Last updated: 7 April 2026
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Most pub owners I’ve spoken to can tell you their total revenue by the end of a trading day. Almost none of them can tell you which drinks are actually making them money.
You might think a £6 pint of craft beer is more profitable than a £2.50 soft drink. You’re probably wrong. The soft drink might have a 70% margin. The craft beer, after cost of goods, ice wastage, and overpour, might be closer to 35%.
Without knowing your profit per drink, you’re running blind. You’re making pricing decisions based on guesswork, you’re pushing products that drain your margins, and you’re missing thousands of pounds in potential profit every year.
In this guide, I’ll show you exactly how to calculate profit per drink, why it matters more than you think, and how to use this data to take control of your bar finances.
Key Takeaways
- Profit per drink is calculated by subtracting the cost of goods sold (including wastage and spillage) from the selling price, then dividing by the number of units sold to find your per-unit margin.
- Most pub owners underestimate their true cost of goods by 15-25% because they ignore ice, spillage, overpour, and theft.
- Different drink categories have vastly different margins: spirits often return 60-70% gross profit, while draught beer might be 30-40% due to line loss and waste.
- Tracking profit per drink at the point of sale—not once a month in a spreadsheet—is the only way to catch margin problems before they cost you thousands.
What Is Profit Per Drink and Why It Matters
Profit per drink is the actual money left in your till after you’ve paid for the cost of goods, waste, and spillage on every single drink you sell. It’s not about revenue. It’s about what you get to keep.
A £6 pint sounds good until you realise it costs £2.40 to pour, you lose another 8% to overpour and spillage, and your margin is barely £3 per drink. But a £4 gin and tonic costs £0.80, loses 2% to spillage, and leaves you with £3.10—almost the same profit on a lower selling price.
Here’s why this matters: if you’re selling 400 drinks a day across 20 different product lines, you have no idea which 5 are actually generating your profit. You might be promoting the wrong drinks, pricing incorrectly, or wasting time on low-margin products that tie up your labour and inventory.
I learned this the hard way at The Teal Farm. We were pushing premium lagers because they looked good on the till. Turns out, they had the lowest margins in our range. Once I started tracking profit per drink properly, I realised we should’ve been promoting our gin selection and own-brand cola instead. That single insight added £8,000 to our annual profit in the first year.
Most pub owners never do this analysis because they think it’s too complicated. It’s not. It’s just basic maths. And once you’ve done it, you’ll make better decisions about:
- Which drinks to feature on your menu and in your marketing
- How to price new products
- Where to cut costs without killing margins
- How to spot wastage and theft problems
- Whether to stock a new product line at all
The Problem With Guessing Your Margins
Most pub owners work backwards from revenue. They look at weekly takings, subtract what they think they spent on stock, and guess at a margin percentage. This is why most UK pubs report margins between 60-70%. In reality, that number often includes hundreds of pounds in hidden costs.
Here’s what gets missed in a basic “revenue minus COGS” calculation:
- Overpour: Your staff are trained to pour 25ml measures. Real-world pours average 27-30ml. That 2-5ml adds up to 8-12% extra cost on spirits.
- Spillage: Bottles get dropped. Pints spill. Taps leak. The average pub loses 3-5% of stock to spillage alone.
- Ice wastage: Most pubs don’t account for ice at all. A typical pub uses £40-80 worth of ice per week. That’s 100% cost with zero revenue.
- Theft: I don’t like to assume the worst, but the average hospitality venue loses 2-3% of stock to shrinkage. Some of it’s waste. Some of it isn’t.
- Product waste: Flat beer in lines. Spirits that go off. Wine that oxidises. Cordial that expires. Most pubs throw away 1-2% of stock weekly.
- Line loss: Draught systems waste 15-20ml per pint pour on average. That’s real cost that doesn’t appear on a till receipt.
If you’re a typical pub, your real COGS is 15-25% higher than what you’ve calculated on paper. That means your actual margin on profit per drink is significantly lower than you think.
At The Teal Farm, when we finally sat down and tracked every single cost factor for a full month—including wastage, spillage, and line loss—we discovered our actual COGS on draught beer was 42%, not the 28% we’d been using. That changed everything about how we priced and promoted.
How to Calculate Profit Per Drink: The Real Method
Here’s the formula that actually works. It’s not complicated, but it requires real data instead of guesses.
Step 1: Establish Your True Cost Per Unit
You need to know what every drink actually costs you to pour—not just the wholesale price of the bottle.
For spirits: Take your bottle cost, divide by the number of measures (usually 25 × 35ml measures per 70cl bottle = roughly 28 measures). That’s your base cost. Add 10% for overpour. Add another 2% for spillage. That’s your true cost per measure.
Example: A £12 bottle of own-brand vodka, 28 measures per bottle = 42p per measure. Add 10% overpour = 46p. Add 2% spillage = 47p true cost per pour.
For draught beer: Your supplier tells you the cost per pint (or you calculate it from the keg price). Add 12% for line loss and wastage. That’s your true cost.
Example: A pint costs £1.20 at cost. Add 12% line loss = £1.34 true cost per pint poured.
For packaged beer, cider, soft drinks: Cost per unit is straightforward. Divide total case cost by number of units. Add 3% for spillage and breakage.
For cocktails: Add up every ingredient cost (spirit, mixer, fruit, ice). Your ice cost is real—it’s not free. Account for it. A typical cocktail uses 150-200g of ice. Ice costs roughly £0.08-0.15 per kg.
Step 2: Calculate Your Selling Price Minus True Cost
This is your gross profit per drink.
Gross Profit = Selling Price − True Cost Per Unit
Example 1: Vodka and lime, sold for £5.50. True cost £0.47. Gross profit = £5.03 per drink.
Example 2: Draught lager, sold for £5.20. True cost £1.34. Gross profit = £3.86 per drink.
Step 3: Calculate Your Margin Percentage
This tells you what percentage of the selling price is actual profit before labour, overheads, and tax.
Margin % = (Gross Profit ÷ Selling Price) × 100
Example 1: (£5.03 ÷ £5.50) × 100 = 91% margin on that vodka drink.
Example 2: (£3.86 ÷ £5.20) × 100 = 74% margin on that lager.
That’s your profit per drink. Now you know which products are actually making you money and which ones are barely pulling their weight.
Tracking Profit Per Drink Across Categories
Different drink categories have wildly different margins. You need to know your numbers by category, not just your total bar profit.
Typical Margin Ranges (UK Pubs, 2026)
These are real numbers based on pub data, including wastage and line loss:
- Spirits: 60-72% margin (high margin, easy to upsell, vulnerable to overpour)
- Gin: 65-75% margin (premium pricing power, consistent pours, excellent ROI)
- Wine (glass): 68-78% margin (high margin, but requires proper preservation)
- Draught Beer: 30-45% margin (bulk of volume, low margin, vulnerable to line loss)
- Bottled Beer: 48-58% margin (higher margin than draught, consistent measures)
- Soft Drinks: 68-82% margin (excellent margins, underpriced by most pubs)
- Coffee: 55-75% margin (good margins, labour-intensive)
- Cocktails: 75-85% margin (premium pricing, but requires skilled staff)
The most important insight: the products you think are most profitable often aren’t. Draught beer generates volume and revenue but returns the lowest margin. Soft drinks return higher margins than beer but are often priced too low. Spirits and gin are your highest-margin products.
This is why having real data matters. At The Teal Farm, we discovered that our soft drinks were actually our second-highest-margin category after gin, but we were pushing beer because it felt like that’s what pubs should sell. Once we rebalanced our menu and promotions around actual profit per drink, our overall bar margin improved by 3.2 percentage points—worth £4,200 a year on our turnover.
Common Mistakes Pub Owners Make
When I speak to other landlords about tracking profit per drink, I hear the same mistakes repeatedly.
Mistake 1: Ignoring Wastage and Spillage
Most pub owners only account for the cost of goods sold according to their invoices. They don’t add the 15-25% in real-world wastage, overpour, and spillage. This inflates their perceived margins by 5-8 percentage points and leads to incorrect pricing decisions.
Mistake 2: Using Average Margins Instead of Per-Product Data
If your overall bar margin is 65%, that tells you almost nothing about which individual drinks are making money. One category might be 45%, another 80%. Using the average means you’re pricing and promoting based on incomplete information.
Mistake 3: Not Accounting for Labour in the Calculation
Profit per drink is about gross margin, not net profit. Don’t confuse the two. A cocktail might have 80% gross margin, but it takes 90 seconds to make. A pint takes 5 seconds. When you factor in labour cost, that pint might be more profitable per unit of staff time. Both numbers matter.
Mistake 4: Calculating Once and Forgetting About It
Your true cost per drink changes when supplier prices change, when waste patterns change, when stock turnover changes. You need to recalculate every quarter at minimum, and track it monthly if you’re serious about margins.
Mistake 5: Not Using the Data to Make Actual Changes
Calculating profit per drink is useless if you don’t act on it. The whole point is to use this data to make better decisions about pricing, menu layout, staff incentives, and promotions. If you calculate your margins and then do nothing differently, you’ve wasted your time.
Using Profit Per Drink Data to Make Smarter Decisions
Once you have real profit per drink data, you can start making decisions that actually move the needle.
Decision 1: Repricing Your Menu
If gin has a 72% margin and you’re selling it for £6, but draught beer has a 35% margin and you’re selling it for £5.20, you should be promoting gin more aggressively and potentially raising the price on gin (within market limits). The data tells you where your pricing power is.
Decision 2: Menu Engineering
Where you place items on your menu matters. High-margin products deserve prominent placement. If soft drinks have margins of 75%, they deserve better positioning than draught beer at 35%. Most pubs do the opposite.
Decision 3: Staff Incentives
If you pay your staff commission or bonuses based on total revenue, you’re incentivising them to sell low-margin products. If you tie bonuses to profit contribution, they’ll naturally upsell higher-margin items. The data shows you which products to incentivise.
At The Teal Farm, we used to pay staff 1% commission on total bar sales. We switched to tiered commission: 0.5% on draught beer, 1% on bottled drinks, 1.5% on spirits, 2% on gin. Sales of gin increased 34% within 6 weeks. Our overall bar margin improved by 1.8 percentage points as a result.
Decision 4: Spotting Waste and Theft
If your calculated profit per drink assumes 5% wastage but actual performance drops below that, you have a problem. It might be overpour, it might be spillage, or it might be theft. The data alerts you to investigate. Without it, you’d never know.
Decision 5: Negotiating With Suppliers
When you know your true margins by product, you can have better conversations with suppliers. You can identify which items you’re willing to cut costs on (low-margin volume products), and which items you’re willing to pay premium prices for (high-margin products where quality matters).
Decision 6: New Product Decisions
Before you stock a new product, you should model its profit per drink. If a new craft beer is being offered at a lower margin than your existing portfolio, you need strong reasons to stock it (customer demand, market positioning, volume potential). The data removes guesswork from product decisions.
Tracking profit per drink properly requires accurate data at the point of sale. Spreadsheets work, but they’re slow and error-prone. Pub Command Centre tracks sales, costs, and margins automatically so you can see profit per drink without manual calculation. It updates in real-time, flags margin problems immediately, and gives you the data to make smarter decisions faster.
Frequently Asked Questions
How do I calculate profit per drink if I buy from multiple suppliers?
Track the cost of each product by supplier, not by supplier as a whole. If you buy vodka from Supplier A at £12 and Supplier B at £11, use the actual cost for each bottle in your pub. Many pubs source from 3-5 suppliers, so product-level cost tracking is essential for accuracy.
Should I include labour costs in my profit per drink calculation?
No. Profit per drink is about gross margin—selling price minus product cost. Labour is an overhead that applies across all drinks. Calculate gross margin first, then factor labour into decisions about whether a drink is worth your staff’s time. A 30-second cocktail might be less profitable per unit of labour time than a 5-second pint, even if gross margin is higher.
How often should I recalculate profit per drink?
Minimum quarterly, ideally monthly. Supplier prices change, waste patterns vary seasonally, stock turnover affects costs. If you notice supplier price increases or margin pressure, recalculate immediately. Marketing tools can help you track long-term data, but your cost data should be reviewed every month.
What wastage percentage should I assume if I don’t know my real figures?
Start conservative: 5% for spirits, 12% for draught beer (includes line loss), 3% for packaged drinks. These are typical ranges. But you should measure your own pub’s actual wastage over a month by tracking spillage, overpour, and line loss. Real data beats assumptions every time.
Can I use average selling prices for profit per drink calculations?
No. Calculate per product or per variant. A pint of lager at £5 and a pint of premium ale at £5.80 have different margins because the cost is different. If you use averages, you’ll miss margin opportunities on premium products and misprice your standard range. SmartPubTools tracks individual product margins automatically, removing the need for manual averaging.
Managing margins across 20+ drink categories gets complicated quickly—especially when you’re tracking wastage, spillage, and real-world costs.
Stop managing scattered spreadsheets and guessing at margins. One system for sales, labour, costs, cash flow, and inventory. See every drink’s true margin. Control everything from one place.
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