by the glass
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- n144mann - 03-06-1999 08:44 PM
Ok WC, Rick didn't take your bait, so I will bite. Why is it that restaurants charge $6.00 for a glass of wine from a bottle that they paid $10 for? And how is it that a $10 bottle from a wine shop, at the restaurant costs you $20 or more?? It stinks to pay so much extra for a wine just because someone else is pulling the cork. When I worked in a restaurant, there were certain things we charged more for because they were high waste items, but I don't see how a bottle of wine would fit in that category. I know its all about dollars and cents, but why do they need such a high profit margin. Is there anyone out there that knows why this is neccessary??
[This message has been edited by n144mann (edited 03-06-99).]
- Jason - 03-07-1999 12:42 AM
Ahh yes, the lovely wine pricing debate.This is the third rail in the restaurant world, but here goes.
The fact is, the house has so many expenses that wine (and liquor especially) are the providers.The guest does not comprehend the overhead and this is what kills many inexperienced people opening a place of their own. We have all seen busy places go broke, simply because of too many expenses.
When plates, glasses, flowers, linen, etc. are all factored in the industry average margin is 5-7% of gross. Not a very good way to get rich. We all love Reidel stemware, cotton napkins and oversize 15" plates, but these are all big bucks and very fragile at that.
A few years ago there was a debate in Spectator about the use of proper stemware. The editor's argument was that the house could charge $1 more per bottle and this would finance the breakage. Anybody with a calculator and a Reidel pricing sheet would know that this math is highly skewed.Larry Stone wrote in to say that he went through
$10,000 worth of stemware in the first year of going to a premium stem. The glassware changed very quickly.
This is not to say that some places do not gouge, but many are fair in their pricing. Many places would love to decrease their prices, but simply cannot afford to.
All of those nice details that seperate your favorite place from Burger King carry a price tag and wine carries the burden of balancing it.
And while we're here, why doesn't anyone get upset over paying $4.50 for a shot of Absolut? Do the math, and your $20 bottle looks like a bargain.
- Jerry D Mead - 03-07-1999 02:33 AM
The industry standard is pretty much three times wholesale, which works out to twice full mark-up retail, or maybe 2 1/2 times what you actually pay at a discount store.
The arguments above re overhead and stemware etc have some validity...but one must ask why wine drinkers should be asked to cover that overhead while the iced tea drinkers get a more or less free ride.
Also, why is it that the mark-up is never less at the places using Libby jelly-glass and not Reidel?
It has been my observation that a restaurant can get huge mileage (and increased sales)by employing more reasonable mark-ups and by learning that it's dollars and not percentage that the restarateur puts in the bank. When wine prices are really reasonable, I tend to order two bottles rather than one.
Why put D.P. on the list for $200 and never sell any, when if it were posted at retail the customer might be tempted to pop for a bottle even when drinking a special bottle wasn't part of the plan for the evening...and the restaurant would still but $30 or more in its pocket for pulling a cork...what's wrong with that?
I can tell you how I deal with overpriced lists. First, I do not drink great wines at restaurants...I drink them at home. I look for bargains, less popular wines and varieties and low profile bottlings. (Very often the last page in a big wine book will have the misc. stuff...wines from Argentina, Bulgaria, Spain or South Africa...and often at lower mark-ups and more time in bottle because they don't turn over rapidly.)
Chardonnays are all $30 and up? Check out the Sauvignon Blancs or look for a barrel-fermented Chenin Blanc like Chappellet.
Rieslings, from America or Germany, are almost always bargains these days, because they aren't fashionable and restaurants often don't take a full mark-up.
My general rule (special occasions and irresistable wines aside)is that a wine should not cost more than the price of one entree.
Call me cheap if you like, but I see wine as a beverage to accompany my meal when I'm in a restaurant...not some exotic experience. And if the wine is too outrageously priced, I switch to some other beverage...beer, tea or coffee. And I make a point of telling management that they may have got their mark-up on that cup of coffee, but they'd have made a bunch more dollars if only the wines had been a little more reasonably priced.
Let me hasten to add...I do not begrudge a restaurant any price they wish to charge for collectable and special wines they have cellared, that are tightly allocated or impossible to replace, and for which a wealthy clientel are willing to pay. All I ask is that they have some reasonably priced "beverage" wines for me to drink as well.
The "Value-Oriented" Curmudgeon
- Jason - 03-07-1999 10:40 AM
I wish more places would adopt a lower margin/higher volume concept as well. I think that you have to have a sophistocated clientele that notices it. For those of us on this BB this concept is common sense and we would all order more wine. However, the annual per capita consumption is still what? 2.6 - 2.8 gals? These numbers say the masses would still only buy the one bottle. This is heading in the right direction with consumers becoming more saavy, but few restaurants swim in this pool.
- n144mann - 03-07-1999 02:06 PM
Hi guys, thanks for your responses. I know the restaurants need to cover their expenses, but I agree with WC that we seem to be carrying more than our share of the burden. We are not the only ones enjoying those nice oversized plates and linen napkins. As for ordering two bottles instead of one, we are certainly in that boat. We would be much more likely to do that if the bottles prices were more reasonable. After eating out this weekend, (and unfortunately making a poor choice of syrah) I came home and had a nice glass of port rather than try something else from the restaurant. This restaurant is one that I frequent, and it has some nice wines, I know I could have found something that I would have enjoyed, but not for the price they were asking. Guess I'm cheap too! Is there anything that we can do as wine drinkers to get more restaurant owners/managers to "swim in that pool" ???
- Jerry D Mead - 03-07-1999 02:21 PM
Try letting the owner/manager know how you feel...inquire about corkage policies...buy a single glass to get you through the meal and have that Port when you get home.
Encourage management to have at least a few wines in the price category in which you are comfortable.
I'm fortunate here in Northern Nevada...competition (food prices are low because of all the casinos using food as an attraction, which forces value pricing on even the free-standing restaurants)keeps wine prices in the very reasonable range, save for at the most chi-chi restaurants.
- Thomas - 03-07-1999 02:37 PM
Having worked on the wholesale end of the wine business, I have had this discussion with restaurant owners and managers for years.
WC is absolutely correct again - this is getting to be a habit with you.
Far too many restaurants do not go the lower margin-high volume route because it means the management will have to work a little, as in training the staff to sell wine.
It always drove me nuts that the waistaff is told to be sure to tell the customer what is on the menu, but only in the smartest places is the staff taught the same about the wine list. And why do restaurants make a point of briging out the dessert cart but cannot find the wherewithall to similarly bring out the wine cart?
All those glasses and expenses arguments, as far as I am concerned, are complete nonsense.
Anyone here been to Italy? The restaurants there have glasses and expenses, yet a bottle of wine - great wine - can be had for near retail price in most restaurants that are not tourist traps.
- Jason - 03-07-1999 10:50 PM
Where have all the restauranteurs gone? Come on guys they're killing me over here. Hello?
Anyway, the Italian thing is interesting but nobody operates in a vacuum. From those people I have spoken to, nobody thinks Italy
is a bargian place to live so I must ask -are we comparing apples to apples here? I don't know, but the rest of Italy certainly makes up the difference of any savings on wine. And almost every table has wine.
We are not the first group in the world to debate this issue. The bottom line to all these rants is that most houses would not survive without the current pricing. We may carry more than our share but who will pick up the slack? Raising food prices will still hurt the wine drinkers. Food and wine costs run about the same in most better places, so why does wine take all the heat?
From someone who used to "do a little work" as a restaurant manager and watched the
P&L's, I'm here to say that wine pricing is crucial. Until we can get the public to drink more, we won't see significant change.
- n144mann - 03-07-1999 11:34 PM
ahhhh corkage fees, now how does a restaurant go about setting their corkage fee?? Is it completely arbitrary or is there some formula that is generally followed?? OK Jason, any ideas on how to get the public to drink more wine??? If the restaurants would benefit from this, wouldn't it make sense for them to be in the front of the battle? Have feature wine nights where superior wines are lowered in price and drawn to the attention of the customers. Speaking for myself, if I have had the opportunity to taste a certain wine that is normally out of my price range, and I like it, I am much more likely to spring for it some other night at the higher price because the risk has been removed. I think the idea of training all, or at least a select group, of the servers about the wines and how to sell them to the customers also sounds like a good idea. And, as for bringing out the wine cart with dessert, I would have loved that Friday night when I was out. I didn't want dessert, but could have been talked into a nice dessert wine.
- RickBin389 - 03-08-1999 12:34 AM
O.k., o.k...I've been "chewing on the bait", not evading it. This is a very deep subject that will invoke the ire of many...too many opinions ,too many regulations , and to some extent, too many bad apples in my business. I hate to get too technical on this topic, it's too easy to defend both side of this topic ,when tekkie jargon riddles your senses...
I have been in the F&B side of this business for 20 years, one thing I've found is - There is NO industry standard for pricing wine...
I will try to answer some of your questions , in my humble opinion - Jason has some really intelligent views on this subject - thanks for holding down the fort while I took a day off....even your dist. brethren are joining the fray.
#1) different states have different taxing policies - in Fl I am taxed over $4 for every gallon of wine I purchase - off premise retailers are exempt from this excise tax, therefore pricing is skewed from the get go .. a retailer is made available bulk purchasing deals ( get two cases free on ten,etc.) that your typical restrateur never hears about. The games played by distributers are rediculous, for instance in fl., we have three major dist. ..they all have different pricing levels based on certain criteria ;(do you reperesent their liquor brands in your well?, how many of their wines do you pour by the glass versus the competing dist.? are you representing their "dump" wines??????)..if you do all the above , you may qualify for level 1 pricing.
The morale of the story - there is NO level playing field between rest. & retailer - the rest. is at a disadvantage EVERY time in EVERY state.
#2)supply & demand play an important role in wine pricing (and evertything) .How would you handle a $59 bordeaux that becomes extinct at the wholesale level & then surfaces on the auction curcuit for $140 six weeks later????? .....I like & subscribe to W.C.'s theory about buying wine in nice restaurants, besides any chef worth their weight would never suggest a humongous underaged blockbuster with food, they simply do not pair well with food. I suggest you stash the big boys , buy reidel crystal stemware ( I can tell you where) and either drink them at home or take them with you to your fav. restaurant...which brings me to #3.
#3 - so you want to bring your own wine to my restaurant??? why don't make some bologna sandwiches and pack a f@#&!@# picnic while your at it.....just kidding , read that in the Wall street journal last friday...a well known NY restrateur had those comments.
Restaurants generally don't object to patrons bringing in wine - definitely not regulars , but remember,there is protocol to follow. I've never charged a corkage fee for a first growth & i've never let sutter home white zin leave the bottle in my restaurant.
Anyway, it's getting very late...I will add to this topic in the coming week as time allows.....
- IVYCHEF - 03-08-1999 02:03 AM
Jason - the culinary cavalry is here I don't like the tone of this thread Hey, aren't I allowed to make a living? I don't believe I'm gouging anyone. I had my computer fixed recently...was charged $70 an hour!! THAT is gouging..a $6.00 glass of wine is a scrape in comparsion. If I paid myself $70 an hour, you would REALLY see some huge prices!! People: food, wine, employees, taxes, utilities, licenses, etc. aren't free; I gotta pay those things, so I can't charge you $2 over my cost on a bottle of wine or on a NY Strip Steak. You want the convenience of not having to plan, prep, cook, clean and have someone wait on you, hey, pay the price. If it isn't worth it to you 1. go somewhere cheaper or 2. stay home. How much do you want to pay for a $10 retail wine? $12?, $14? That's ripping me off. So, what do you people do for a living? Let us restaurant people take a shot at your mark-ups
I'm a chef, but I have control over the wine list since most of the management has no clue. My prices are very friendly and the distributors even suggest I raise them. I have wine suggestions with each of the nightly specials posted. I train my staff to suggest/sell the customer $$ friendly wines. I'm happy to sell a lot of wine at a reasonable price. Lots of sales pay the bills. I have some "nice" wines, but sell few and they are far from overpriced; in fact they are barely above retail. I have served better wines by the glass, but its always a gamble. We sold 1995 Chimney Rock Cab at $7.00 per. I get 4.5 glasses out of a bottle which means I made about $13 GROSS; barely pays to wash the glasses. We sold four bottle BTG over a weekend. Pretty poor results We've done a few tasting dinners but I don't think it overly changed our customers' wine drinking patterns.
Riedel stemware: I have some vinums. Not springing for sommeliers. One costs more than 95% of the bottle prices of wines on my list. If someone comes into the bar and orders a "house merlot" (which is Forest Glen)and doesn't even bother to ask what brand we are pouring, do you think I'm pouring it into a vinum? No! If they don't care about what they are drinking, do you think they care about the glass? Hey, order the Chimney Rock Cab at $38 and I'll break (bad choice of words) out the vinums. (BTW, CR Cab sells for $28 retail here..did WC say two times retail??)
I'm sorry if I seem overly defensive - I've been in the biz over 20 years. I've seen the gouging and have been gouged. But this is my livelihood, and I just take what I do seriously. I try to provide a great experience at a reasonable price and bust my butt doing it. You won't find me on the golf course, on TV, taking the night off to watch the last George Clooney's episode on ER, etc. I'm there, I'm doing it and I'm proud of it. WC - if they are charging you a buck for your iced tea, they are making +/- $.80. Hey, gang, apply THAT mark-up to wine..then you can complain!
- Jerry D Mead - 03-08-1999 03:12 AM
Kevin...If you are selling a $28 retail wine for $38, your approximate cost should be just under $19...which means you're doing twice wholesale...not twice retail...and I would never call you a gouger for that pricing policy.
And that Forest Glen you're pouring as house wine is a good $10 retail beverage. That means your base cost is $6.50 per bottle...but I'll bet you're not selling that for the same mark-up, or $13 per bottle. Nor should you.
I have always advocated higher mark-ups on the low end...lower mark-ups on the high end. Because as I said...it's dollars you put in the bank.
And I'll bet you don't mark up the lobster as much as you mark up the chicken, either.
Thing is...I don't think we disagree that much. I don't like price gouging, but you don't appear to be guilty...and I'll bet you holler as loud as anyone when you visit a competitor and see them selling that Chimney Rock for $56 or $60 when you're selling it for $38.
- Jason - 03-08-1999 07:47 AM
Well OK now, there we go.Its not a spectator sport - you gotta get in the game.
As far as staff training goes, a lot of places really work at it. Almost anybody with a decent wine list is costantly brainstorming how to more people to enjoy wine. Hence all the "flights" we are seeing. As a distributor, a major part of my job is staff training. I average 2-3 per week.It doesn't do me any good to sell to the house if we can't get flow through from the staff.
Most staffs are very receptive as they realize its good for the guest and everyone else. So yes, we are out there making it happen.
- Thomas - 03-08-1999 09:55 AM
Jason, Kevin and all,
Seems we got this subject going.
Perhaps there is a larger problem that restaurateurs cannot deal with at all -- advertising and promotion. The wine industry (distributors included) does a miserable job at promoting or advertising wine to the general population. Hopefully, Gillespie's program getting started in Albany, NY and Houston, will prove effective.
Restaurants can do what they can do, and it is true that selling wine in the restaurant, one by one, is difficult. But I maintain that unless restaurants make wine accessible through pricing (perhaps on the same level as the dinner it matches) reluctance to buy will persist.
I have a friend whose wine list has won consecutive Spectator awards. But he complains constantly that he hasn't enough room in his cellar for the inventory (he triples wholesale in his pricing). I keep telling him that the reason his cellar is stocked is becasue he isn't moving enough wine, and the reason for that is his pricing. he replies that he must get the price in order to make a profit, to which I say, "you aren't making a profit if the wine is in the cellar." And the circle goes round and round.
- Thomas - 03-08-1999 09:57 AM
Sorry. My friend triples retail.
- n144mann - 03-08-1999 09:59 AM
Ahhh now we got some action!! Guys I am not saying I don't want you to make a living, and I am not saying that I am not willing to pay for the convenience, but I do want quality wines at fair prices and it seems that those of you here are doing a good job. (as for the distributors, I am fighting with one now because he won't get me the port I want) I am puzzled why our restaurants in this area of MN do not do a better job. We are not a community without money and there is a large international factor here that IBM and esp. the Mayo Clinic draws in. And yet our restaurants serve few wines other than Cal. and low end ones at that, for high prices. Maybe the docs here are willing and able to pay for this, and don't complain, but us poor PhD's can't afford that. Any suggestions from restaurant guys how to approach the subject with some of my fav. restaurants' owners/managers??? (on the issue of increasing the variety/quality I mean. I am not a confrontational person, don't think I would take on pricing, at least not right away) As for the corkage issue, I personally have not done it, bring my own bottle that is...seems kinda tacky to me. The only time I can really see myself do it would be on a special occasion when a bottle might have some sentimental significance. As for advertising, don't think I have seen a single ad from one of our nicer restaurants trying to bring people in for their wine list. I want to move!
[This message has been edited by n144mann (edited 03-08-99).]
[This message has been edited by n144mann (edited 03-08-99).]
- IVYCHEF - 03-08-1999 11:18 AM
Jerry - very insightful. Actually, $7.50 for the Forest Glen - maybe I'm being gouged (and makes me wonder how the local grocery store had it on sale two weeks ago for $6.99) and sell it for $4.25 per glass and $17 for the bottle. And yes, the Chimney Rock comes in at $19.00.
My pricing structure is this: On the more popular wines, Cab/Meritage, Merlot, Chard, I have a 3-2-1- system: 3 value, 2 mid and 1 upper. Other categories, (Sauv blanc, zin)I usually do 2-1-1 and some like CdP or Syrah (hasn't caught on here yet)I just carry two different, one each in the low-mid and mid-high range. Plus the odd bottle of Viongier and Nebbiolo, etc. The value price wines I add about $8-12 to my cost and try to keep it under $20 with a good price spread. My mids are $20-35 (and I throw the previously mentioned CR in this category) and I make $15-20 per. The top end stuff (the Drouhin Corton Charlemagne, DP, '94 Pichon Lalande) I sell for a bit over (normal, not gouge) retail, though I don't sell very much. All in all there are 20 whites, 22 reds, 5 sparklers and 3 dessert. And, of course, there are a few unlisted items that are around when someone wants something really special.
Yeah, I'd be cranky at $50 CR, but I might order it depending on the stiuation (even though a case sits in my own cellar)..but not as a Wed. night wine, but maybe for a date on the weekend (oh, wait, that never happens...I'm working!) I dumped $52 for 1992 Ridge Lytton Zin last year in said situation..but the wine made the night as it was better than the meal, so IMHO it was worth it. (Said list had '87 Opus for $195, I 'bout died. Thought about haggling with the manager for fun...)
I don't carry lobster just for that reason - even with a paltry mark-up, its more than most are willing to spring for, especially during the week. I keep a few tails in the freeze for a couple of regulars, but its not on the menu. I don't make my usual food cost percent or profit margin on each 8 oz. Certified Angus Beef filet mignon I sell, but I believe that if you want a 8 oz. filet, you pay for it even if the price is high. I don't expect the other customers to subsidize your dinner by jacking up the prices on other entrees. Yes, I do take a little more profit on pasta, (except for the one with shrimp and prosciutto) and pork, but I'd be stupid not to...but I don't feel I'm gouging anyone.
I used to do a four course dinner with four pre-selected wines to match the courses. I quit. It just didn't sell and when it did, we had too many requests to replace the accompaning wines with something else. (I don't like sauvignon blanc)
Yes, I do think we are seeing the same on most issues , I know that there are people on both sides of the issue: those who think we are gouging and those who are. I won't make excuses for the gougers, but it depends on what your version of gouging is. I was in SF in late '94. Stars was pouring 1990 Opus from mag at $15 per glass. Actually, I thought it was halfway reasonable, considering how overprice everything else is there. But others might find that exorbitant. Just trying to say that people should find a place that suits their needs and support it.
- n144mann - 03-08-1999 12:31 PM
My complaint is not necessarily the price as long as the quality is there. And I am more frustrated with my specific case than the industry in general, although I have seen some rediculous pricing in tourist areas. I am being offered wines that EVERYONE will recognize the label on, regardless of the quality of what is inside the bottle. I wish the manager would take a little time to look for wines of better quality in the same price range and then teach his staff to introduce them to the public. Once they(the clientele) were familiar with the labels, and realized that the wines were superior, I think they would order them. You guys in the business would know if this would work or not right?? How adventuresome is you average client when it comes to wine?? Will they move out of their comfort zone on the recommend of restaurant staff?? I am not in the business as you can tell, and I am sure there are a whole host of things that I am overlooking, but is my request unreasonable???
[This message has been edited by n144mann (edited 03-08-99).]
- RickBin389 - 03-08-1999 01:05 PM
it seems you really want to support a certain restaurant in your area.....the owner/manager should be impressed by your loyalty - I suggest when placing your next reservation , tell the person you would like a visit to your table by the person in charge of the wine program ( this in NOT unreasonable - anyone excited about wine should jump at the chance to meet a like minded individual). When you visit the restaurant , tell this individual what you have been telling us on this board - you make legitimate points.....We restraurant pro's can't get arrogant to the point of becoming deaf to our best customers - we need you. Have your thoughts prepared & tell them how much you enjoy the food, ambiance, etc... you may even find yourself being invited to unadvertised wine tasting events held at this particular establishment..... The pricing issue can & will be debated forever. Having an unbiased level headed regular customer express legitimate concerns is great therapy for ANY successful rest. owner. Give it a shot Nancy, I bet the rewards will suprise you.
- RickBin389 - 03-08-1999 01:06 PM
How about our trans- atlantic friends???? what are you doing in Europe about this issue??????