You don't have to be a barfly to notice menus serving artful cocktails for $25 or even $30 a pop these days. But despite this recent report, fancy ice isn't driving up the price of your favourite drinks, according to some industry leaders. Rob Libecans, co-owner of Melbourne bar Caretaker’s Cottage, believes we must reconsider the value of a premium cocktail and the true cost and effort behind every glass.
“I love our bar scene, places like Pearl Diver, One or Two and Byrdi push the capabilities of what drinking can be,” Libecans tells Broadsheet. “But they shouldn’t have to constantly wear the cost of price increases. At some point the price needs to change. It’s easy to blame ice, [but] it’s easy to forget that our house Martini took over 300 failed experiments to get it just right when we pour it from a frozen flask. Knowing the true value of something should only add to the enjoyment.”
Caretaker’s Cottage is currently ranked number 23 on the World’s 50 Best Bars list, and its cocktail menu changes monthly. “We have strict guidelines when it comes to creating drinks,” Libecans says. “We have to hit certain margins as an average, across the menu.”
Take the raw cost of a Negroni, which Libecans approximates at:
Gin: $2.20
Campari: $2
Sweet vermouth: $2
Clear cut ice: $1.10
Garnish: 10c
= $7.40
“If we sell it for $22, it gives you a gross profit of $14.60, or 66.36 per cent,” he says.
While this might sound like a lot, the actual profit margin after running costs is much lower. Libecans says up to half of the gross profit is eaten up by staff wages (including casual shifts covered due to illness), insurance, utilities, rent and even breakages. “We are a busy venue but try to make drinks to the highest standard that also look the best they can," he says. "One busy week we broke or chipped nearly $1000 of glasses.”
Libecans notes additional pressures in recent years, such as alcohol taxes rising four times since Caretaker’s Cottage opened, post-Covid import increases and supermarket price hikes. “The price of every element that goes into a drink has gone up. Factor in more staff, insurance premiums increase of 200 per cent, electricity and gas … the list is endless. But should the price of a cocktail go up? Can you really expect people to pay $30 for a drink? Pretty doubtful.”
Mel Hack, bartender at award-winning Whisky & Alement, says every venue has its own pricing structure based on profit margins, and there’s no single factor pushing up prices – though massive rent hikes are hard to work around. “We’ve had friends’ bars have to close practically overnight because of rent increases around 50 per cent,” she tells Broadsheet.
Hack says time and skill must also be factored into the cost of a cocktail, alongside ingredients and venue costs. She estimates that each cocktail at Whisky & Alement involves 24 to 72 hours of prep, including infusions and straining or clarification, with some ingredients taking up to a month to prepare.
“We’re getting to the point where it’s on par with chefs making a meal,” Hack says. “We spend months preparing seasonal menus. The level of effort and attention to detail that goes into cocktails can be the same, but you don’t see this big, detailed description about how everything is made [like on restaurant menus].”
Hack is also a competitor in cocktail contests, placing in the top 100 for World Class Australia 2023, and winning a Maker’s Mark Sustainable Bartender award. Many competition cocktails end up on menus, giving them the chance to experiment, and in Hack’s case, progress sustainability.
She points out that sustainable practices – such as those at Sydney’s trailblazing Re– bar – also take more time and prep, meaning more skilled staff working more hours. In short, if consumers want creative drink development and sustainable systems, they’ve got to be willing to pay for a better cocktail.
And as for that fancy ice? It’s worthwhile: a big block of beautiful, clear ice makes for a better, less diluted drink.
