Pour cost is always the subject of great discussion and debate in a professional bar. Pour cost is the cost of the ingredients used to make a particular drink and is reflected in the overall bar pour cost as bar sales divided by the cost of goods sold during a given period. Most bar operators set a goal of 18%, 20%, 22% or 24% pour cost, although some concepts may opt for a higher pour cost while others may be aggressive in keeping their pour cost to a minimum.
It is important to understand that pour cost only reflects the cost of the ingredients and does not take into consideration other factors affecting profitability like rent, utilities, insurance and labor. An operator running a cocktail with a 40% pour cost may find it challenging to make a profit on that particular cocktail and cocktail menus are generally designed with an overall target pour cost percentage in mind, and then the menu sales mix (what percentage of sales each drink represents) must also be taken into account in order to achieve the desired pour cost. As a general rule, nightclubs and taverns will oftentimes run a lower pour cost while upscale restaurants and craft bars tend to run higher pour costs. Ultimately, each manager or operator must decide what target to set to achieve the desired level of profitability and inspect pour cost on a regular basis to keep on track.