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Tag Archives: wine trends

Restaurant wine prices: A better way

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Restaurant wine pricesWhat better way to follow up this month’s very popular post about escalating restaurant wine prices than with a story about restaurants that charge reasonable prices and sell more wine — and make more money — in the process? That was the theme of my piece in the current issue of the Beverage Media trade magazine, where one restaurateur told me: “We want our customers to be able to have dinner for two with a glass of wine each for $35 a person.”

Revolutionary thinking in a world where glass of wine costs $10 and bottles are marked up four times their wholesale price, no?

The highlights of the article, as well as a few of my thoughts:

• The debate centers around volume vs. margin; that is, does the restaurant want to sell a lot of wine, or is its business model focused on the amount it makes per bottle? This margin approach, which has been the model most restaurants use, has given us the $10 glass. Not surprisingly, those who use it still see no reason to change.

• Yet an increasing number of restaurants see a better way. “There is sort of this infrequently spoken gripe from consumers: ‘Why are we paying these kinds of markups?’… [T]hey are going to be cynical about your wine program.” says Stan Frankenthaler, chief officer of food, beverage and strategic supply for CraftWorks, which operates about 200 restaurants under 11 brands, including Old Chicago and Rock Bottom. That someone at a chain said this speaks to the failure of the margin model, since chains have some of the worst and most marked-up wine lists.

• A better approach: Pricing tiers, like 4 times wholesale, 2½ times, and 2 times, based on quality and availability. If the wine is difficult to find, for instance, or offers exceptional value, we’re more likely to pay 4 times markup — and especially if we have legitimate, less expensive choices instead of grocery store wine masquerading as something else.

• This story includes advice from my pal Diane Teitelbaum, who died shortly after I interviewed her. “You can sell a $100 bottle once a day, or you can sell $20 bottles of wine all day and all night,” she told me. No wonder everyone misses her so much.

 

 

The Wine Curmudgeon’s first wine prices survey

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wine prices One of the difficulties with writing a wine blog that focuses on price, and that most of my colleagues don’t have, is that there is no standard for wine prices in the U.S. One region’s $10 wine can be another’s $15 wine, and this doesn’t take into account states with minimum pricing laws or those with government-owned retailers.

It’s not the problem availability is, but it’s enough of a problem that I decided to do this post, which is also something many of you have asked for. The goal is to get pricing data from readers around the country, put it into a spreadsheet, and see if we can determine regional differences. That is, we’ll know that a wine in Dallas will cost 10 percent less in one place or 15 percent more in another. That way, when I list the price, you can make the appropriate adjustment.

So let’s do this:

First, e-mail me the prices for two or three wines you buy regularly, as well as where you buy them. Or, you can click the Contact link at the top of the page. Preferably, these should be wines we talk about on the blog, since doing it for wine prices higher than $15 won’t help much. I’ll take your prices for the next month or so, until Mother’s Day.

Then, I’ll flesh out your numbers with wine prices from retailers I know around the country, using your wines as the guidelines.

Finally, I’ll crunch the numbers and publish the results on the blog. We also might be able to learn a thing or two and make some news in the process: Are Big Wine prices more consistent? Do state taxes make that much of a difference? Are some retailers more or less expensive?

Premiumization: Are wine drinkers really trading up?

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premiumizationThat’s the top trend in wine this year, that we’re feeling better about the economy and trading up: Buying more expensive wine than the wine we bought during the recession, moving from $4 bottles to $8, from $8 to $12, from $10 to $15, and from $15 to $20.  The wine business calls this trend premiumization, and the salivating at the prospect has reached epic proportions.

That’s because the wine business doesn’t necessarily want to sell cheap wine — it’s not as profitable and it doesn’t carry the prestige that selling more expensive wine does (a much more important reason than consumers can possibly imagine). Plus, selling cheap wine requires more work. You can move a tanker truck of $25 wine in 20 minutes if it gets a 95, but cheap wines don’t get 95s, the competition for shelf space is ferocious, and most cheap wine is sold by the biggest retailers, who demand the best deals and which makes cheap wine even less profitable.

Hence premiumization, which some of the smartest people in wine say is here and isn’t going away. I’m not so sure, and I don’t say this just because my livelihood is cheap wine. As I continually remind people, there has never been a definitive study made public that demonstrates that wine drinkers trade up. Everyone just assumes it’s so. But does anyone know a wine drinker who went from Barefoot to Bogle to Hess or Rodney Strong to Silver Oak?

More, after the jump:

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