Few people dining at posh River North or West Randolph Street restaurants would raise an eyebrow at a craft cocktail costing $14 or a $10 bottle of craft beer. Yet when presented with a $17 glass of wine one may wonder, “Why are restaurants marking wine up so much?”The answer may surprise you. Looking at the real cost of a glass of wine, a cocktail or a beer gives the true picture of markups.Wine by the glass is typically marked up 300 percent. “In general, if someone is running an effective by-the-glass wine program, the menu price of one glass is the wholesale price of the bottle,” says Steven Morgan, wine director and manager of new West Randolph Street restaurant Formento's.A bottle of wine holds 25.36 ounces, and a standard pour of a glass of wine is between 4 and 6 ounces. The restaurant breaks even on the first glass sold; the remaining three or four glasses are gross profit. But there are several ways that profit can become a loss.“Loss can happen by over-pouring or pouring tastes," Morgan says.

"Loss can happen because a wine has to be dumped out, if say, a Champagne being poured by the glass goes flat overnight.”Markups on cocktails, however, are typically 500 percent, due mainly to higher labor costs per drink. So while your glass of pinot gris might cost more, the markup actually is as much as 50 percent lower than the markup on a Manhattan. best bottle of wine as a gift“Someone has to squeeze the juice, measure the ingredients and mix the drink,” says Table Donkey & Stick bar manager John Douglass. where to buy wine in seattle waOn the other hand, as opposed to wine, which can have significant product loss, loss on cocktails is far lower. best wine shops city of londonAnd the ingredients cost less. wine in india and price

“In general, when it comes to a $10 cocktail, the actual stuff that goes in your glass costs the restaurant significantly less than a $10 glass of wine,” says Matt Sussman, owner and wine director of Table Donkey & Stick.Take the Logan Square restaurant's house cocktail, "The Cool Kids Party." is wine good to drink during pregnancy“It has 2 ounces of rye whiskey, a half-ounce of house-made falernum, a half-ounce amaro and a couple of dashes of Peychaud's bitters," Douglass says. best italian wine red"I put the ounce costs of each into a spreadsheet and need it to be at 20 percent cost. I see that it costs $1.93 to make. I know it needs to be a $10 cocktail.” DRAFT BEER MARKUPS ARE HIGHEST Draft beer markups take the prize: They can exceed 600 percent. “All across the board, draft beer is a better money-maker for the manufacturer, the distributor and the bar or restaurant,” says Michael Roper, owner of Hopleaf in Andersonville.

Bottled craft beer is typically marked up 350 percent. “When it comes to a good beer, the markup in general is between two to three and a half times for bottled beers," Roper says. In all instances, sources say, in general, as menu prices increase, the markup is lower. “Opening up a $5 bottle of beer or a $50 750ml bottle of something rare doesn't cost me any more money," Roper says. "The labor is exactly the same.” Owners are willing to take a little less markup because they're making so much more money on that more expensive bottle.So where do you get the most bang for your liquor buck? Though that glass of wine might be the most expensive, its markup by the restaurant is the lowest, thus offering you the best value (setting aside the amount of alcohol by volume in different bar orders). Why is wine more expensive even though it's marked up less? Wine is just more expensive to produce. The crops are costly and labor-intensive to grow and harvest. In addition, production and packaging costs can be exorbitant—the cork alone can cost a dollar.

All of this adds up to a more expensive drink for you and a less profitable one for restaurants. Restaurant Pricing and Profits Pricing Your Restaurant's Wine List Best Customers Equal Best Profits Pricing a Cafe Menu Daily Menus Solve Pricing Change Problems Why Should You Have A Drink Menu? Is Employee Turnover Good or Bad for the Bottom Line? Setting Prices at a Family Restaurant Simple Ways to Increase Sales at Your Family Restaurant Increase Your Catering Sales How to Increase Wine Sales How to Increase Sales at Your Cafe Increasing Your French Restaurant's Sales Sports Bar Takeout Menus Maximize profit from a well prices wine list Browse 1000's of gorgeous menu templates. There's no better way to heighten the enjoyment of a great meal than with a well-paired glass of wine. From a restaurant's point of view, not only is the wine list a way to enhance the dining experience, it's a key source of high profits.

Alcoholic beverages, including wine, easily provide more profit than any food items on the menu. Pricing a wine list is a bit of a balancing act; you must get the pricing right to maximize sales and profits while pricing fairly by industry standards. Simultaneously, you need to ensure your establishment offers something for customers all over the wine-appreciation spectrum. Dividing the Wine List Patrons with modest or no wine knowledge take certain cues from the prices on your menu. However, their first cues come from the division of your wine list. So, before pricing, determine how to divide your restaurant's wine menu. The decision is largely a function of the size of the wine list and how centrally it figures into your brand. A small list is typically broken down into categories including reds, whites, blushes, sparkling wines, and dessert wines. Somewhat larger selections can include sub-categories for country of origin and/or grape type. More sophisticated wine lists often break sections down further by region.

The powerful alternative to bar spreadsheets. All-in-one Inventory, Ordering, POS Tracking and Reporting. Drop your pour cost by 7%. Pricing by Industry Standards Restaurants generally mark up a bottle of wine from 200 to 300 percent over its retail sales price. You can therefore reasonably price a bottle that retails around $20 at $60 and $80. For bottles offered by the glass, divide your bottle list price by the number of glasses you get per bottle to determine your price by the glass. The generosity of restaurant pours varies widely, but a 750 milliliter bottle usually provides about 6 glasses. It is standard practice to mark up the most popular wines on a list closer to 300 percent, while marking up less impressive sellers closer to 200 percent. The mark up sometimes exceeds 300 percent over retail value on specialty wines or rare and particularly expensive bottles. Such wines appeal to connoisseurs with considerable disposable income for indulgences. Pricing special bottles at 400 percent over retail value is not uncommon.

However, this isn't necessarily the smartest business practice, particularly if your restaurant faces tough competition for affluent wine lovers. If your wine list is a notable selling point for your establishment, there may be more sales and profit in smaller mark ups on specialty bottles. The people who order these bottles can easily spot a great deal. Making high-value wines available to the customers who love them at uncommonly low prices can be a powerful marketing tactic. If you find certain wines aren't selling, cut their prices before discontinuing them. Lower profits are, of course, still profits, and worth more than no sales and no profits. Moving bottles for 100 percent over retail value is still an excellent profit, even if it's lower than the standard. Just keep an eye on sales to make sure the less profitable bottles don't cut into higher-profit sales. Cheap offerings are also an effective way to encourage sales among patrons who don't know much about wine or who are hesitant to raise their bill with extras.