The Cost Of A Well Made Drink

About a year ago I was having a conversation with a fellow bartender and he mentioned that the Dallas Observer had run a survey of its readers to find out why they thought that restaurants and bars presented them with a cocktail menu when they sat down at the bar.  The overwhelming response:  Because they want to charge the customer more money for the same amount of booze.  Now seeing as how all I do is make and sell cocktails this is definitely something I think should be addressed.  This post is not here to say that a lot of these places are justified in their cocktail menu pricing.  What I want to do here is give you a quick insight into the financial workings of the bar and restaraunt industry that will help you gauge what your getting for your money a little better. 

Establishments that really care about having a beverage program that is top notch take on a lot of costs that other bars don't have to deal with.  The labor and cost of squeezing fresh juices and making fresh syrups, the liquor that goes down the drain when testing out new recipes, the use of only quality spirits, the additional equipment that is needed to properly execute the drinks on the menu, the extensive amount of training that is necessary to get the bartenders up to speed on how to properly create a drink, etc.  Let's also not forget about the absence of rotgut liquor behind the bar.  Whereas a lot of the bar industry gets to pad their pockets with high margins on well mixed drinks, a really good bar does not have such luck.  It's also important to take into account the time it takes to actually make a cocktail.  At one of my establishments (the one where it's really cheap to drink at and I make more money) the average time it takes to make a drink is 6 seconds.  At The Usual the average time it takes a bartender to produce a drink is 35 seconds, and that's if someone doesn't order 5 Mojitos and a Ramos Gin Fizz in the middle of Friday night service.  The real cost that lies in the opporunity cost that is incurred by not "slinging" drinks over the bar is quite significant, especially when you think of it on the scale of 140,000 cocktails going over the bar in a year.

All that being said, here's a real cost analysis on The Aviation recipe that we use at The Usual.  Some people may hate me for posting this on the internet, but I really think customers would appreciate some transparency on this issue.

The Aviation
2 oz. Beefeater Gin  (Cost: $1.41)
.5 oz. Luxardo Maraschino  (Cost: $.51)
3/8 oz. Creme de Violette  (Cost: $.29)
.5 oz. Lemon Juice (Cost: $.04)
1 Luxardo Maraschino Cherry  (Cost $.04)

All told it costs $2.29 to produce this drink.  We sell it for $9.  That's a difference of $6.71.  At this point that sounds like a very high margin, but wait, there's more.  Let's take into account Taxes, Labor, and Overhead.

Taxes are 14% on every dollar that comes into the bar.  That's before the associated but fairly nominal Sales Tax.  (Cost: $1.26)

Overall labor cost of 12%.  Some of this is associated with things like cleaning crew, door guys, other miscellaneous labor, and employee taxes, but hey, the money's got to come from somewhere.  (Cost: $1.08)

Overhead includes the rent, utilites, cost for computer systems, coolers, regular maintenance, etc.  We enjoy a low level of overhead for our industry at 9.7%.  This cost can be significantly higher in prime locations and with the addition of a kitchen.  (Cost: $.87)

These three things will shave another $3.27 off of the profit made on this one drink.  We had a profit of $6.71.  Now we're down to $3.44.  That means we're retaining 38% of the money paid for this drink as profit at this point.  Most businesses would be really happy to retain that much of their income.  So would we. 

We have to also consider Marketing, Miscellaneous fees such as minor repairs, Accounting, Janitorial and Soft Good expenses, and Credit Card processing fees.

Our marketing budget is 5% of our income.  That a standard number for a small business.  (Cost: $.45)

Miscellaneous expenses usually sits around 2%.  Always expect the unexpected.  (Cost $.18)

Accounting fees will vary month to month depending on things like tax season, quarterly filings, and what not things that you have to pay accountants for, but with the guy we use it works out to be around 2%.  (Cost $.18)

Soft good and Janitorial expenses cover things like the chemicals used to sanitize tables and wash dishes, those fancy paper towels in the bathrooms that are to be expected at places that charge premium prices for drinks, replacing broken glassware, and the like.  We're talking 4% here.  (Cost $.36)

Merchant Service fees are what we pay for being able to run credit cards.  This is always the first bill that I get at the beginning of the month so I get a little irritated with this one.  At around 3%, it's small, but it counts.  (Cost $.27)

These expenses tend to be small, but they add up in the end.  In this case it's another $1.44 out the door from this one drink.  That makes the final profit on this cocktail $2.00 even.  That means we have retained 22% of the income on this drink as profit.  Compared to what I see in other industries that's a sign of a well run business that isn't gouging it's customers.

With that info you should have a better perspective on where your money's going when you purchase a cocktail.  I will say that there are a lot of factors that will cause prices to differ from one place to another.  A lot of times at nice restaurants that have large kitchen staffs high margins on booze is what subsidizes all that additional labor.  Places located in prime locations will have much higher rent to pay which typically ends up as smaller food portions and higher drink prices.  Places that have just opened generally have not found the most efficient way to produce their product and take care of their guests.  There are a lot of behind the scene variables in this business. 

Personally I don't like paying $10 for a Tanqueray and Tonic and a nightclub, but I do like paying $12 for a great drink at The Cedar's Social.  I do like the $6 Full Sail Lager and Jameson's special at Vickery Park, but I don't like the lazily made $12 Manhattan variation I had at Samar.  I really enjoy the food at Samar and the service at the table was spot on (btw).  I really hate places that still serve $12 Appletinis.  When will that ever go away?

A Few of My Favorites

So I was searching the great wide web the other day in an effort to get my creative juices going for another post and it dawned on me that it might be useful to let readers know what sources I usually find to be quality.  It can be a daunting task to wade through the thousands of websites devoted to booze that come up when you query google with searches like "drink recipe" or "cocktail".  So many of the pages that appear first in your face are loaded with false information, incorrect recipes, and shots with stupid names like Fuzzy Gorilla Getting Slowly Screwed By An Irishman Up Against A Wall.  Below is a list of some sources and blogs that I like to follow and I think others might find interesting.

http://cocktailenthusiast.com/
I feel obliged to mention this site because not only do I like the content, but the guy that writes it is both a friend and super cool guy.  He tends to post a variety of astute reviews on spirits, cocktail recipes, and general industry news about new products and the like.  Whereas I go to some sites for the most current research and cutting edge trends, I go to this one because it helps me stay up to date and I like to get a good second opinion on products before they hit my backbar.

http://drinkdogma.com/
This blog is the inner workings of the brain of Bobby Heugel, owner of Anvil down in Houston.  Bobby and the rest of the Anvil staff are doing some of the most creative drinks in the country so it's nice to stay apprised of their latest concoctions.  On this blog you'll also find Bobby's Houston Chronicle columns that have served to not only introduce me to new cocktails, but refresh my memory and remind to dust off some old ones.

http://www.esquire.com/blogs/food-for-men/
Esquire magazine has done a great job with who they staff for food and drink writers.  At the top of the list of people they've got is Dave Wonderich, the world's preeminent cocktail historian.  I know it sounds crazy, but some of the best info on the net about cocktails is on their site.  It can be a little confusing to find Wonderich's blog by just going to esquire.com, so I find myself a lot of the time just googling "Esquire cocktails".  Check it out.

http://rumdood.com/
I like rum and everyone around me knows that.  If you like rum as well then this is a must read.  It's all things rum.  Rum cocktails, Rum history, Rum Reviews, Rum news, and on and on as long as it relates to rum.

http://forums.egullet.org/index.php?/forum/88-spirits-cocktails/
This is the big dork out forum that I lurk around a lot.  It is in no way geared towards the consumer, but rather focuses on detailed discussion between bartenders on research, ingredients, ice, and all things cocktail.  If I ever make you a drink that you find to be really creative, chances are I got the idea here.  I'm not that smart.

I'll leave the internet references at that for now.  The list is long and I'll be sure to link up some more sites in the future, but that is more than enough reading for anyone.  I hope you find as much joy and insight from these links as I have.

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Old Fashioned Class Recap

Last Sunday we held our first cocktail class at The Usual.  Here's a simple recap for those that couldn't attend.

Let's talk Old Fashioned for a minute.  A waitress from a fairly nice restaurant down the street came into the bar about a month ago and told me that some guests came in after drinking at The Usual and asked the bartender for a round of Old Fashioneds.  The bartender politely informed them that they don't do all those fancy drinks and offered them an alternative from the standard bar fare that they normally accommodate their guests with.  The guests obliged and opted for beer, wine, and some simple two part drinks instead.  I chuckled for a second and waved the waitress around to the working side of the bar.  As I guided her through the steps of making a proper Old Fashioned she was increasingly amazed at how simple it really was to make an absolutely stellar cocktail.  That's how the idea for this class was born.

I like the Old Fashioned for three reasons.  Number one is simply that it tastes great!  The second reason being that it is, by nature, a simple cocktail that barely alters the flavor of the spirit you are working with.  The third, and most important reason for me, is that it serves as a unique and versatile template for creating new drinks.

This style of drink has three components to it; a base spirit, a sweetener, and a modifying component.  The base spirit that you choose to employ is simply a matter of preference.  Do you like Bourbon, Scotch Whisky, Rum, Gin, Tequila, Mezcal, Cognac, etc?  The only things you need to make sure of is that you choose a spirit that is around 40% ABV and doesn't have sugar added to it.  Vodka does not count.  Once you have made your decision, get a jigger and measure the spirit into your glass.  I personally give myself a generous 2 oz. pour.

The next choice you have to make is what to use to sweeten the cocktail.  This is where options really start to abound.  Go to a well stocked grocery store and see what's available that's sweet.  You'll find Maple Syrup, Agave Nectar, Honey, a variety of sugars, Marmalade, etc.  You can also choose from any number of sweetened cordials and liqueurs.  The important part of making this decision is simply making a decision that makes sense.  Yes, agave nectar works well with Tequila.  I'll let you guess why.  Maple syrup plays well with Bourbon.  Am I blowing any minds yet?  What about Gin and Green Chartreuse?  Get creative. You can also take the sugars and turn them into syrups.  You can also infuse almost any syrup with any flavor.  The sweetening component of an Old Fashioned style cocktail should be used sparingly so as not to overpower the spirit.  You'll be using anywhere from an eighth of and ounce to a half ounce.  Just add it to the spirit a little at a time until the mixture tastes the way you want it to.

Our last consideration in this creative process is what to use for the modifying component.  The traditional version of this drink calls for Angostura Bitters, a predominately clove and cinnamon flavored tincture.  If you stick with bitters for this then I recommend getting online and seeing what is out there in this rapidly growing world.  Everybody and their dog is creating bitters now and the possibilities are almost endless.  If you don't find something you like, then just create your own tincture by adding a whole lot of whatever to a jar filled with high proof spirit and sticking it in a cool dark place for about four months until it tastes like that particular ingredient.  Be sure to use a spirit that it at least 50% ABV and shake up the jar once a day.  This component will be used in very small amounts.  We're talking dashes here.  Just add and taste until it strikes your fancy.

Old Fashioned style drinks are not only some of the simplest cocktails to make, they are the simplest to riff on and tailor to your whimsy.  Below I've listed a few examples to get the creative juices going.  I'm also interested to see what you come up with.  Throw some recipes in the comment section or swing by the bar and show me what you've com up with.

Old Fashioned (as per The Usual)

2 oz. Buffalo Trace Bourbon
1/4 oz. Simple Syrup
3 dashes Angostura Bitters
3 dashes Regan's Orange Bitters

Add all ingredients to an Old Fashioned Glass.  Add ice.  Stir for about 15 seconds.  Garnish with a Luxardo Cherry and a flamed orange zest.

New Fang (created by Jason Kosmas)
This is our recipe for this one.  Sorry to Jason if it's not his original recipe.

2 oz. Rittenhouse Rye 100 proof
1/4 oz. Simple Syrup
1/2 oz. St. Germain
3 dashes Orange Bitters

Add all ingredients to an Old Fashioned Glass.  Add ice.  Stir for about 15 seconds.  Garnish with a Grapefruit zest.

Corn N' Oil
I've seen a number of different recipes for this, but this is my favorite way.

1 1/2 oz. Brugal Anejo (I like my rum with fishnets on.)
1/2 oz. Flor de Cana 4yr
1/2 oz. John D. Taylor's Velvet Falernum
2 dashes Angostura Bitters

Add all ingredients to an Old Fashioned Glass.  Top with ice.  Stir for about 15 seconds.

Oaxacan Old Fashioned (From the 2011 Food and Wine Cocktail Compendium)

2 oz. Reposado Tequila
1/4 oz. Agave Nectar
1/4 oz. Mezcal
2 dashes Angostura Bitters

Add all ingredients to an Old Fashioned Glass.  Top with ice.  Stir for about 15 seconds.

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