. Comparing alcohol and food margin by venue shows where pour cost is creeping, where guests order fewer drinks, and which venues have the most to gain.
Frequently asked questions
What margin do restaurants make on alcohol?
Drinks usually earn a higher gross margin than food, because the cost of a pour is a small share of its price. The exact figure depends on your mix of wine, beer and spirits and your pricing, so compare venues with each other and with their own history.
What is pour cost?
Pour cost is beverage cost as a share of beverage sales, so a $12 cocktail that costs $3 to make has a 25% pour cost. Rising pour cost often points to over-pouring, waste on open bottles or prices that have not kept up with supplier costs.
How can a restaurant improve its alcohol margin?
Check pour cost by venue and by drink type, then act on the biggest gaps. Measured pours, a shorter by-the-glass list, regular price reviews and staff training on pairings all help, as does tracking waste on bottles opened but not finished.