Happy hour is not a marketing tactic. It is a margin control system.
If you discount the wrong drinks, you train guests to buy your weakest items. This guide shows how to price happy hour so you win traffic and profit.
Quick Summary
- Start with pour cost math, not vibes
- Discount low-variance items first (beer, house wine)
- Use a ladder: small cuts on high volume beats deep cuts on low margin
- Track packaging and garnish costs for to-go cocktails
- Reprice when ingredient costs shift, not when your calendar says so
The Happy Hour Math You Need
Pour cost % = Drink cost / Menu price
Happy hour price = Drink cost / Target pour cost %A discount only works if the new pour cost still leaves profit. That is the entire game.
Pick the Right Discount Targets
Best first picks:
- Draft beer
- House wine
- Simple highball cocktails
Use caution:
- Signature cocktails with prep labor
- Top-shelf spirits
- Anything with high garnish or batching waste
Happy hour should feature simple, repeatable drinks with consistent portions.
Build a Simple Discount Ladder
A ladder keeps volume high without collapsing margin.
Example structure:
- Draft beer: $6 → $4.50
- House wine: $8 → $6
- 2–3 core cocktails: $10 → $8.50
Small discounts move volume and protect pour cost.
Example: Cocktail Discount That Still Works
Assumptions (example):
- Cocktail cost: $2.10
- Base price: $10
- Target pour cost: 22–26%
Happy hour price:
$2.10 / 0.25 = $8.40Working range: $8.00–$8.50
If you drop to $7, pour cost jumps to 30%. That is a margin leak disguised as a deal.
Do Not Forget Takeout Costs
If you sell to-go drinks, count:
- Cup + lid + straw
- Seals and bags
- Extra garnishes
To-go packaging can add $0.35–$0.80 per drink. If you ignore it, happy hour becomes a loss leader by accident.
Signals for Repricing
Use external signals so you do not wait too long.
- Track Food Away From Home CPI as a pricing health check
- Watch USDA food price outlook for annual pressure
If costs are moving, adjust happy hour before your base menu gets out of sync.
How KitchenCost Helps
KitchenCost lets you:
- Set exact pour sizes by recipe
- Store garnish and packaging as line items
- Recalculate happy hour prices in seconds
Want to keep happy hour profitable? Try KitchenCost.
Related guides:
- US Menu Pricing Calculator
- US Restaurant Portion Control Guide
- US Restaurant Prime Cost Calculator
- US Delivery App Pricing Guide