How to Determine Wine Pour Cost/beverage Cost of Sales

When operating a restaurant or bar you are most likely going to sell wine. Wine is a great item in that you can sell it for a considerable marked up price compared to its cost. In addition to having a good cost to revenue ratio, beer and wine liquor licenses are typically much easier to get than a hard alcohol selling permit.

Things You'll Need

• Restaurant or Bar
• Place that sells wine
• Wine
• Calculator
• Papaer & Pen
• Excel Spreadsheet (Preferred)

Instructions

1. Decide what kind of wine or current wine that you sell/want to sell. Some items are obviously more profitable than other ones. An inexpensive local wine might be cheaper than an imported French wine. Depending on the region, wine can be considerably more expensive than others. As the cost of the wine increases, inversely the price you can charge goes down. For example, a wine that costs you $500, doesn't necessarily mean you can charge $2000 to run a 25% pour cost percentage. No matter what you charge, after a certain point no one will purchase your wine, if priced too high. You could have your wine priced perfectly for your pour cost percentage but if no one is purchasing the wine, then who cares.

2. You'll want to know how much each item costs. The typical size of a wine bottle is 750ml, which is 25.36oz. (But there are many other sizes.) You can get either 5, 5 oz glasses from the bottle or 4, 6 oz. glasses of wine. A 6 oz. glass of wine is less yielding, but looks nice in the glass for the guest, and is typical for the hospitality industry. If you purchased the bottle for $1.00 and are getting 4 glasses from each bottle, each glass cost you only $0.25.

3. The pour cost formula is actually fairly simple to calculate. For glasses of wine, the pour cost formula is as follows, (Wine Cost)/(Number of glasses in the bottle x How much you charge for each glass of wine.) In the following example $10(Wine cost)/(4 x $10.00). In this example the pour cost is 25%. Not bad for wine. For pour cost for bottles of wine the formula is even simpler, Cost/Selling Price. For example, $10.00 (cost each bottle)/$40.00 (sale price) = 25% pour cost. The lower the percentage the better and the more revenue generated from each sale. Now that you know what percentage you are running, you can evaluate whether certain items are priced correctly, or should be replaced with less expensive items, that will generate more profit. Happy selling!