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Restaurant Industry Intel

Why Are Craft Cocktails So Pricey?

Mixologist Jim Meehan on Craft Cocktail Prices

Mixologist Jim Meehan © Lyndon Hayes

A $15 drink is expensive for a reason. Mixologist Jim Meehan traces the cost back to hand-carved ice and leather (not pleather) seats.

In explaining the $15 cocktail, it's natural to look for the answer in the glass: Is this liquor worth it? But the value of the alcohol is just a small part of the cost. The truth is, you have to look outside the glass to understand the price of what's in it.

First, there's what I call the price of doing business—like rent. It's unavoidable and can vary quite a bit from place to place; a drink is going to cost more in a high-rent neighborhood like South Beach than Downtown Miami.

Next are the expenses that are essential for creating a great cocktail bar. For example, when I first opened PDT, I started with $11 cocktails and a laminated paper menu. But then I switched to leather-bound menus that cost me $50 apiece, and we have at least two stolen every week. Pretty much the only way I make money is by selling cocktails, so my prices had to cover that cost. Then when we installed beautiful oak tables, and changed the pleather seats to leather, again, we had to raise the price. There are all sorts of hidden costs. Glasses break and high-quality ice can be expensive—each gin and tonic at PDT comes with nearly a dollar's worth of ice (we get it hand-carved from Shintaro Okamoto, an ice sculptor). Making PDT a nicer place to drink comes with a price tag.

There's a dark side to this, which is that because bars like PDT exist, other places can set higher prices even if some cut corners. Bars that sell drinks that are much less expensive than their local competition are saving money somehow. It could be cheaper booze, cheaper glassware or a higher sales volume, which usually means packing people in. Look around you: If there's a disparity between what you're seeing and what you're paying, then you probably are paying too much.

I understand the concern about high prices, because it's terrible to feel ripped off. But you don't have to buy anything you don't want. If you can't stand places with bearded, bitters-wielding bartenders, don't go. I'm lucky: I run a small, specialized bar in a big city, so it doesn't have to appeal to everyone—it's not meant to be Cheers.

Cocktail pioneer Jim Meehan opened PDT in Manhattan in 2007. He is the deputy editor of Food & Wine Cocktails.

Related: Fabulous Cocktail Bars
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Best Bar Food in the U.S.

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