Reader's Question: Should I Pay Full Price for an NA Version of a Cocktail?
In this post, I answers a reader's question about whether a non-alcoholic drink is worth the same price when the only difference is that the alcohol has been removed.
I am writing to ask if you have any thoughts about restaurants charging full price for an NA version of a cocktail. On a recent visit to a Mexican restaurant, I ordered a virgin jalapeño margarita as I have in prior visits--basically sour mix, a couple of jalapeño slices, ice, salt rim and lime slice garnish. They always charged less. But, on my last visit, the manager insisted I pay full price for an alcoholic beverage. What gives? - Maria D. [Note has been abridged]
I’ve always wanted to have an advice column, so this question piqued my interest for more than one reason. Please feel free to send questions at any time and help me fulfill my dream of spewing wanted advice. However, in the meantime, perhaps the best thing to do here is explain what you’re paying for in the first place. For many people, they assume it’s the ingredients. That’s only partially true.
Ingredients make up between 18-24% of the total price of a cocktail. I usually suggest 20% is a good target. If your cocktail cost $14, you can assume the raw costs are about $2.80. Yes, that’s not a lot. However, if that was all that you wanted, why go out in the first place.
For a breakdown of costing cocktails, check out Jeffrey Morgenthaler’s helpful advice.
There are also the costs of running a bar, which include rent, employees, equipment, maintenance, insurance, administration, marketing, PR, small-wares, decor, and paper goods. That is by no means an exhaustive list but should give anyone a good idea of what I’m talking about. You also have to train your staff to make Margaritas and have someone come in hours early to squeeze the limes. Although I hear you about the sour mix, but even with sour mix someone has to come in early to order it, recieve it, unbox it, set it in the bar, and inventory it when they’re reordering.
Nothing magically gets into place at a bar. Every detail is part of a long checklist that happens everyday often starting early in the morning. By the time you order the drink, it can sometimes take less than a minute to make and serve it. But that’s misleading. It takes the entire day and sometimes week to be ready for that one transaction. Factoring in training, that drink is weeks in the making. That’s why most prices are four to five times the cost. The remainder is used to pay off all of the things I mentioned above and more
Does that give them the excuse to charge more? Absolutely not.
If you remove the most expensive ingredient without adding anything in its place, the drink should reflect that cost. Of course, there’s a big caveat. If they did add a “Tequila” alternative or fancy tea, then you have to pay the price. Just because it’s non-alcoholic doesn’t mean the ingredients are necessarily cheaper for the bar. If they’re not adding anything per se, and just removing the alcohol, they still have to account for the extra volume and some of those ingredients are not cheap. Had they used fresh limes, there is a case for a lesser but still substantial price. Maybe $10 instead of $14?
However, that’s not what you described. You specifically said sour mix and, if it’s a run-of-the-mill sour mix, the drink should probably be $8 or less. That, of course, is a guess. Ideally the restaurant should price it out and offer a fair price for whatever they’re serving based on costs.
There’s one thing I didn’t mention. They have to make money, too. They’re not just doing this to cover costs. Businesses need to do all sorts of things including paying back investors, saving money for renovations, and make money for their owners. I’m sure you know this but, for scale, at one point in my restaurant career I described myself aptly as a reverse millionaire. I owed millions of dollars.
How much do bars and restaurants make on drinks? For those who have never worked in a bar, they might assume the margins are high and owners make a lot of money on liquor. This is only true to the degree the liquor is awful stuff and you hike the prices. Otherwise, you’re lucky to make anywhere between a dime to two dimes on every dollar. In other words, the bar might make $1-2 on your $14 drink, if they’re lucky and good at controlling costs. However, many independent restaurant owners I know are making lower than 10% profit overall. Prices as they are, it’s just a hard time to make a buck (or a dime).
Therefore, I’m going to say something that somewhat contradicts my assertion above. If you’re lowering their prices by 30-40% then you can understand at least why the person is a little perturbed, especially if they’re the ones waiting for the sour mix early in the morning then staying late night to confront customers who are rearranging their menu and reducing their expected price per person. They’re wrong to overcharge you, and it’s no excuse to be rude, but the chips are stacked against independent restaurant owners. Maybe not at you, but they have a right to be upset.
My suggestion is for them to make delicious non-alcoholic drinks that are just as complex and interesting as drinks with alcohol, charging around the same prices as cocktails with alcohol. There are many delicious non-alcoholic “Tequila” alternatives such as Almave, Free Spirits, and Trejo’s. All of these would work wonderfully in a spicy margarita. However, in the meantime, I suggest they lower the price and, perhaps, there’s a case to write the ownership asking for better non-alcoholic options or at least to clarify their policy.
I hope it was helpful; it’s a great question. Keep them coming!
Derek Brown is an author, NASM-certified wellness coach, and founder of Positive Damage, Inc.
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