The Economics and Ethics of the $26 Cocktail

The mai tai at Here's Looking at You
The mai tai at Here's Looking at You
Anne Fishbein

This week, Garrett Snyder reviewed Here's Looking at You, a restaurant that has received almost as much attention for its $26 mai tai as for its inventive new American cooking. The price of the drink breaks some records in Los Angeles, at least on the level of a neighborhood spot with a cool cocktail program — I know there are bars and restaurants in town that charge big bucks for drinks, thanks to gimmicks or exceedingly rare spirits, but there's something different about the $26 mai tai. It sets a new standard for what regular people are willing to pay in a regular restaurant for a drink. 

Is it worth the cost? Is the cost reasonable? Here's what Garrett had to say on the matter:

And that $26 mai tai? It is indeed very good, but at roughly double the price of other cocktails on the list it's hard to justify its value, considering that the indie rum used to make it is neither particularly rare nor outrageously expensive compared with other high-end spirits utilized at upscale cocktail bars. Try the perfectly suitable $15 mai tai instead, which is made with the same house-made orgeat and curaçao as its pricier sibling.

Even $15 would have been considered steep for a cocktail a year or two ago, even with house-made this and that. Raising the bar to $26 makes $15 look like a bargain in comparison. 

The reasoning behind the price, according to bartender Allan Katz, who created the drink, is the rare and limited rum that's at the base of the cocktail. Katz tells the Los Angeles Business Journal, “The cost of making this drink is triple the cost of your average classic cocktail at this bar.” The rum — Smooth Ambler's Revelation — is apparently very close to the Jamaican rums that would have been used when the mai tai was invented, meaning the drink is in some ways like tasting history. (I've had it. It was delicious. Was it $26 worth of delicious? I'm doubtful, but again, it's the history you're paying for, not just the deliciousness.)

That Los Angeles Business Journal story claims the Revelation rum is around $60 per bottle wholesale, though I've found it retail for a few bucks less than that, so I'm assuming the wholesale price is actually much lower. Still, I'm no expert on cocktail pricing, and I wasn't even sure if a spirit like this would make a difference in flavor to a cocktail as complex as a mai tai. So I reached out to a few folks who would know. 

One rum expert and bar owner, who wished to remain anonymous when talking about someone else's business, told me he thought the price was reasonable. "Most spirits used in $15 cocktails in the L.A. market are not this expensive," he said. He went on, "Revelation is a long-aged Jamaican rum, which is closer in spirit to the original rum the mai tai was born with, so it makes sense in here. The mai tai is a fairly simple drink that is designed to showcase good rum, so it's good for the taste of the cocktail here."

Christiaan Rollich, who is responsible for the drinks at Suzanne Goin's restaurants (A.O.C., Lucques, etc.) broke down the pricing of a cocktail for me. I spoke to him specifically because I know he makes all his own syrups and special ingredients, similar to Katz. "My markup on straight liquor is about five times. (If my cost per shot is $2, I charge $10)," he explains. With that formula in mind, he broke down the cost of a mai tai using rum expert Jeff Berry's recipe:

"1 oz. amber Martinique rum (say it is the special $50 rum $1.96)
1 oz. aged Jamaican rum (say it is $35 per bottle $1.37)
1 oz. fresh lime juice $0.13
1/2 oz. orange curaçao give or take $0.67
1/4 oz. orgeat $0.20
1/4 oz. simple syrup"

With that recipe in mind, Rollich says, "I think you can make a very fancy drink for $4 and change, so $20 would be a great price." (It should be noted here that this is an estimate on his part and he has no inside information about what they're actually using or the labor involved ... though we do know the approximate price of the Revelation rum.) But Rollich doesn't fault the folks at Here's Looking at You one bit. "If they can charge $26 and get away with it, good for them," he says.

And in the long run, good for him, too. The more the market shows it can bear, the higher drinks will become everywhere. That's how perspective works: When comparing the mai tai to the other drinks on Here's Looking at You's menu, the Los Angeles Business Journal story writes (emphasis mine): "You need only pay $14 or $15 for drinks like the Strawberry Solstice martini or the College Radio." Only $15!! Bargain!

"I think the $26 is great for press," Rollich says. "You and I are talking about it!"

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Here’s Looking at You

3901 W. Sixth St.
Koreatown, California 90020


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