Draft Beer Cost per Ounce: Price Each Pour From the Invoice

Draft beer cost per ounce is the keg's landed cost divided by the ounces you actually sell. A half barrel that lands at $198 with 1,800 sellable ounces costs $0.110 an ounce. Below, you build that number from the invoice, turn it into a price for every pour from taster to pitcher, and reprice when the next keg costs more.

What counts as the cost of a keg?

Keg cost is what you paid to get that keg into your walk-in, built from the lines on the invoice.

Put in:

• The beer price on the invoice line.
• Any delivery or fuel charge, split evenly across the kegs on that delivery.
• Any per keg tax or fee printed on the invoice.

Leave out:

• The keg deposit. You get it back when the empty goes back.
• Gas, line cleaning and glassware. Those costs run the whole draft system, so they belong in overhead. Fold them into 1 beer and the sheet changes every time the gas bill does.

How many ounces are in each keg size?

A half barrel holds 1,984 fluid ounces, a quarter barrel holds 992 and a sixtel holds 660, according to the keg size table on page 6 of the Brewers Association's Draught Beer Quality Manual. The names come from federal beer rules, which define a barrel as 31 US gallons (27 CFR 25.11, published by Cornell's Legal Information Institute).

The last column is a ceiling, because no keg sells every ounce.

How much of each keg actually sells?

Usable ounces are the ounces that get rung up, and only your own counts can set that number. Beer leaves the keg unsold as foam when you tap it, foam as it runs low, line clearing, spills, and the taste you pour a regular who can't choose between 2 IPAs. How much you lose depends on your system, your temperatures and your crew.

You can get there 2 ways:

1. Measure. For the next few kegs of a steady seller, total the ounces you rang up (pints sold times the beer in a pint, plus the other pours) and compare that with the ounces in the keg. The gap is your loss on that line.
2. Start with an allowance and check it. Choose a number of ounces to subtract from every keg of each size. After a month, compare the allowance with the kegs you measured and adjust it.

Put usable ounces on the sheet. If you price off the full 1,984, you are assuming every drop sells.

How do you work out cost per ounce?

Divide keg cost by usable ounces and carry the answer to 3 decimal places.

Cost per ounce = keg cost / usable ounces

The numbers below are an example, not market prices. Say a half barrel of helles lager lands at $198 with the delivery charge split in, and your allowance on half barrels is 184 ounces. That leaves 1,800 usable ounces.

$198 / 1,800 oz = $0.110 per ounce

A premium keg works the same way. Say a sixtel of barrel-aged imperial stout lands at $180 and your sixtel allowance is 60 ounces, which leaves 600 usable.

$180 / 600 oz = $0.300 per ounce

Real invoices won't divide this cleanly. Keep the 3 decimal places until the last step, because rounding here puts the error into every pour.

How do you turn cost per ounce into a menu price?

Multiply cost per ounce by the beer that actually goes in the glass, multiply again by your multiplier, then round. A glass poured with a proper head holds less beer than its size. The Brewers Association manual (page 56) recommends about a 1 inch collar of foam and calls filling a glass to the rim overpouring.

Measure your real pours once. Fill each glass with water to where the beer normally sits under the head, tip it into a measuring cup, and write that number on the sheet. Then:

Pour cost = liquid ounces x cost per ounce
Menu price = pour cost x multiplier, then round

Your multiplier comes from your rent, your labor, what your guests will pay and what bars near you charge. Some owners think in a multiplier and some in a target pour cost; a multiplier of 4 is the same as a 25% pour cost. Get the figure from whoever does your books. The example uses 4 because it is easy to follow.

Example continued, at $0.110 an ounce, a multiplier of 4, rounded up to the whole dollar:

Strong beers that pour small follow the same steps. The stout at $0.300 an ounce goes out in an 8 oz glass that holds about 7.5 ounces of beer. 7.5 x $0.300 is $2.25, and x 4 is $9.00, so it goes up at $9.

Flights and to-go fills start from the same cost per ounce. The math for those lives in how to price a beer flight and growler and crowler fill pricing.

Which rounding rule should you use?

Use 1 rounding rule for every beer on the list, either up to the next whole dollar or up to the next 50 cents.

• Up to the whole dollar keeps the board clean and change simple. It also builds in a small cushion, so a small cost bump often doesn't force a new price.
• Up to the next 50 cents tracks cost more closely. You will change prices more often over a year.

Either rule works if every beer follows it. When 1 beer rounds to the dollar and the next to the half, the board looks random to guests and staff start guessing.

How should a pitcher be priced against the pint?

Price the pitcher from the same cost per ounce, then decide on purpose how much of a break it gets. In the example, the pitcher holds 54 ounces of beer, just under 4 of your 14 ounce pints. You have 3 options:

1. Charge the pint's rate per ounce. The pint is $7 for 14 ounces, or $0.50 an ounce, so 54 ounces comes to $27, against $28 for 4 pints. The table pays for convenience and gets no discount.
2. Use the straight multiplier: $23.76, rounded to $24. That is a $3 break against the pint rate, and every dollar of it is still priced from cost.
3. Go deeper, but only if pitchers bring in volume you would not sell otherwise. Write down what you give up per pitcher, in dollars, so the decision sits on paper.

A pitcher is also 1 pour where 4 pints would be 4, which matters on a busy night. If that saves real labor at your bar, it is a fair reason for the break. A pitcher deal that runs only certain hours is a separate decision, covered in happy hour beer specials without price fights.

What do you do when the next keg costs more?

Rerun the numbers when the invoice arrives, and change the board when that keg is tapped. Make it part of receiving:

1. When the delivery comes in, check each invoice line against the last keg cost on the sheet for that beer.
2. If the cost matches, you're done.
3. If the cost changed, add a row and rerun cost per ounce and every pour.
4. If the rounded prices didn't move, leave the board alone.
5. If a rounded price moved, the new price goes up when that keg is tapped, not when it is delivered. The keg on the line now was bought at the old cost.

Example continued. The next half barrel of the helles comes in at $216, $18 more than the last one.

$216 / 1,800 oz = $0.120 per ounce

The half pour went from $3.96 to $4.32 before rounding. Under the whole dollar rule the guest sees $4 become $5; under the 50 cent rule, $4 becomes $4.50. The pint went from $6.16 to $6.72 and stays at $7 under the whole dollar rule, which is the cushion at work. Under the 50 cent rule it moves from $6.50 to $7. Settle the rule while things are calm so nobody decides it mid-shift as the keg goes on.

When the tap list runs on screens, the board change is a single edit. On a TapDisplay board, each tap shows a price per pour, 2 pours by default and up to 4, and you can change it from a phone, a tablet or a computer when the new keg goes on. Each connected screen checks for changes every 30 seconds, so the new price shows within about 30 seconds. Kicks, new taps and the pre-open check are the other times the board needs touching; how often to update your tap list covers those.

What goes on the cost sheet?

Each keg gets its own row, under a short block of house settings that every row uses. Copy it into a spreadsheet or onto a clipboard. When a new beer goes on a tap, it gets a new row and does not inherit the old beer's prices.

House settings:

Multiplier (or target pour cost from your books): ______
Rounding rule: ______
Liquid oz: taster ___  half ___  pint ___  pitcher ___
Loss allowance: half barrel ___ oz  quarter ___ oz  sixtel ___ oz

The first 2 rows hold the helles example, before and after the price rise, under the whole dollar rule.

If you list pour sizes on the board, keep them in the same order on every line so the prices from this sheet read the same way across taps. ABV, IBU, style and pour size on a draft menu covers how to write them.

The bottom line

Cost per ounce ties the invoice to the board: keg cost over usable ounces, carried to 3 decimal places. Every pour, from a 5 oz taster to a 60 oz pitcher, is the beer in the glass times that number, times your multiplier, rounded by a single rule. Check the sheet at the back door when each delivery lands, and change the board when the new keg is tapped.