Here's Why Expensive Cocktails Cost So Much

Read original story on HuffPost Food & Drink

A signature cocktail at fine dining gem The Grill in New York City will set you back $18 to $25, while an experimental concoction at The Aviary in Chicago (and now NYC), can run you as high as $85 when ordering à la carte, or $65 a head for a three-course cocktail-tasting menu. If these prices are giving you sticker shock, you’re not alone — how in the world does a cocktail end up costing just as much as (or even more than) a full meal?

When it comes to craft cocktails, there are two major factors to consider: the cost of doing business and the overall drinking experience.

The complex cocktails crafted by talented mixologists and the swanky dens they’re served in are enabled by a cocktail culture that has developed rapidly over the past 10 years, with social media further fueling the movement as a way for bartenders to share their creations with a global audience.

Christopher Gerling, extension associate at Cornell AgriTech, described the rise of craft cocktails as “a combination of foodie culture and craft.” Demand has gone up for high-end reserve spirits with interesting production methods and a story to go with them, and added ingredients like simple syrups and garnishes have also been taken to the next level. He told HuffPost, “I think people — millennials especially — are becoming much more interested in quality over quantity, and craft cocktails check all the right boxes.”

Skilled bar managers minimize their cost of goods while delivering delicious drinks.

The most obvious cost that bar managers and restaurant owners consider when pricing out cocktails is the ingredients.

The pour cost (how much it costs to make a drink divided by its sale price) ideally comes to around 18 to 20 percent, according to William Elliott, bar director of Maison Premiere (winner of a James Beard award for Outstanding Bar Program) in Williamsburg, Brooklyn.

For the cocktail menu at Maison Premiere, Elliott makes economical decisions, particularly in his liquor choices (paying no mind to brand marketing and focusing on actual taste) to create a well-rounded cocktail program that can support special offerings like tableside Sazerac service, in which a smartly dressed waiter holds a sterling silver tray with an antique crystal mixing glass as the maître d’ prepares the drink. The top-tier $96 St. Bernard Sazerac service is costly to both the consumer and the bar, as it features two ounces of 1946 Cognac, which roughly comes to about $47 per drink. This pour cost is well above the 18 to 20 percent sweet spot, but the Sazerac service and other tableside drink offerings are signatures that Elliott likes to keep around and are well-received among the clientele that make the splurge.

Fine spirits aside, bar staples like citrus can fluctuate vastly in price depending on the season and are also impacted by environmental issues like drought and fires.

Bryan Dayton, co-owner and beverage director of several Colorado-based concepts including OAK at fourteenth and Corrida, constantly works with liquor distributors on bulk discounts as well as his chef team to get insights on what products are coming into season. “One thing I find ironic is that most people don’t know when citrus season is,” Dayton told HuffPost. “We can get citrus year-round now, which is great, but traditionally [winter]. You think about those classic blood oranges and grapefruits and this is time for it, so you see this price decrease, but in the summertime, everybody wants to drink margaritas and fresh juice cocktails. This slight fluctuation, this seasonality, really plays into your price.”

Handcrafted cocktails require more time and labor, and a skilled hand.

Beyond raw ingredients, the amount of preparation required for a cocktail is often factored into costs.

“I’ve worked at places where every shift was 10 hours and you had to come in 3 hours early to hand-juice everything for the day,” Lisa Selman, beverage director at Hilton Chicago, told HuffPost. For bartenders making their own bitters, shrubs or other mix-ins, “all of those things take time, and most likely your cocktails will go up in price the more time it takes to make all of the ingredients that go into it,” Selman said.

When it comes to actually making the cocktail, complex drinks require a skilled bartender to not only perfect their execution but to do so in a timely manner. A complex cocktail that takes 10 minutes to make may scare off a customer, noted Adam Levy, Alcohol Professor, and cuts into potential profits.

At a recent panel, someone asked Dayton about his favorite drink to make and he surprised attendees by saying a dirty martini. “I own a restaurant, I have really thin margins and a dirty martini where I can give you half a glass of vodka and half a glass of olive brine — I make a lot of money off that cocktail,” Dayton said.

Nicky Beyries, bar manager of San Francisco restaurant Foreign Cinema and its neighboring sister bar Laszlo, has seen a trend toward more fast-casual places that offer pre-made drinks (cocktails on draft, pre-bottled cocktails, pre-batch cocktails), which cut down on labor costs as well as the need for especially skilled bartenders. Working in a competitive market like San Francisco makes it difficult for her to find quality people to hire as new restaurants are constantly opening, and though they offer a living wage and health benefits, many employees cannot afford to live in the city and commute upward of an hour to work. “It’s kind of crazy in the grand scheme of things when you think about it, and it’s just like, at what point does that become unsustainable?” Beyries told HuffPost.

Bringing it all together: the experience.

At the end of the day, we’re dealing with the hospitality industry, and decisions made in regard to the guest experience have costs that factor into a restaurant’s bottom line.

Take PDT, for example. A famous NYC speakeasy accessed through a vintage phone booth, PDT offers an upscale environment with luxe oak tables, hand-carved ice and other fine details that elevate the drinking experience. Eben Freeman, principal consultant at Cocktail Culinaria and an industry vet with 30 years of experience behind the bar, noted that decisions like limiting the number of guests at a small place like PDT (so that people aren’t crowding the bar or other patrons) limits the number of drinks you’re able to sell each night, and cocktails need to be priced accordingly.

In places like New York City, the cost of doing business — particularly for cocktail bars — has become so prohibitive that it’s virtually impossible to have a successful bar without serving food to help offset costs. “People are just trying to survive in this city right now,” Freeman told HuffPost. “Places are closing left and right, so nobody is just throwing numbers out there. Everybody is trying to charge enough so they actually make some profit and not too much as to keep the locals and the regular customers away.”

Bottom line: Cocktail pricing is a calculated decision that takes into account a number of factors, both the ingredients inside the glass and the complex and constantly fluctuating costs of running a business, and after all is said and done there needs to be a profit. “At the end of the day, you are creating an experience,” Selman said. “You want to have your guest be happy and make sure you’re making their drink the way they want it, but you can’t do that if your doors aren’t open.”