How much margin can you make on spirits in catering?

Spirits are one of the most profitable parts of a catering offering. With food, margin is often squeezed by purchasing, waste and prep time. With spirits it's different: your buying costs are low, shelf life is long, and clients happily pay for convenience and atmosphere. Get your drinks purchasing right, and you can charge a markup of 200 to 400% on spirits. This post covers how to make that margin work, from buying strategy to selling price and the pitfalls worth avoiding.

Why margin on spirits matters

A catering event is made up of several parts: food, service, logistics, drinks. Of all those parts, drinks usually carry the best margin. Food costs for a dinner per person easily sit at 30 to 40% of the selling price. For a bottle of gin or whisky you buy for €12 and sell for €35 a bottle, you're under 35% buying cost. That difference makes drinks an engine for your overall profitability.

At the same time, drinks are something clients don't easily compare. They're paying for the atmosphere, the convenience and the presentation, not just for the drink itself. That gives you as a caterer room for a healthy markup, without clients feeling short-changed.

How much margin can you realistically expect

Margins on spirits vary a lot by event type and positioning:

• Business events: a buying price × 3 to 3.5 is standard. Clients expect quality drinks but rarely compare actively.
• Weddings and private dinners: a buying price × 4 to 5 is realistic if you offer a curated cocktail menu or premium spirits.
• Festivals and large outdoor events: willingness to spend is high, but you're working with bigger volumes and more risk of waste from weather. Stick to × 3 to 4 and aim for volume.

In hospitality practice, a markup of 200 to 400% on spirits is normal. Less than 200% is really too low for a catering context, because you're also covering glasses, ice, garnish and service, not just the drink.

What factors determine your buying price

The buying price of spirits depends on a number of factors, some of which you can influence yourself:

• Volume: buy more per order and you pay less per bottle. Run five events a month, and you can negotiate bulk pricing.
• Supplier: wholesalers offer different rates than off-licences or importers. Always compare at least three suppliers.
• Brand and quality tier: own-label or B-brands give better margins but affect the client experience. Match this to your audience.
• Season: buying prices rise around holidays. Buy in September for the Christmas period, and you can sometimes save 10 to 15%.

Buying strategies that pay off most

A few approaches consistently give better buying margins:

• A regular supplier with an annual contract: as a regular buyer, you can negotiate discounts one-off buyers don't get.
• Seasonal buying: buy rum and warming spirits in spring, some during the summer lull, instead of right before an event.
• Brand comparison: test alternative brands with regular clients. A blind tasting shows whether a cheaper gin gets the same appreciation.
• Leftover stock management: overstocking specific brands costs you margin on leftover stock. Work with a limited but quality selection.

How do you calculate the right selling price

A simple formula for calculating your selling price per drink:

• Work out your buying cost per serving (e.g. 4 cl from a 70 cl bottle at €12 = roughly €0.69 per serving)
• Multiply by your target factor (× 4 = €2.76 net)
• Add VAT (21% = €3.34 including VAT)
• Round to a sensible amount (€3.50 or €4.00) that fits your positioning

Don't forget to count overhead costs for drinks too: glasses, ice, garnishes, service. Good drinks deserve good presentation, and that presentation costs time and materials.

Frequently asked questions

Can you sell spirits as a caterer without an extra licence?

In the UK you need a premises licence to serve alcoholic drinks. At a venue that already holds one, you work under that licence. At a venue without one, you apply for a Temporary Event Notice from the local council yourself. Check this for every event.

What's a good rule of thumb for margin on cocktails?

For cocktails, ideally aim for a cost price of 20 to 25% of the selling price. That's a factor of 4 to 5 on ingredient costs. Prep time matters with cocktails too: a complex cocktail needs more staff. Build that labour cost into your price per cocktail, not just into your hourly service rate.

How do I handle leftover stock after an event?

Make sure your quote states what happens to leftover drink: do you take it back or leave it behind. Drink you take back can be used at a future event. If you leave it as a "gift", price something in for it, because it does eat into your margin. Always put this in writing.

Is it smart to offer premium spirits at every type of event?

Not necessarily. Premium spirits have high buying costs and it's not always possible to earn that back. Match your offer to the event: for a business lunch, solid brands are fine, for a wedding or VIP dinner, premium spirits can be a strong selling point. Always ask the client about the atmosphere they want to create.

How do I build drink margins into my quote

Always list drink costs separately from food costs in your quote. That makes it clear to the client what they're paying for, and gives you insight into your margin per category. Also state whether the price includes service and glasses, or whether that's charged separately.

With Catermonkey you track your drink margins alongside your total food and service costs.

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