Alcoholic beverage costing practices in the hospitality industry
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Little research exists on the best practices of costs of goods sold percentages for wines, beers, and spirits in the hospitality industry. This study attempts to determine the cost percentages of wines, beers, and spirits of current food service operators in restaurants, bars, and hotels and the different segments within those industries. The study also examines if market sizes affect the percentage costs of goods sold for different beverage alcohols, and how often beverage costs are calculated by different operations. Using an eighteen item questionnaire, food service managers in restaurants and hotels across the United States were surveyed, via an online survey program, on their current business practices for costing wines, beers, and spirits. The researcher concluded the average costs of goods sold were 24.83% for overall beverages, 26.58% for wine, 21.92% for beer, and 19.37% for spirits. Statistical significance was not only found between the means of both hotels and restaurants but also within their segments. Market size was also significant to cost of goods sold percentages. The study will be beneficial to the food service industry’s business practices as well as to hospitality education and the preparedness of graduates for the hospitality industry.