Pour cost is one of the most important metrics for any bar. It tells you exactly how much it costs you to generate each dollar of beverage revenue. Master this number, and you control your profitability.
Too many bar owners guess at their pour costs or only look at them quarterly. That's leaving money on the table—often thousands of dollars every month.
Theoretical vs Actual Cost
There are two types of pour cost you need to understand:
Theoretical Pour Cost
This is what your pour cost SHOULD be if every drink was made perfectly, with exact measurements, no spillage, no theft, and no free drinks.
Theoretical Pour Cost =
(Cost of ingredients per drink) / (Menu price) x 100
Example: A margarita costs $2.50 in ingredients and sells for $12. Theoretical pour cost = $2.50 / $12 x 100 = 20.8%
Actual Pour Cost
This is what you're actually spending compared to what you're actually selling. It includes everything—overpouring, spillage, theft, comps, waste.
Actual Pour Cost =
(Total beverage cost for period) / (Total beverage sales for period) x 100
Understanding Variance
The difference between theoretical and actual pour cost is your variance. This is where you find money leaks.
- 0-2% variance: Excellent control. Normal operational variance.
- 2-5% variance: Room for improvement. Investigate causes.
- 5%+ variance: Significant problem. Money is walking out the door.
Common causes of variance:
- Overpouring: Bartenders being generous (or not measuring)
- Theft: Free drinks for friends, cash skimming
- Waste: Spillage, breakage, spoilage
- Unrecorded comps: Giving away drinks without logging them
- Recipe inconsistency: Different bartenders making drinks differently
- Inventory errors: Mistakes in counting or receiving
A bar doing $50,000/month in beverage sales with 5% excess variance is losing $2,500/month—$30,000/year. That's often more than the cost of a new POS system or inventory management solution.
Using Your POS to Track
Your POS system should be your primary tool for pour cost management:
- Recipe costing: Enter ingredient costs for each drink to calculate theoretical costs
- Product mix reports: See what's selling and calculate blended pour cost
- Comp tracking: Log every free drink to account for it in variance
- Void reports: Monitor voids and refunds that affect cost calculations
- Time-based analysis: Compare costs across shifts, days, bartenders
The best systems let you track by bartender, by shift, by day of week—so you can pinpoint exactly where problems are occurring.
How to Reduce Pour Cost
Practical steps to improve your pour cost:
1. Measure Everything
Jiggers, pour spouts with measurements, portioned wine pours. Consistency = control.
2. Count Inventory Regularly
Weekly at minimum. Some high-volume bars count daily for high-value items. You can't manage what you don't measure.
3. Log All Comps
Every free drink goes through the POS as a comp. No exceptions. This accounts for it in your variance.
4. Audit High-Variance Periods
When you see variance spike, investigate. Pull camera footage. Check who was working. Find the cause.
5. Train and Retrain
Bartenders need to understand why pour cost matters. Share the numbers. Make it their problem too.
When bartenders know their performance is being tracked by shift, behavior changes. Just measuring and sharing the data often improves pour cost by 2-3 points.
Industry Benchmarks
Target pour costs vary by category:
Liquor
18-24%
Well drinks lower, premium higher
Draft Beer
20-25%
Craft usually higher
Wine
25-35%
By-the-glass vs bottle varies
Blended bar pour cost typically targets 18-24% for profitable operations. Know your numbers, track them weekly, and fix variances fast.
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