Tag Archives: restaurant wine sales

Winebits 336: Wine competitions, restaurant wine, and lawsuits

wine news restaurants competitons lawsuits ? Do wine competitions work? Tim Atkin, a British expert, says they do, and paraphrases Winston Churchill: ?Competitions are the worst way to evaluate wine, except for all of the others. ? Which is something I wish I had thought of, given I have a poster of Churchill hanging in the office. Atkin ?s take on competitions is thoughtful and makes several good points, including whether price should matter, quality of the judges, and that sometimes, wines do get lucky. His comments are most welcome given the current controversy over competitions, and that I ?ll be judging two of them in the next couple of weeks.

? Restaurants dropping wine from lists: Remember all those giddy articles about the progress wine was making with mid-priced chain restaurants, and how it meant they were finally going to take wine seriously? We might have spoken too soon. A new study has found that eight of the 10 biggest casual chains cut their wine selections by 17 percent in the eight months ending in March. The chains, including Olive Garden, Outback Steakhouse, Red Lobster, and Ruby Tuesday, may have decided that wine isn ?t worth the trouble, but that craft beer and spirits are, says the study, calling the shift unprecedented. My guess? That, since the recession especially pummeled these kinds of restaurants, they did what they always do ? relegate wine to what they consider its rightful place, out of sight and out of mind. Because wine is just too much trouble.

? Bring out the lawyers: The Wine Curmudgeon loves a good wine lawsuit, and this one looks to be a doozy. A Napa Valley producer is suing wine consultant for $1.6 million, claiming the latter didn ?t do a good enough job making a $200 wine. The article, in the Napa Valley Register, is so full of giggles that I can ?t do it justice here. My favorite? That the consultant went on vacation during a crucial part of the winemaking process.

Soda drinkers to restaurants: Drop dead (and why this matters to wine drinkers)

Too many restaurants have long alienated wine drinkers with lazy wine lists and greedy markups. Now, it looks like they have even alienated people who don’t drink wine.

NPD Group, one of the two or three best restaurant consultancies in the world, has found that consumers are forgoing costly soft drinks for free water. The reason? Diners are tired of paying overinflated prices for Coke, Pepsi, and the like — a trend that started before the recession, and only accelerated as they looked for ways to save money when eating out.

“Leaving off the beverage is the easy thing to do,” says Warren Solochek, NPD’s vice president of client services, and consumers are doing it with a passion. NPD reports that restaurant traffic has declined one percent over the past five years, but total beverage sales have dropped six percent.

Consumers, apparently, have three reasons for switching to water:

? The recession. Water is free, which can knock $10 off the bill for a family of four. “Consumers are working very hard to manage their spending,” says Solochek.

? Improved sensibilties. One glass of a soft drink in a restaurant costs as much as a six-pack at the grocery store, and consumers are noticing this more than ever. In this, says Solochek, there is evidence that our spending habits are genuinely changing, and that the post-recession consumer will be more practical in what he or she buys.

? Health perceptions. Soft drinks are mostly empty calories. Water isn’t.

What’s truly fascinating about this development is that it’s strictly about soft drinks. Restaurant wine sales have also declined, but Solochek says that’s because wine drinkers aren’t eating out as much. Instead, he says, we’re buying a bottle of wine and eating at home, where we don’t have to suffer those 3-for-1 markups. That soft drinkers are joining us in our disgust does not bode well for the restaurant business, which has traditionally used high prices for beverages, hard and soft, to boost profits. Those soft drink markups can be as high as 10-to-1.

And, to its credit, the restaurant business is aware of what’s going on. Solochek says owners and operators understand they need to be more innovative in how they approach beverage service, whether it’s for alcohol or soft drinks. This is one reason why many restaurants are pushing craft beer and signature cocktails; restaurant beer sales more or less held their own during the recession, thanks to the popularity of microbrews.

I’ve seen some of this change in Dallas, where a variety of restaurants are cutting wine prices and re-doing wine lists. Stephan Pyles, owned by the celebrity chef of the same name, has made over its list, focusing on more local, more interesting and less expensive wine. That this is happening at a restaurant where price resistance should not be a problem speaks volumes about what’s going in elsewhere in the restaurant business.

Does this mean the days of the 3-to-1 markup are over? Let’s not go that far quite yet. But it looks there will be changes, and we’re seeing some of them now. When groups as different as restaurant wine and soft drink consumers have something in common, we’re certainly not in Kansas anymore.