The Essentials: Price — Bar, Brewery & Taproom

Setting Pour Cost by Category

Target roughly 18-24% pour cost on wholesale beer and wine, 12-20% on well spirits, and, for a self-distributing brewery, 12-18% on your own house beer since you're capturing the margin a distributor would otherwise take. Calculate this per product, not as a house average, a $9 IPA that costs you $1.20 a pour (13% pour cost) can subsidize a loss-leader special elsewhere in your menu, but only if you know the real number rather than guessing.

Pricing Happy Hour Without Losing Money

A common mistake is discounting 30-40% off full price during happy hour without checking whether that discount pushes pour cost above 30-35%, which erases the margin on your highest-traffic hours. Structure happy hour around specific, cost-controlled items (a rotating $2-off house tap, a fixed-price well drink) rather than a blanket percentage off the entire menu, so you know exactly which margin you're sacrificing for the traffic.

House Beer vs. Guest Taps

Price your own house beer at a genuine value relative to guest taps from other breweries, since you have real cost-structure room to do so, pricing house beer the same as a guest IPA you're paying wholesale for wastes your biggest structural advantage. Many successful taprooms price house beer $1-2 below comparable guest taps specifically to drive volume toward the product with the best margin.

Food Pricing If You Serve It

Bar food typically targets a higher food cost percentage (30-35%) than a full restaurant (28-32%) because the food's real job is extending visit length and drink sales, not generating standalone profit, price it to be genuinely appealing rather than maximizing margin on each item, and track whether food-ordering guests actually stay longer and order more drinks, which is the real return on the food program.

Adjusting for Local Market Reality

Visit 5-8 comparable venues and note their pricing on a standard pint, a well drink, and a flagship cocktail, then position yourself deliberately, pricing above market only works if your specific value proposition (better beer, better space, better service) is obvious and communicated, not assumed. Pricing meaningfully below market without a cost advantage to support it usually signals desperation rather than value to your target customer.

A Worked Example: The Happy Hour Trap

A new taproom prices its flagship IPA at $7 full price (a 15% pour cost) and runs a happy hour offering 50% off all draft beer, dropping the IPA to $3.50. At that price, pour cost jumps to roughly 30%, which is survivable alone, but the happy hour crowd also orders the guest cider at 50% off, which was already priced at a thinner 22% margin before the discount and now runs a genuine loss per pour. After a month of reviewing actual sales mix during happy hour, the owner switches to a fixed happy-hour menu of three specific, cost-controlled items instead of a blanket discount, and the promotional hours go from a quiet net loss to a real contributor to weekly revenue, without changing the traffic-driving appeal of the promotion itself.

The Mistake That Costs the Most

Pricing every item on the menu to the same target margin, rather than by category, is the most common and costly pricing mistake in this business. A well drink and a barrel-aged cocktail don't carry the same real cost structure, and forcing them into one blanket margin either overprices your simplest items (driving guests to skip them) or underprices your most labor- and ingredient-intensive ones (quietly eating your overall margin every single pour). Review your menu by category at least twice a year, checking actual cost against actual price rather than assuming your original pricing logic still holds as ingredient costs and pour sizes drift over time, wholesale beer, spirits, and produce pricing all move independently, and a menu priced correctly a year ago can be several points off today without anyone noticing until a full cost review catches it. Put the review on a recurring calendar reminder rather than hoping you remember to do it. A quarterly check is usually enough to catch drift before it meaningfully erodes your margin. If you don't already track pour costs in a spreadsheet by category, that's the first thing to build before your next review, since it turns a vague sense of "margins feel okay" into an actual number you can act on with confidence.

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