At Mister Paradise, the N/A Cosmo — a mix of cranberry and orange juices, simple syrup, and nonalcoholic Seedlip Grove — costs $1.59 to make. (The Seedlip alone costs $1.09 to add to the drink.) He sells it for $12. A full-strength Cosmo costs just 30 cents more: One ounce of Cointreau costs $1; an ounce and a half of Skyy vodka costs just 57 cents. The perceived value of alcohol among the public means Pornel can sell that drink for $17.
Trying to explain all this at the bar is impossible, of course. “It’s a losing battle — condescending. What am I going to do, break out a P&L statement at the table when they complain?” says Nick Padilla, an owner of El Pingüino....
January 24, 2025
"What drinkers often don’t realize is that alcohol contributes almost nothing to the final price of a drink."
I'm reading "Who Can Make a Mocktail That Makes Money? Drinking is down. That’s a problem for bars that depend on high-margin booze to pay the bills" (NY Magazine).
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Yup. In college I helped with the accounting at a high volume bar/restaurant. The wholesale price of alcohol is insane. Food, even at high end foodie chef dining, is mostly a loss leader...
In Boston the other guiding economic problem is the acquisition of the liquor license. The city controls and limits, so in the not so distant past if you wanted one you had to make a reservation for two for lunch at No. 9 Park for you and the city rep, and sometime before coffee you would discreetly hand her a big wad of cash she quickly stuffed into her bra. In return you'd earn the privilege of paying six figures for a license. Hooray capitalism! ...or something...
This is just the beginning. Gen Z is shaping up to be the lowest consuming generation, possibly in American history. Furthermore, recent data suggests that - where legalized - recreational marijuana is taking the place of alcohol for Gen Z, millennials, and even some Gen X.
Long term, I'm short distillers.
I went to the Seedlip link. They distill herbs and manage to make a beverage without alcohol. I don't understand that. What is their base ingredient?
...insanely low, like almost free...
Uber driver app offer: “Deliver alcohol from select merchants
How it works - Make money by delivering beer, wine and other beverages responsibly with Uber Eats.” You don’t have to overpay, if you don’t want to.
As a Latter-day Saint, I've often wondered about the proscription on Coffee. In recording the revelation received, Joseph Smith wrote (or had written):
"A Word of Wisdom, for the benefit ... the saints in Zion—
"To be sent greeting; not by commandment or constraint, but by revelation and the word of wisdom, showing forth the order and will of God in the temporal salvation of all saints in the last days—
....
Behold, verily, thus saith the Lord unto you: In consequence of evils and designs which do and will exist in the hearts of conspiring men in the last days, I have warned you, and forewarn you, by giving unto you this word of wisdom by revelation—" [And it goes on.]
So, why not coffee in "the last days"? (The pioneer saints drank coffee in their trek to the valley of the Salt Lake. Later it was totally proscribed.)
Maybe we'll get up to heaven and ask God, "Why not coffee in the last days? and He'll answer, "Starbucks. I saved you guys millions of dollars."
What I'm hearing is they charge top-shelf prices for drinks made with bottom-shelf liquor.
The cost always follows from the preparation, overhead, and marketing model of the establishment. Sneaky folks and hardcore alcoholics routinely buy an ordinary juice or non-alcoholic drink and pour vodka or gin from a flask into the cup. If you must be cheap, be cheap. If you want to experience fashionable dining or impress a date, pay the bar/restaurant markup.
Seeds?
Lips?
Kimgsley Amis, in his classic book Everyday Drinking, says to use bottom-shelf liquor for mixed drinks, since the mixers are going to overwhelm whatever subtle flavor difference is in the more expensive booze.
Of course this makes postmodern craft cocktail mixologists pull out their hipster beards and hang themselves by their lumberjack suspenders….
JSM
What I’m hearing is that online gambling is consuming an increasing share of Gen-Z and millennials’ disposable income to the exclusion of other forms of entertainment, etc.
The proto-science (i.e., often wrong) of the 19th century routinely warned against spicy foods and more. This may have followed from coffee's foreign/exotic nature and price, that many people experience stomach issues with it, or a strict moral avoidance of caffeine as a drug. Was it a 'revelation' or did it fit the trend of the anti-tobacco, anti-alcohol temperance movement? I vote for temperance movement, as other new 19th religions had similar rules. People were woke in their own way back then.
I've been saying this over and over whenever anybody claims that "farmers" are impacted by changes in food prices. The amount of raw product in most finished goods is a small fraction of the cost of the item to the consumer. The cost of preparation, packaging, transportation, and above all marketing has vastly more to do with the cost than the ingredients.
This is precisely why Johnny Walker Red exists. Cheaper than Black, and strong enough flavor to cut through a mixed cocktail. Fashion spenders don't care about value, particularly if their evening is spent prepping, ogling, and drinking a few elaborate cocktails.
You can't tell that here in Kentucky, though we may be seeing the boom before the bust. I think what will happen is the big volume distillers are going to have to cut back but the smaller craft distillers that can see a 'bourbon experience' or niche products might be ok.
This is a good "price vs cost" lesson for people. Sure fancy ingredients increase the cost, but most of the bar's prices are to cover overhead, especially labor.
"costs $1.59 to make" Plus $4 in labor and another $3 in overhead, leaving about 25% gross margin.
This is 95% spot-on. When it comes to fresh produce, packaging and transportation make up a huge part of the cost, especially compared to the picking and packing, and both are highly dependent on the price of oil. So much of inflation in the Biden Era was driven by that admin's war on fossil fuels.
These articles to me always show illiteracy in the subject matter.
Yes, the variable cost of the drink is miniscule. That's like saying the cost to manufacturer a pill is pennies why are they charging $10.
Reflect the fixed costs / overhead that need to be amortized over a certain amount of drinks. ALL of those costs. And then tell me how assuming XX,XXX number of drinks dispensed what the average cost per drink is.
And the bulk mixers are cheap too. The cost of "shooting" 12 oz of Coke into a serving at a restaurant is like 3% of a retail can.
Of course drinking at home is pretty damn cheap too.
This also why a good manager is quick to comp drinks for an unsatisfied diner and loathe to comp a plate.
That's true, although long-term trends are hard to reliably predict. To echo Chris's point, the same is true of craft beer production vs the behemoths, a trend that had been gaining steam and accelerated after Bud Light face-planted.
When I was much younger some of my friends were bartenders. One of them told me he couldn't put a quarter's worth of booze in a drink if he triedl
Where I grew up in San Bernardino, CA was surrounded by fallow vineyards that the early Mormon pioneers had planted. At some point Young "called them home" to Utah and those that refused to leave became Seventh Day Adventists, according to local legend, mostly living in the Loma Linda area. To this day they also adhere to the no alcohol, no caffeine proscription and added in vegetarianism as well.
NA beers can be quite good -- the European ones, like Kaliber -- but O'Doul's et al. are horse-piss, just like most non-craft American swill. You can make a great beer (or ale) and heat it to 78° C, which boils off the alcohol but really doesn't hurt the flavour at all. Then carbonate it with CO2 under pressure. Easy and good.
As a farmer, NA beer is my go-to in summer. Not only am I running some fairly dangerous equipment, I simply dislike the effect of alcohol when it's hot, and I'm working hard, schlepping 20 kg or 25 kg boxes of cukes, zukes, cabbage and such. Yet the hops are great for calming complaining muscles.
OTOH, I've never had an NA wine that's even remotely decent, because 78° totally messes up the flavour. And the few NA spirits I've tried are just plain dreadful. Yet again, the booze contributes nothing to a Bloody Mary -- throw a lime and some tabasco into low-salt V8® and I'm good.
Maybe it's just that I don't like cocktails. For 12 bucks I can get a "double" upper-midlevel call bourbon or 12 yo single-malt scotch at my local sports bar [I don't have a tv], it lasts me the whole game, and for a big game if the Chiefs win it's a round of Fireball all around, on the house.
They make their money off burgers, nachos [especially], fries, and so on. No "mocktails" but lots of NA beer and lemonade. They're doing very well in a town of 6000 people, and a bunch of us farmers, carpenters, welders, and such in the surrounding areas.
Jaja- Why it's rare to see both Coke and Pepsi at a bar: they are willing give you product and (sometimes) equipment for free if you agree not to use competitor products...
Coca Cola was proscripted until the church bought a major regional bottling plant back in the '60s.
Let's cut to the chase, as it were. What's the difference between a dog and a fox ? ... Three strong drinks.
Liver disease is up. That is why.
I had to stop drinking several years ago because of liver issues....and I wasn't even a heavy drinker. Not even close.
"You can't tell that here in Kentucky, though we may be seeing the boom before the bust. I think what will happen is the big volume distillers are going to have to cut back but the smaller craft distillers that can see a 'bourbon experience' or niche products might be ok.
What I think will also happen and what I would hope happens is the industry focuses on enhancing quality, much as MJB Wolf alluded to. I would love to see more top shelf single-barrel and reserve-malt premium product out of them. High-end bourbon is an art.
Back in the '80s when I worked at a restaurant, you had to back out the 21% alcohol tax at the end of the night. And that was on the retail price of the drink. I wonder if they permit its exclusion if the "drink" is virgin? Never got that impression on anything coming out of the bar besides the normal coffee, tea, soda
Dude, the biggest influence is the bro science podcast anti alcohol hammering. In addition, Trump is the perfect example of how not drinking allows you to keep your marbles. The GenZ kids that I work with are still into going out to clubs and dancing and drinking. They also seem to be fascinated by their grandparents generation, EG the boomers. Lots of tie dye bell bottoms etc. But that just might be more of a center Mass thing.
Yeah we've got that unholy matrimony between Las Vegas and professional sports. The gambling interest or sponsoring all of the high-end popular content providers. They got even Joe Rogan I noticed the other day DraftKings I think
I did the books for a restaurant bar. Revenue for the bar vs. Restaurant was 50-50. But the Bar generated 90 percent of the profits.
Even if a bottle of gin is 18 dollars, that means cost of the alcohol in drink with 1.5 ounces of gin is $1. As others say, the cost of your drink includes all the other costs, salary for the barman and waitress, rent, etc. etc.
Most people don't drink Pepsi hot (although I have a few times). The no coffee writing just says, "hot drinks are not for the body or belly."
I guess at one time caffeinated sodas were considered hot drink adjacent.
Alcohol may not contribute much to the bar's "cost" of a drink, but the "price" is very much tied to consumer demand for it. I think that is the point the article is trying to make - but sloppy use of basic terms doesn't give me much cause to read.
Anyone ordering a mixed drink with top shelf is one of those people '... soon parted from their money'. Includes nearly all the Cool Kids west of the PCH in LaLa Land. Patron Maggies, all 'round!
"Pornel"?
Is that this year's "Only Fans"?
Or has that Lake Cayuga college merged with Sarah Lawrence?
"They also seem to be fascinated by their grandparents generation, EG the boomers."
Odd, and certainly not endearing.
On its own, Johnny Walker Red is undrinkable. Undrinkable!
Hot Dr Pepper (Tasting History) from the 1960s. IIRC the ads make it look like it was an attempt to boost sales during the winter.
Erdinger and Paulaner are nice Euro NAs if you like a hint of fruit. Heineken NA is OK - better, IMO, than regular Heineken. Brooklyn and Athletic are very nice. On the wine side, I find FRE (Sutter Home) at least, inoffensive. The FRE Brut is as decent as just about any under-$20 Bubbly. I can make a pretty authentic Margarita out of this stuff. Just about all NA spirits I've tried are vomit-worthy - and guite expensive.
I have confidence that the Hospitality Industry will adapt.
Howard said...
“The GenZ kids that I work with are still into going out to clubs and dancing and drinking.”
The oldest GenZ just turned 25 this month; I would expect them to still be into the bar/club scene.
The youngest are still toddlers; I worry about them hitting the bars.
... the N/A Cosmo ,,, costs $1.59 to make. (The Seedlip alone costs $1.09 to add to the drink.) He sells it for $12.
Too much? Go home, make your own and spend the evening watching reruns on the cable. You have choices.
Christopher, BF just shut down the cooperage here and some of the craft bourbons are struggling. I think part of the problem is that the bourbon industry was the recipient of lots of people's extra COVID bucks and that source has run dry.
Hopefully the competition buying and flipping will lessen. I think more of the distillers are taking advantage of the Bourbon Trail tourist business and offering tasting rooms in downtown Louisville or relatively close.
Not a distiller, but Watch Hill Proper has a nice tasting that is reasonably priced. Very informative, if you're interested in bourbons.
I am working on an article on the cost of pharmaceutical drugs. It is much the same. Active ingreadient is often less than pennies. There is less than a cent's worth of epinephrine in a $300 (now about $75) injector. That is, if you buy the raw epinephrine powder in bulk. There is 0.6 cents worth of acetameniphen in a Tylonol tablet.
The cost is in getting it from large drums of raw powder to a tablet in your hand.
John Henry
Most mocktails seem to consist of bottled juices, flavored sweet syrups, and "simple syrup" (i.e., sugar water). That's not exactly a healthy alternative to alcohol, especially since many people are trying to reduce their sugar consumption in everyday life. In some ways, mocktail bars are offering the same experience -- a chance to indulge yourself with an expensive beverage that you know isn't exactly good for you.
Someone mentioned strong whiskey's for the taste to come through and made me think of Bacardi. Bacardi is (was?) the top selling distilled spirit in the world. It is positioned as a high end "Puerto Rican" rum. It is distilled in PR but that is all (I was in the barrelling plant last Friday). It is bottled in Florida, molasses comes from all over the world.
It is actually a Cuban recipe. It is fiery, nasty stuff better suited to lighting charcoal than drinking. Every recipe is for heavy flavors like rum punch, daquiri, pina colada, rum and coke and so on. It does have a strong enough flavor to punch through pretty much anything.
Don Q, Ron Llave, Granados and other truly Puerto Rican rums are much more subtle. They are drinkable straight, though I used to prefer a bit of ice, water and lime.
They are also less expensive than Bacardi.
And if a bar wants to serve you some bottom shelf Ron Carioca, take it. It is the same Bacardi, sold cheap as a bar rum. The only difference is the bottle and the label. It comes from the same barrels.
John Henry
In one of the original James Bond books Fleming has Bond explain the economics of booze. X number of pours to the bottle, so much per pour etc.
My standard bourbon is Horse Soldier. Quite nice. 50 bucks. And produced by several of our special forces guys who in October '01 were the first to counterattack Al Qaeda. Probably the final cavalry charge in American history. Story well told in the film 12 Strong.
Wonderful sipping bourbon. They also produce some truly high-octane stuff, but I'm not after ABV.
I have been a farmer for over 50 years, and "certified organic" at that. "Organic" often makes a difference for veggies and fruit if grown **east of the Rockies**. Most west coast and Mexican stuff is a total scam.
Processed "organic" is even worse. Please explain why a 7-dollar bag of organic corn flakes, for which the grower sees maybe 8 cents, is in some way better than a 4-dollar bag of conventional, for which the grower gets 6 cents.
I inspected hundreds of processing plants for organic certification, and I am very familiar with recipes, methods, and ingredient costs.
Then again, people pay 4 bucks for 'Smart Water' ... in which case it's not working.
"Hopefully the competition buying and flipping will lessen. I think more of the distillers are taking advantage of the Bourbon Trail tourist business and offering tasting rooms in downtown Louisville or relatively close."
I used to travel through Kentucky several times a year a couple of decades ago. Picked up a Bourbon Trail Passport at the Welcome Center. There are room for six stamps, all labeled with major distilleries. I went to Kentucky with some friends a couple of years ago to tour Distilleries/Bourbon tasting. They now sell you a Bourbon Trail Passport & Field Guide. It is 160 pages long and includes guides to how to taste bourbon, separate sections for the location of the distilleries (south, easter, west, north, and central Kentucky.) Lots of photos, and I estimate pages for 50+ distilleries. And blank pages so you can get a stamp if you come across a distillery that isn't in the Field Guide.
Barcardi originated in Cuba. It relocated to Puerto Rico because Castro nationalized its assets.
https://www.bacardilimited.com/our-company/our-history/#revolution
"My standard bourbon is Horse Soldier."
I'll have to check that out. My go to is Woodford Reserve Double Oaked or JW blue. I've had Pappy VW twice, and if I could afford that (and find it...) I would.
"I'm not after ABV."
Neither am I. Like many servicemen (especially Army) I developed a drinking problem slightly before and after I got out. Something I'm not proud of and I didn't really begin getting under control until I met my wife. I drink very very occasionally now, and never to excess, and never ever alone.
I'm frankly proud that so many young people - probably because they've seen the damage it can do - are giving alcohol 2nd thoughts or at least are wary of letting it take too much control of their lives. I also hope that they're not just substituting alcohol for something else like kratom or weed...getting addicted to something to avoid alcohol is self-defeating.
They moved the entire bottling plant from Cuba in 56.still had the original machines into the 90s. I made a lot of money keeping them going.
Then they put in all new machinery and I made zilch afterwards.
It was like a Smithsonian exhibit. Some of the machines built in the 30s
John Henry
I was at a high-end scotch tasting not long ago. The drinkers were asked: What's the worst big-name scotch?
The answers were pretty much split 50-50 between Johnny Walker Red and Dewar's White.
I went to Las Vegas at the beginning of January and paid 30$, including tip, for a Long Island lol. Got the same drink down the street for 8 bucks. Both places were divey, although the 30$ drink was sold in front of Caesars.
Or just ask for well liquor. It's usually much cheaper.
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