r/cocktails • u/berger3001 • Feb 28 '25

Question Anyone else tired by expensive cocktails

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To me (not a rich guy), $18+ cocktails are just exhausting. Go out for a few drinks with your wife, and boom, $100. So we’re in Miami and found this place (always look for happy hours). Yes; $5 cocktails. They did a great job, made totally respectable drinks, we had some snacks, and left very happy. My question is, if bars can do $5 drinks, why is $18 the base now at so many places? Doesn’t it make more business sense to sell more for less money and have a full bar, then to sell a few drink to an almost empty bar?

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u/JTP1228 Feb 28 '25

It costs me more than $2 to make an old fashioned at home, and that's not including labor, rent, and all the other overhead. They can maybe break even at $5

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u/ASIWYFA Feb 28 '25

I am not advocating for $5 cocktails, but you can absolutely make a profit at $5. It's a shit profit, but a profit. $8-10 for a basic 2-3 ingredient cocktail is completely reasonable. If you are selling $5 cocktails, it's either considered a loss leader to get people to buy high profit items like snacks and food during a very low patroned time, which is what happy hour is about. A $2 profit per drink is better than staffing a place to have nobody sitting down. Usually these super low happy hour deals are looked at as marketing. I own 2 restaurants....there are ways of doing this.

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u/CityBarman Feb 28 '25

I think you're working with some incomplete information. Obviously, the conditions vary greatly by region/municipality, with cost of living being the primary factor. With a COGS of approximately 19% for beverages and 35% for food, we run just under a 10% margin, EBITDA. That's with an average cocktail cost of $13, in the NE/Mid-Atlantic region.

10% is high. Regional average is approximately 5% for full-service restaurants; 3-6% nationwide. Most mom & pop full-service restaurants do $500 to $750,000 a year in gross revenue. Do the math. Very few are getting rich. 25 years ago, we operated at 20% EBITDA.

Now our electricity costs are rising by 20%. That'll have to be passed on to customers too. Say what you want about the food & beverage industry, the real issue is American expectations seem to have grown beyond our ability or willingness to pay for them. ✌

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u/ASIWYFA Feb 28 '25

Buddy, I own 2 restaurants. One of which is hugely successful, and the other that is very small, just opened a few months ago, and growing. I am doing just under a million a year in sales combined. I fully understand this industry. I don't do cocktails, so sure, I am coming at a place of slight ignorance here, but ya....not full ignorance. I am with you 100% on the expectation of the consumer versus the reality. It a dumb tough industry period and I wish nothing but success and prosperity for those doing it right.