Proof of Purchase: Cocktail Prices Are Reaching New Highs. How Much is Too Much?
Even though I know it’s coming, it’s hard not to feel sticker shock when I get the bill at The Rye Bar in Georgetown’s new Capella hotel. On my tab: a $22 Manhattan and an $18 Old Fashioned. With tax and tip, the whole thing rounds out to $50. For two drinks.
Don’t get me wrong, the cocktails at The Rye Bar are very good, and the Manhattan is one of the best I’ve ever tasted. It’s made with Dad’s Hat rye, a small-batch whiskey from Bristol, Pa., Dolin sweet vermouth, and French aperitif Byrrh quinquina, all aged together for six weeks in American white oak barrels, making it so smooth that the buzz catches you by surprise.
It almost cost less. Before The Rye Bar opened in March, bar manager Will Rentschler had priced the Manhattan at $18. But after doing some market research and re-evaluating the labor and products involved, he bumped it up $4. “Our intention was to make the best possible Manhattan, so we weren’t as concerned with the price of the ingredients going in,” he says.
Everyone else in town, though, has been quite concerned with the price: The cost of the barrel-aged Manhattan has set off a food-media frenzy. The Washington Post declared it “The Most Expensive Non-Champagne Cocktail in D.C.”
That’s not even true. José Andrés’ new “cocktail lab” Barmini offers a drink for $25, which was bumped up from $17 two months ago when more premium ingredients were added. The “Big in Japan” consists of Japanese whiskey, muscat, Amaro, and a yamamomo berry, a marble-sized red fruit known as a “mountain peach” that grows only in Japan.
Bourbon Steak tops that with its $39 Centenaire Smash with Grand Marnier Cuvee de Centenaire, lemon juice, and mint served over crushed ice. And the new Penn Quarter seafood joint Azur briefly offered a $40 cognac-based drink. Meanwhile, craft cocktails at most upscale bars and restaurants in D.C. now average between $14 and $16. It’s no longer unusual to find cocktails that cost more than entrées. Which may have diners wondering: Just how much is too much to spend on a single drink?
When PX owner Todd Thrasher joined Café Atlántico in 1996, the restaurant became one of the pioneers of the local craft cocktail movement. His concoctions, including a margarita with a salt-foam rim, went for $7.50. Today, that drink is $14 at Barmini. If inflation was the only factor driving cocktail prices up, it would cost a little more than $11.
But over the years, several other changes have sent bar tabs soaring: Bartenders have begun using more craft spirits, which tend to be more expensive than mass-produced booze. Liquor and distribution prices have risen. Cocktails have become elaborate labor-intensive showpieces with hand-carved ice, housemade sodas and bitters, and infused or aged liquors. At the same time, the bartenders—or, ahem, mixologists—making them are becoming as famous as chefs, which helps justify charging a premium for their work.
Even with all the fancy flourishes and housemade, hand-crafted ingredients included in cocktails these days, bartenders say prices are still predominantly determined by the cost of the spirits. Not only have those costs gone up, Thrasher says, but so have gas prices, which translates to more expensive fuel surcharges for alcohol deliveries. In Virginia, where bars and restaurants have to buy liquor through a state agency, Thrasher says his alcohol costs about 30 percent more than in D.C. “That cost gets passed along to us, so we have to pass it on to someone else,” he says.
Think Food Group “cocktail innovator” Juan Coronado says labor (and the hand-sawed ice at Barmini) isn’t factored into his drink costs. The restaurant group has a computer system that allows it to plug in the ounces of various liquors and other garnishes used in the drink to help calculate the base cost. But something like that is rare for most bars.
The industry standard is an 18 to 20 percent markup on cocktails. “If you don’t hit those numbers, you’re going to go out of business,” says Thrasher, who aims for a 19 percent markup. At PX, where every drink is $13 or $13.50, he says the markup for individual drinks varies from 14 to 28 percent, averaging out to 19 percent for the entire menu.
Competitors’ prices also play a role. Fiola bar manager Jeff Faile bumped his $15 cocktails up to $16 at the beginning of the year after seeing that other restaurants nearby, like The Source, were charging that much. “The market sort of dictates it,” he says. “It is a business, ultimately. If drinks are selling, why not?” That doesn’t mean he wasn’t nervous about it. “I didn’t want it to scare away some of the regulars or some of the younger crowd,” Faile says. “But it actually seems to have been just the opposite.”
People are also willing to pay more because they’re more educated about spirits and the work that goes into preparing cocktails beyond pouring, stirring, and shaking. “They’ve read about Pappy Van Winkle, so they’re willing to spend the cash,” Thrasher says. “Overall, the guests coming into restaurants and bars are so much more informed than they were 10 or 15 years ago.” That savviness comes in part from the way throwback cocktails have become part of pop culture: Look no further than Mad Men or the new Great Gatsby film.
A name-brand mixologist can also get away with charging a premium price. It’s like ordering a burger from Tom Colicchio vs. the unknown chef at the burger joint down the street.
There’s something to be said for atmospherics, too. If you’re sitting on the Cerruti Baleri cactus sofa that costs more than your car at Barmini, maybe it makes sense for that to be reflected in the price of what’s going down your gullet. At many upscale restaurants, it can seem you’re paying for the ambiance as much as what’s in the glass. At The Rye Bar, you can sit in fancy leather armchairs and gaze at the C&O Canal. Across town at A&D in Shaw, you can order a barrel-aged Manhattan (albeit one that is aged a week and a half, not six weeks) for $13, tax included—but the wooden chairs are hard, and there’s not much to gaze at.
Faile says $16 isn’t that big of a deal for a place like Fiola, located off the power corridor of Pennsylvania Avenue NW. “But if you threw a $16 cocktail on one of the good H Street restaurants,” he says, “that would probably cause an uproar.”
In Georgetown, at least, people may be more forthcoming with their cash. Rentschler says The Rye Bar’s $22 barrel-aged Manhattan is the most popular drink. In fact, the bar sold its first batch—150 cocktails—in eight days.
But is there a price point at which we should say, OK, enough already?
My psychological barrier is anything over $16, although I have made exceptions as part of my job.
I asked a few cocktail lovers, who go out for drinks at least once or twice a week, for their thoughts. Rick Schwartz, a 28-year-old attorney for the federal government, names The Passenger and A&D as two of his go-to bars. He says he’s spent as much as $20 for a cocktail in New York. “If there’s a show involved, if you’re at The Columbia Room, the price is beside the point,” he says. “It’s worth it as long as it’s something new, different, and meets what your expectation is for the environment.” A classic cocktail, he says, shouldn’t be more than $15.
Rachel Schneidmill, a 29-year-old Adams Morgan resident who does digital marketing for a healthcare consulting company, can’t imagine paying more than $17 for a cocktail. “You’re paying for this experience, you’re not just paying for the liquor,” she says. That said, for $17, she expects some potency: “If I were to grade what I purchase, I think that would be part of it. How strong was it? Was it boozy, or does it taste like simple syrup?”
Brian Gray, a 40-year-old Web developer who often makes cocktails at his Columbia Heights home, calls $25 his cap. “I would have to really be sold on it,” he says. “It would have to be super special. They would have to be talking it up.” He says he’s willing to pay a premium for drinks from certain better-known local mixologists.
But Thrasher argues there ultimately is no price point at which a cocktail won’t sell at all. “They’re going to buy, and they’re going to bitch about it,” he says. “Even if it’s the greatest thing they’ve ever had in their life.”
Except there does seem to be a limit to what people will pay for drinks in D.C., and it’s somewhere south of $40. That’s what Azur charged for one drink with Martell XO cognac, Grand Marnier, and passionfruit juice when it opened last month. The cocktail, called the Magnus 165, was named after a $40 million superyacht.
Alas, not a single person bought it. Instead, former Bibiana general manager Francesco Amodeo, who recently started a line of limoncellos and liqueurs called Don Ciccio & Figli, came in as consulting general manager at Azur and axed it.
“You don’t really need to overcharge or use very high-end products to make a good cocktail,” Amodeo says. “At the end of the day, you want to be able to get the guest back, and today, only if you’re very competitive are you going to be able to do so.” Plus, expensive, high-end spirits are considered best untainted by other ingredients.
Now, you won’t find a single cocktail over $12 on Azur’s menu.
“I’m trying to put myself into the guest’s shoes,” Amodeo says. “If you come here and you present me a list that’s $20 to $40—sorry, I’m just going to drink a glass of water.”
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Photo of The Rye Bar's barrel-aged Manhattan by Darrow Mongtomery