Many bars set prices by feel, or by looking at the bar down the street. Both have their place, but neither tells you whether a drink covers its cost. This guide shows how to price cocktails from a target pour cost (CMV, as it is called in Brazil): start from what the drink costs, decide what share of the price that cost should be, and work out the minimum price. Then adjust with judgment.
The examples come from the CostFlow engine, using a fictitious bar with fictitious purchase prices, in Brazilian reais; the math is the same in any currency.
The formula: price = cost ÷ target
Pour cost is cost divided by menu price. Turn it around, and you get the price:
Suggested price = cost of the drink ÷ target pour cost
Take the Caipirinha from the example. Its cost, with ingredients, a 5% waste allowance and ice, is R$ 2.23. At a target of 25%:
2.23 ÷ 25% = R$ 8.92
You can check it: 25% of 8.92 is 2.23. At that price, exactly a quarter of what the guest pays goes to ingredients.
The formula only works if the cost is right. A cost that leaves out ice, garnish or waste gives a suggested price that is too low. How to build the cost is covered in how to calculate cocktail pour cost, and what the card should hold in the cocktail recipe card template.
Set a target per category
One target for the whole menu is simple, but it treats very different drinks the same way. A stirred drink made almost entirely of spirits has a different cost structure from a long drink topped with a mixer. Many bars set a target per category instead.
For this example, the targets are fictitious and only illustrate the method:
- Short and stirred drinks: 20%
- Long drinks: 25%
- Shaken drinks: 22%
Your own targets depend on your concept, your country, your costs beyond ingredients and how you position the menu. There is no standard figure that fits every bar, so treat any number you read as a starting point to test, not a rule.
How to price cocktails with a target table
Here are three drinks from the example, each with its category target:
| Drink | Cost | Target | Price = cost ÷ target | Menu price (rounded) | Resulting pour cost |
|---|---|---|---|---|---|
| Negroni | 7.08 | 20% | 35.40 | 36.00 | 19.67% |
| Gin & tonic | 6.66 | 25% | 26.64 | 27.00 | 24.67% |
| Daiquiri | 3.14 | 22% | 14.27 | 15.00 | 20.93% |
Three steps, in order:
- Divide the cost by the target. This is the lowest price that meets the target.
- Round up to a menu price. Nobody prints 35.40 on a menu. Rounding up keeps the drink at or under its target.
- Recalculate the pour cost at the rounded price. The Negroni at 36.00 lands at 19.67%, a little under its 20% target. The same happens to the other two.
Always round up, not down. Rounding down pushes the drink above its target from the first day.
The target gives a floor, not the price
This is the most important point in this guide. The price from the formula is the minimum that meets your target. It is not necessarily the right price.
Look at the Daiquiri. By the formula, at a 22% target, it would need to sell for at least 14.27, or 15.00 on the menu. In the example, the bar actually sells it for R$ 26.00. At that price, its pour cost is 12.08%, and it leaves R$ 22.86 per drink after ingredients.
Would cutting the price to 15.00 make sense just because the formula allows it? Probably not. If guests pay 26.00 for that Daiquiri, the formula has only confirmed that the price comfortably covers the cost. The same applies to the Caipirinha: the formula says 8.92 at 25%, and the bar sells it for 16.00.
The floor also works the other way. The bar in the example sells its Negroni for 32.00, below the 35.40 floor for a 20% target, which is why that Negroni runs at 22.13%. That can be a deliberate choice, but it should be a choice, not an accident.
The target protects you from pricing a drink too low. It does not tell you how high you can go.
What else goes into the price
Once the floor is set, other things decide where the price lands:
- Margin in money. Pour cost is a percentage. Rent and wages are paid in money. The margin per drink, menu price minus cost, is what actually covers them. A drink with a low pour cost and a low price can leave less money per glass than a drink with a higher pour cost and a higher price. Look at both numbers.
- Local competition. What similar bars nearby charge for similar drinks sets the range guests expect.
- Position on the menu. A signature drink can carry a different price from a classic everyone knows. Where a drink sits on the menu, and what sits next to it, changes how its price is read.
- Perceived value. Glassware, garnish, technique and the name of the drink all affect what a guest thinks it is worth.
None of these replace the cost calculation. They act on top of it.
Review prices when purchase prices change
A price set from a cost is only as current as that cost. When a supplier raises a price, every drink that uses the ingredient gets more expensive, and its pour cost rises at the same menu price. Recalculate the cost, check it against the target, and decide whether the price needs to move.
The same applies when you change a spec, a brand or a bottle size. Real waste matters as well: if the bar wastes more than the allowance on the cards, the real cost is higher than the card shows. See bar waste and pour cost and theoretical vs actual pour cost.
See the costs behind the prices
The costs in this guide come from the CostFlow engine, the tool Ambar uses to work out the cost of every drink from its recipe spec and purchase prices, and to compare it with a target pour cost. See the example, drink by drink, on the CostFlow engine page.