How Much is too Much? Gauging Drink Prices
So you're getting into the nightlife business. Well, as you probably already know, outside of table service and the door, the bar is where a majority of the revenue will come from. Whether it's signature cocktails served up as smoky concoctions in fancy glasses, a cold glass of champagne, or a domestic beer, they all bring in money, but you'll have to price things appropriately.
While there isn't a formula that everyone should abide by, one thing's for sure, what happens and is featured around the bar has an impact on the price tag of every drink that comes out of it.
If your space looks like a dive bar and you're thinking of charging $8 for a Bud Light...think again. If you're upscale venue is serving up Grey Goose martinis at $7 a pop, that sure as hell won't work. There has to be cohesiveness between what your space offers and what you can provide at the bar.
"If you walk into any great bar in the world, one of the key things you will notice is that everything fits," says Shaun Rose, owner of Manhattan's GoldBar and Sweetwater Social. "Everything from the optics, textures and quality of materials used, down to the glassware, straws and napkins have been well thought out."
Each one of Rose's bars has a different feel, with totally different aesthetics. Naturally, the prices at each don't coincide.
"At Sweetwater Social, it's a laid back environment, with shuffleboards and foosball tables, video games and a photo booth. Asking guests to pay $18 for a cocktail wouldn't fit what we are about," he says. "At GoldBar, everything about the room is opulent and sophisticated. An $8 cocktail at GoldBar would fit no better than an $18 cocktail would at a dive."
But there are also other characteristics of a venue that come into play and should have an impact on how you gauge your pricing at the bar.
"Certainly, any live entertainment will have an impact on pricing," says Frank Caiafa, beverage manager at Peacock Alley at The Waldorf Astoria in New York City. "So whether the house pays or the guest does with a 'minimum' or an up-charge, someone has to pay the fiddler."
Like Rose, Caiafa advises bar managers to ensure whatever amenities are provided at the bar match the quality of the drinks. "You can charge a lot less for cocktails if you offer a bowl of pretzels as opposed to Mediterranean olives and artisinal cheese."
There do come times when owners flirt with the idea of a happy hour. While this does fit the bill for some laidback establishments, such as Sweetwater Social, Rose doesn't budge when it comes to GoldBar.
"I am a big believer that you don't discount luxury," he says. "We never do any kind of special or happy hours at GoldBar unless there is a charity component."
While Caiafa feels that new venues could leverage a happy hour to "put themselves on the map," he doesn't feel that upscale venues really need to leverage such tactics.
"In an upscale operation, a seasonal 'special' with an item that is only available for a short time might be something to single out on the menu but focusing on pricing or reductions will seem out of place."
Devising a pricing structure for your bar is a lot more than labels and pour counts. It's about the little thinks that surround the bar, the service, and most importantly, the vibe and ambiance the patron experiences once they walk through the door.