Consumer Reports

Why Are Cocktails So Expensive Right Now?

With some drinks now costing as much as a nice meal, it’s hard not to wonder whether the drink is worth it.

By Lauren Jackson July 1, 2022 Published in the July-August 2022 issue of Sarasota Magazine

A Smoked Old Fashioned from The Doctor’s Office

A Smoked Old Fashioned from The Doctor’s Office

Inflation in the U.S. stands at around 8.6 percent, and it’s hitting the nation’s essentials hard. Groceries are more expensive, home prices are insane and the cost of craft cocktails is through the roof.

After two years of being cooped up, quarantined and social distanced, the high price of a cocktail is a worthy expense for many people. But with some drinks now costing as much as a nice meal, it’s hard not to wonder whether the drink is worth it.

Josh Hojnacki, manager of The Gator Club, says that the prices of some drink ingredients have gone up between 20 and 30 percent over the last year. The most heavily used items, like citrus, have seen the greatest price hikes. And with the rising cost of fuel, companies are transferring that expense to bars, as well. Bar managers must also factor in labor, insurance and other costs. For now, rising prices haven’t put a damper on business at the Gator.

“The market can bear the price,” says Hojnacki. “It’s a luxury market now.”

Topher Nalefski, the beverage director at Meliora, says customers don’t always see the labor that goes into making a $17 drink, like infusing liquors with flavors long before they are poured.

“I put three hours of labor into that infused tequila every week,” says Nalefski. “We are creating things like we would in a traditional kitchen, so our cocktails are dishes. When you see a dish at a restaurant, there is a lot that goes into it, and we are trying to match that complexity with our cocktails, and that time and labor has costs. That drink has to pay for training, pay for the bartender and pay for the rent.”

Some insider knowledge helps when determining whether the cost of a cocktail is worth it, and not an unscrupulous price hike in a wealthy market. Nalefski says that knowing the quality of a spirit in a drink and analyzing the components that go into it are important when determining whether a drink is priced correctly. If you’re drinking a Tito’s and soda for $15, you may have fallen victim to a luxury tax.

“When I see a cocktail for $24, I want to be able to see them do the things that make it worth it,” says Nalefski. “Some places will put $4 of alcohol into a cocktail and charge $24. That’s what grinds my gears. Part is to keep the lights on, but part is because people will simply pay for it.”

What you’re paying for when you order a drink

Base liquor: 52.6%

Mixers: 29.1%

Labor: 12.2%

Overhead (glassware, rent, etc.): 6.1%

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