Potential Beverage Cost Calculator

First gather data sources you will need to complete the analysis:

• December 2023 P&L – contains 2023 and 2022 YTD total beverage revenues and typically a breakdown of beverage revenues by venue/dept and sometimes by category (liquor/beer/wine). Also contains property beverage costs sometimes broken down by category (liquor/beer/wine). Sometimes beverage costs will also be broken down by venue, but in most situations these numbers come from an accounting allocation process and are not reflective of actual costs
• POS 2024 YTD Menu Item Sales Report by Venue (or 2023) – contains item sales data that you will need to assess venue mix, category mix, Wine BY Glass mix and premium brand mix.
• Beverage Standards – how much liquor goes onto a standard drink, rocks and martini. Also how much wine goes into a glass of wine.
• Banquets Event Mix – what percentage of events / banquet beverage revenues come from hosted, package and cash bar events. Sometimes this number is a guess by folks who have the best insight
• Acceptable Variance – This is a tolerance setting that reflects the reality that bartenders do not pour perfectly, will occasionally forget to ring drinks or up charges, and give generous pours or even free drinks in certain guest experience situations. 20% is an example of a common acceptable variance. This means bartenders will average 1.8oz pours on a 1.5oz standard drink operation. This is a guess by folks who have the best insight.

Now plug in the numbers and your adjustment factors (sample data included):

1. Property Beverage Revenues: $3,000,000
2. Banquets Beverage Revenues: $1,000,000
3. Non Banquet Beverage Revenues (Venues / RS / MB): (1-2) $2,000,000
4. Fine Dining Venue Beverage Business Mix (If applicable): 40%
5. Venue Liquor Mix %: 55%
6. Venue Wine Mix %: 35%
7. Venue WBG (Wine By Glass) Mix %: 60%
8. Venue Beer Mix %: 10%
9. Banquet Hosted Event Mix %: 80%
10. Banquet Package Event Mix %: 15%
11. Banquet Cash Bar Event Mix %: 5%
12. Banquet Beverage Pricing: (Low, Normal, High): Normal
13. Venue Premium Wine/Liquor Mix %: 20%
14. Acceptable Variance: 20%
15. Venue Beverage Pricing / Market Situation (Low, Normal, High): Normal
16. Purchasing Cost Situation (Low, Normal High): Normal
17. Regular drink standard (oz): 1.5oz
18. Martini standard (oz): 3oz
19. WBG standard (oz): 6oz
20. Target Venue Liquor Cost (13-15% depending on 13,14,15,16,17,18) 14%
21. Target Venue Wine Cost (21-26% depending on 4,7,13,14,15,16,19) 23%
22. Target Venue Beer Cost 11-12% depending upon 14,15,16) 12%
23. Target Banquet Bev Cost (9-12% depending on 9,10,11,12,16) 11%

Finally calculate your numbers:

• Expected Banquet Beverage Cost: (2 x 23) $110,000
• Expected Venue Liquor Cost (3 x 5 x 20) $154,000
• Expected Venue Wine Cost (3 x 6 x 21) $161,000
• Expected Venue Beer Cost (3 x 8 x 22) $22,000
• Potential Beverage Cost ($447,000 / $3,000,000) = 14.9%