Last updated: 10 April 2026
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Most pub owners know their total takings and their staff costs, but they have almost no visibility into which mixed drinks are actually profitable—and which ones are costing them money. You could be making 65% margin on a Negroni while your house mojito sits at 35%, and you’d have no way of knowing. That’s a profitability leak most pubs never catch. I’ve watched bar managers pour expensive spirits into drinks priced to match supermarket bottles, watched house pour be used in premium cocktails, and watched free garnishes and extras quietly erode margin on the most popular serves. None of it was intentional—it was just invisible. In this guide, I’ll show you exactly how to calculate mixed drink profitability, identify which drinks are making you money, and where you’re losing it.
Key Takeaways
- Mixed drink profitability is calculated by taking the cost of every ingredient, including spirit, mixer, garnish, ice and glassware, then comparing it to the menu price.
- Most pubs operate between 65–75% margin on cocktails, but individual drinks can vary from 35% to 85% depending on spirit cost and portion control.
- Free extras—extra lime wedges, premium ice, overpouring—reduce margin by 3–8% per drink without changing the selling price.
- Tracking margin by individual mixed drink, not just by category, reveals which serves are profit leaders and which are disguised losses.
What Mixed Drink Profitability Actually Means
Mixed drink profitability is the percentage of revenue you keep after paying for every ingredient that goes into that drink. It’s not guesswork or category averages—it’s the real number based on your actual costs, portion sizes, and menu price.
When you sell a cocktail for £8, you don’t keep £8. You pay for the spirit (the most expensive part), the mixer, the ice, the garnish, the glassware, and sometimes the labour involved in making it. What’s left is your margin. If your total ingredient cost is £2.40, your margin is 70%. If it’s £4, your margin drops to 50%.
Most UK pubs don’t track this at all. They have a vague sense that “cocktails are profitable,” but they don’t know which ones. They might be subsidising slow-moving premium cocktails while underpricing their bestsellers. I found exactly this at The Teal Farm when I started paying attention to drink-level profitability. Some of our highest-volume drinks had the lowest margins.
The math is simple. The execution is where most owners stumble—because it requires you to know what actually goes into each drink, and most bars don’t measure that precisely.
Why Most Pubs Get It Wrong
Three reasons UK pub owners fail to track mixed drink profitability:
1. They assume all drinks in a category have the same margin. “All our vodka cocktails are 70% margin” is the kind of thinking that kills profit. A vodka tonic with a single mixer costs completely different from a vodka-based cocktail with four ingredients. But most pubs never work it out per drink—they just assume.
2. They don’t cost their ingredients accurately. The bottle cost of a spirit is not the per-serve cost. A £30 bottle of rum that makes 25 serves costs £1.20 per drink. But labour to make it, the garnish, ice, glassware, mixer—all of these add up. Most owners know the spirit cost but blank on everything else, which means their margin calculation is wildly optimistic.
3. They have no way to track what actually went into the drink. If your bar staff freestyle the portions, add free extras, or use premium spirit by accident (grabbing the wrong bottle), you’ll never know. Your theoretical margin on paper looks great. Your actual margin—the one that hits your bank account—is lower.
Drink cost analysis is one of the fastest ways to identify hidden profit leaks, but most pubs do it once a year during stock take and forget about it. By then, the damage is done.
How to Calculate Margin on Every Mixed Drink
Here’s the exact method I use at The Teal Farm. It takes 15 minutes per drink to get right the first time, then it’s locked in.
Step 1: List Every Ingredient
Take one mixed drink—let’s use a Margarita as the example. Write down everything that goes into it:
- 50ml tequila (premium)
- 25ml Cointreau
- 25ml fresh lime juice
- Dash of agave nectar
- Salt for rim
- One lime wedge (garnish)
- Ice (approximately 150ml)
- Glassware (cocktail glass)
Most pub owners measure the spirit. Almost none of them cost the lime juice, the ice displacement, or the salt. Those extras add up.
Step 2: Cost Every Component
Now cost each item. Use your actual supplier invoices—not estimated prices.
- Premium tequila: £35/bottle, 25 serves = £1.40 per 50ml pour
- Cointreau: £24/bottle, 30 serves = £0.80 per 25ml pour
- Fresh lime juice: £2.50 per litre, assume 30ml per drink = £0.08
- Agave nectar: negligible, £0.02
- Salt: negligible, £0.01
- Lime wedge: £0.18 per wedge (cost of whole lime divided by average wedges per fruit)
- Ice: approximately 150ml, cost per litre is £0.40, so £0.06
- Cocktail glass: amortised cost per use (assuming 500 uses before replacement) = £0.08
Total ingredient cost: £2.63
Step 3: Add Labour (Optional but Recommended)
A cocktail takes 90 seconds to make. If your bar staff earns £11.44/hour, that’s approximately £0.27 in labour cost. If you include this, your total cost is £2.90.
Step 4: Calculate Margin
If you sell that Margarita for £10:
Margin = (Selling price – Total cost) ÷ Selling price × 100
Margin = (£10 – £2.63) ÷ £10 × 100 = 73.7%
If you include labour:
Margin = (£10 – £2.90) ÷ £10 × 100 = 71%
That’s healthy. But now do this for every mixed drink on your menu. You’ll often find wild variation. Some drinks might be 85% margin. Others might be 45%.
Where Profitability Actually Leaks
In my 15 years running The Teal Farm, I’ve found these margin killers appear in nearly every pub:
Free Extras and Overpouring
The single biggest leak. A bar manager decides a customer gets “a generous lime wedge” or “a bit extra spirit because they’re a regular.” That’s kind. It’s also eating margin. An extra 10ml of spirit is 10% of the drink cost. A generous lime wedge instead of a measured one can add another £0.05–£0.10 per serve. If you sell 40 mixed drinks a day and lose £0.07 per drink to this, that’s £10 per day. £300 per month. £3,600 per year. Gone.
Premium ice or premium glassware being used on standard-price drinks. You stock crushed ice and cubed ice. Crushed ice costs 40% more and takes time to make. But it looks better. If your bar staff automatically use crushed ice on every drink instead of just the premium cocktails, your margin on 30 drinks a day just dropped by 2%.
Wrong Spirit Choice
You have a house vodka at £18 per bottle and a premium vodka at £35 per bottle. If the recipe doesn’t specify which one, some bar staff will grab the premium. Or they’ll use premium on busy nights when they’re not thinking about it. If 20% of your vodka cocktails accidentally get premium spirit, your blended margin on that category just fell by 4–5 points.
Mixer Waste
Tonic water, cola, lemonade, bitter lemon—they come in bottles that don’t pour consistently. One person might use 100ml of tonic in a gin and tonic. Another uses 150ml. That’s a 50% variance in cost. If tonic costs £0.15 per 100ml, the difference is £0.23 per drink. Over 50 gin and tonics a week, that’s £12 lost to inconsistency.
Garnish Waste
Limes, lemons, and oranges are perishable. A lime wedge that sat in the fridge for 10 days cost you the full price but should cost you nothing (it’s waste). Most pubs don’t separate garnish that’s still sellable from garnish that’s past its best. You’re costing waste at full price, which inflates your theoretical margin above your actual one.
Cash flow forecasting becomes much more accurate when you’ve locked down these leaks—because your forecast is based on real margin, not inflated theoretical margin.
How to Lock Down Your Margins
Knowing your margin is one thing. Maintaining it is another. Here’s what actually works:
1. Standardise Every Serve
Write down exact portions for every mixed drink. Not “a generous pour” but “50ml measured.” Use jiggers, not freehand. Jiggers cost £3. They save thousands in margin.
At The Teal Farm, I introduced measured pours and exact garnish specs. The first week, bar staff pushed back hard. “People won’t notice.” “We’ll lose business.” We didn’t. What we did lose was £150 in waste per week.
2. Designate Spirit Quality by Drink
Your menu should specify which spirit goes in which drink. House vodka. Premium rum. Specific brands for signature cocktails. Train staff that this isn’t optional—it’s the recipe. No exceptions.
3. Measure Mixers
Decant mixers into bottles with pourers, or use a jigger. “Enough tonic to top the glass” is a margin killer. “150ml tonic” is controllable.
4. Lock Down Garnish
Pre-cut garnishes in the morning. Limes into wedges. Lemons into wheels. Count them. Track waste separately. You’ll see immediately if waste is creeping up.
5. Price Based on Real Cost, Not Guesses
Once you know your actual margin, price accordingly. If a drink costs £3 to make and you’re selling it for £8, you’ve got 62.5% margin. That’s fine. But if you’re selling it for £7, you’ve got 57%—and that might not be healthy depending on your rent, rates, and labour. Price to your target margin, not to “what seems right.”
Practical Steps to Track and Improve
Week 1: Audit Your Top 10 Drinks
Don’t analyse your entire menu at once. Pick the 10 most-sold mixed drinks. Cost each one using the method above. You’ll usually find 3–4 that are significantly more profitable than the others.
Week 2: Identify the Profit Leaders
Which drinks have margin above 75%? Which ones are below 60%? Your high-margin drinks deserve premium placement on the menu, better lighting in the bar, and staff recommendations. Your low-margin drinks either need a price increase or should be reconsidered.
Week 3: Implement Portion Control
Introduce jiggers and measuring bottles. Train staff. Make it non-negotiable. This is where the money actually gets saved. Measurement kills waste.
Week 4: Track and Review
Once a week, compare theoretical margin (what you calculated on paper) to actual margin (based on what was actually sold and the cost of stock used). The gap tells you how much waste, overpouring, and free extras are happening. If the gap is more than 3–5%, you have a control problem.
Pub Command Centre includes a drink cost tracking system that pulls your sales data and your stock usage, then calculates actual margin per drink automatically. You don’t have to manually calculate anything after the initial setup. It compares theoretical to actual margin and flags drinks where the margin gap is widening. Most pub owners find 4–6% in hidden waste in the first month.
Ongoing: Adjust and Reprice
Every quarter, review margin on your top 20 mixed drinks. If costs have changed (a supplier price increase, for example), recalculate and adjust menu prices. If a drink’s margin is consistently low, either improve the recipe (cheaper mixer, smaller pour, reduce extras) or increase the price.
Frequently Asked Questions
What is a healthy margin for mixed drinks?
Most pubs aim for 65–75% margin on cocktails and mixed drinks. Anything below 60% is worth investigating—you might be underpriced, over-portioning, or losing to waste. Anything above 80% usually means either a very efficient operation or a premium-priced drink. The healthy range depends on your venue, location, and target customer, but 70% is the standard benchmark.
How do I measure the cost of mixed drinks with free ingredients like ice?
Ice isn’t free. Buy ice by the kilogram or litre from your supplier and divide the cost by the approximate weight or volume per drink. Most ice costs £0.05–£0.10 per drink. Glassware is amortised over its lifespan—if a £2 glass lasts 500 uses, that’s £0.004 per drink. These tiny costs add up across hundreds of serves per week.
Why do my bar staff resist measured pours?
Most bar staff learned to pour by eye and feel it’s a skill. In reality, measured pours are faster once they’re habitual, more consistent for customers, and more profitable for the business. Frame it as “we’re ensuring every customer gets the exact same perfect drink”—not “we’re controlling you.” Training takes two weeks. The margin improvement lasts forever.
Should I include labour cost in drink profitability?
It depends. If you’re tracking margin for menu pricing and product decisions, include labour—because it’s a real cost. If you’re comparing to other pubs or industry benchmarks, check what they’re including. Most UK pubs exclude labour from drink cost because it’s fixed (you pay staff whether they make 20 or 40 cocktails per shift), but including it gives you a clearer picture of true profitability per serve.
How often should I recalculate mixed drink profitability?
Recalculate quarterly or whenever a supplier price changes significantly. If your tequila supplier raises prices by 15%, your margin on every tequila cocktail just dropped by 1–2 points. Staying on top of this means you can adjust menu prices before margin damage becomes real. Most successful pubs review drink cost monthly and reprice quarterly.
Most pubs have no idea which mixed drinks actually make money—and margin leaks compound silently for months.
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