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Thread: Drink pricing? % mark-up on alcohol

  1. #1
    Join Date
    Apr 2003
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    Florida
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    17

    Drink pricing? % mark-up on alcohol

    Hey everyone,
    I am helping a local restraunt put together their drink menus, and now they are asking me to help them with pricing. I am familiar with local drink prices, but I am not familiar on the correspondence between drink price and percent mark-up of the product. When you set up the drink prices do you look at cost, how much is used per drink, and then determine price by amount of profit desired, or is there a set percent that most of you go by?

    Also, what are drink prices like at your venues? How much for a single, double, mixed drinks (premium/wells)? I just need to get an idea so I can go to them with some idea of what they need.

    Thanks
    Knowledge is power!

  2. #2
    Join Date
    Aug 2003
    Location
    midwest
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    195
    it has to do with your market area and what it can bare partially, the other is percentage and what your costs are.

    I'm curious though, if you don't know then why are they asking you to help? lol

  3. #3
    Join Date
    Apr 2003
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    Florida
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    Yeah...that was what I was thinking when they asked me too! Actually, they asked me because they are new to the area, just moved down from Canada. I am going to be their head bartender and bar manager. The restaurant is opening in Gainesville, and it is a college town that I have lived in for a few years and I know what prices are around town.

    While being a bartender I still did not know the details of the business aspects. I read up a lot last night and have a pretty good idea of what I am talking about now. They are getting their cost sheet this week and want to sit down and discuss it. I assume they are going to want average mark-up, around 18-22% on their liquors and around 30-45% for their beers and wines. Gainesville is a college town filled with poor college kids and drinks are cheap here.

    Anyone have any other advice to contribute?
    Knowledge is power!

  4. #4
    Join Date
    Oct 2003
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    www.shotskis.com
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    I'm sure I'm not saying anything you don't know already, but PRE-MADE shots, shooters always do well in the college towns. They offer an extremely high profit markup, helps builds the reputation of 'cheap drink' specials avaliable, and does not take the time away from the bartenders that are pouring all those thirsty college kids the beers, and last but not least, it creates a true Add-On drink option. Most pre-made shooters will not take away from the original drink purchase that your patrons are going to get anyway.

    Examples: Test tube shots - Bullet shooters - Gelatin shooters (yum) - etc. Just make up 100-200 before you open, and suggestive sell them to go along with their drink order or have a waitress walk around stocked up to the tee with them selling them as she is taking the normal orders.

    Shop around at the options and you can find good pre-made shooter options with 100% markup and more.

    Good luck!
    Bobby Barnes
    Shotski's - Part of the new Florida Bar Supplies, Inc Family
    904-375-1325
    http://www.FloridaBarSupplies.com
    http://www.shotskis.com
    www.BombShots.com
    Bobby@shotskis.com

  5. #5
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    Apr 2003
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    Florida
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    Thanks for the reply. I have previously suggested this to the owners. Also, in town we have two main competing liqour distributors. It is not uncommon for them to eagerly compete for promotional events at venues, i.e. Bacardi, Stoli nights that feature respective drink specials. What really moves in this town is 1) Cheap Beer 2) Cheap Wells 3) All you can drink specials. Bottom line, cheap, however, this is not the type of avenue that the owners are going toward. They want an upscale crowd that will buy premiums/super-premiums. Average menu price for an entree is 17-22$, give or take. Due to this I am going to suggest upselling to try to turn a greater profit. They also expressed to me their desire to do theme nights and afterhour events, so we will see where this leads. I know a martini night is a definate. For those occasions I plan on pushing the wells and as you said, shooters and such. Does it sound like I am on the right track??
    Knowledge is power!

  6. #6
    Join Date
    Dec 2002
    Location
    Western Pennsylvania, USA
    Posts
    132
    Mangas8282:

    I'm a bit confused by the type of operation you are opening. $17-22 avg entrees tells me that you're going after a (for a city the size of Gainesville) rather high-end crowd in your dining profit center. You say you're going to be head bartender/bar manager, but how much of a bar are we talking about? What is the ratio of booze/food sales there and ratio of square feet dedicated to bar/entertainment to sit-down dining? My point being, there is a big difference between pricing for a tavern/inn/bar/nightclub and an upscale table-service restaurant.

    Let me give you a for-instance. If I'm competing for college kids in a mostly night-segment booze/entertainment oriented venue, I'm going to price my drinks much differently than if I'm running a 16-seat "have a ****tail until your table is ready" bar attached to a fancy restaurant.

    The fewer seats you have at the bar, and the more expensive the food menu, the more expensive your drinks will be and the better the bartender and ****tail service damned well better be. Since folks having "just one or two" at a restaurant aren't anywhere near as price-conscience as a college kid looking for the maximum consumption-per-dollar, a restaurant bar should concentrate on higher-end and unique brands, and especially on signature drinks that are low-priced and high-profit with maximum eye and taste appeal.

    You ask how to price, I ask whom I am pricing for.

    Baudtender

  7. #7
    Join Date
    Dec 2002
    Location
    Western Pennsylvania, USA
    Posts
    132
    Yeah, O.K. I've been away a while, but does anybody else find it ironic that after all this time the Nightclub & Bar forum's profanity filter won't allow "****tail" but does allow "c0cktail"?

    Note to self: must r3-l34rn b4r f0rum l33t sp3ak. Coocktail is a dirty word.

    PLEASE JUST CHUCKLE AND DO NOT REPLY TO THIS MESSAGE - I DON'T MEAN TO HIJACK THIS THREAD. Thanks.

    Nudge, nudge, Dave. ;-)

    Baudtender

  8. #8
    Join Date
    Nov 2002
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    NYC
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    355
    ..but it adds character.-it's Dave's 4-star C---tail Bar

    Yes, Baudtender, how much money you have determines how much you can pay and not what you are worth.

  9. #9
    David Guest
    Do guy's remember the dork that was placing all of those porno ads and web addresses on the site last year? That's why anything with the word kock comes out ****tail.

    As for the question. We, in the bar business, figure our percent of profit as pour cost. If you wanted to do it as percent of profit the numbers would be around 400 to 500 %.

    Here's how you figure pour costs.

    Pour Costs have been estimated at 20% for liquor, 28% for bottled beer and 33% for wine. (Cost of Goods divided by Retail Sale Price equals the Pour Cost).

    The lower the number the better the profit.

  10. #10
    Join Date
    Apr 2003
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    Florida
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    OK, I realize that I left out some important details, so here they are. First off, it is a Mediteranean restaurant specializing in Greek cousine. We are taking special care not to alienate non-Greek patrons by offering a large variety of dishes on the menu. The restaurant totals about 4692 sq.ft. The bar area encompasses aroung ~1200-1300 sq.ft. from that total. In the bar area there will be seating for 46 patrons; 4-6 person booths, 2-4 person hightops, and the rest bar stools. The bar has 5 TVs and a sound system. The owners are aiming for the higher end crowd (locals, large professional population) while still drawing in the college crowd by offering drink specials. If I were to characterize it with parallels to other restaurants, I would say it was a mix between Bone Fish Grille and Carrabbas, maybe with a tad more emphasis on the bar. They are going to also offer a large variety of frozen drinks. It has a large outdoor patio area which will be used for seating and live entertainment. Occasionally they will bring in a Greek band and host an International Night. Other then that I am hoping to keep the bar a hip and trendy place to hang out and sip martinis.

    As for ratios of food/alcohol sales. I have no idea. The restaurant is opening on May 6. Gainesville is a very interesting market because it is sway by the student population. Spring semester is ending which mean a great exodus of people. It will not repopulate itself until July when Summer session starts and the incoming Freshmen arrive in town. I have explained this to the owners, but they are new in town and have yet to witness such an event. Summer businees will be very different vs Fall, so we will have to wait and make changes accordingly as the market sways.

    Any other input is greatly appreciated. I am going by the restaurant tomorrow and I can snap some pics with the digi and post them if anyone is interested.
    Knowledge is power!

  11. #11
    Join Date
    Dec 2002
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    Western Pennsylvania, USA
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    Well, yes, hmmmmmm, you indeed left out some important details...

    Curmudgeon and General Weirdness alert (for them that don't recall me)

    Your description:

    >> The restaurant totals about 4692 sq.ft.

    and following:

    >> The bar area encompasses aroung ~1200-1300 sq.ft.

    Strikes me how lopsided these numbers are (in a pleasant way,) compared to most properties discussed in these parts. Point being, if you can't stare at those numbers and understand which side of your bread is buttered, we've got a fundamental point of confusion here.

    As a bar manager, one of your most important jobs is to sell your products at the highest profit, at the highest volume, with the least risk.

    Therefore:

    Brother, spend a great deal of your time considering how to market to those restaurant folks and close the bar at midnight'ish with full tills. Fill those restaurant seats, or your job as "bar manager who worries about filling bar stools" will be moot. These square footage numbers do not support a happening bar and a dead restaurant. Not for long, anyway.

    You do realize that you have to clean up after my messy brainstorms, eh? What the hell do frozen drinks have to do with Mediteranean cuisine? I'm thinking Ouzo and Metaxa in ice shot glasses with a ritual "KALYMATA!" toast.

    Yell it out LOUD - scream it now! It rolls easily out of the gullet and echoes off the walls and is the very embodiment of fun!

    If you're lucky enough to work for a place that has an actual (and ancient) theme, research it and SELL IT. You're a lot better off than us poor dishevled Scots/Irish bastards in the U.S. who have to lean on the bar, rather than our cusisine (and there's a good reason for that no matter what the Emeril Channel tries to gussie up for St. Pat's week.)

    Don't sell a drink, don't sell a dinner, sell an unforgettable and unique experience. Oherwise, send them to a supermarket or a fast-food joint.

    Convince yourself, and your boss that your job is to fill ALL of the seats and have everyone talking the next day about the wonderful time they had last night. If the restaurant is kicking ass, the bar will fill. People attract people.

    I'm not suggesting that you ignore the bar, but instead take a hard look at how it fits into your wallet.

    The hardest part, of course, is for a first-time bar manager to get healthy, wealthy, or wise.

    Pick one. I say now that "drunk, "mean", "ornery", "angry nudist" and "basket case" are strictly contraindicated behaviors (although "pull my finger" is still protected by the Geneva Convention - look it up.) If you think this paragraph is humor, you're in for a dark, humorous surprise.

    And I do wish you the best of luck.

    Baudtender

  12. #12
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    Aug 2003
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    That's right Baudtender, >> people DO attract people <<- that explains why 2 similar establishments [restaurants are a good example of this] often show one empty whilst the one next door has a waitlist! [mind you, I atypically pick the quiet one just for the fact that, if they've got the goods-- then they'll try harder]

    lots of people=must be good -- common premise. The goal to pack it out takes care of itself
    Last edited by doppelganger; 04-15-2004 at 05:21 AM.
    Dirk

  13. #13
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    Apr 2003
    Location
    Florida
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    Baudtender, that was a very informative and humerous reply, and by all means you are a 100% right. Lately most of my conversations with the owners has been to that extent; trying to figure out how to make their two target audiences, professionals and students, coexist. I do have advantage because I myself am Greek and I am familiar with this type of establishment. Don't worry there is a specialty Ouzo shot on the menu, and even though I despise Metaxa I will have it in stock. That was a little harder then expected to find a distributor who carried them. The great advantage they have is an enormous patio area fully equiped with fountain, outdoor seating, table, lanterns, and heat lamps for those colder nights. I will take all that you have said into consideration and definately focus on the "experience" and filling the restraunt as apposed to my measly 46 seats in the bar!

    Here are a couple pics so you can get an idea. Remember, its not finished yet
    Attached Images Attached Images
    Knowledge is power!

  14. #14
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    Apr 2003
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    Here is another....
    Attached Images Attached Images
    Knowledge is power!

  15. #15
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    Apr 2003
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    and another...
    Attached Images Attached Images
    Knowledge is power!

  16. #16
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    Florida
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    Here is one of part of the patio, to the left is the fountain area.....
    Attached Images Attached Images
    Knowledge is power!

  17. #17
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    Florida
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    Last one....
    Attached Images Attached Images
    Knowledge is power!

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