There’s a popular joke that illustrates one of the wine buyer’s dilemmas.
A Wall Street executive returns to his luxury apartment after a long day. His college-age daughter greets him with this announcement: “Daddy, I made $5,000 dollars for us today.” The executive is stunned as his daughter has never worked a day in her life. In disbelief he asks, “How did you do that?” She replies, “Oh, I went shopping at Bloomingdale’s and everything was 50% off.” Sometimes, wine buying logic may appear to work the same way.
Most restaurant owners work long days like the executive. Yet, too often restaurateurs don’t understand the best way to take advantage of the wine buying and selling process and end up giving away some hard-earned dollars. They sweat over building a wine list when they open their business and simply reorder whenever items run out or cash flow permits. Not very creative, or fiscally sound. There’s a better way.
We’ve established that it’s never a good idea for a restaurateur to turn his or her wine list over to one or two distributors. (See Cheers, June, 2000.) It’s also a bad idea to let your list become stagnant. Compare your wine list to your food menu. Restaurants run food specials for a number of reasons, sometimes because the chef found certain ingredients at a reduced price. Wine specials can be managed the same way.
For instance, throughout the spring and summer new vintages from America’s West Coast wineries along with French and Italian producers arrive in distributor’s warehouses. If the distributors have not sold the previous year’s inventory it potentially creates a number of problems for them: cash is tied up with the unsold wines from last year, storage space becomes tight, and stocking two vintages may cause multiple errors in invoicing and shipping.
The distributor’s problems become the smart restaurateur’s buying opportunity. Make it a part of your regular business to call all the distributors in your market every two or three months to find out if they have any wines they want—or need—to discount.
Recently, I spoke with a distributor in New Jersey who represents a well-known Washington State winery. The distributor had contracted to receive 600 cases in the spring. But he still had in-stock 350 unsold cases from last year. Suddenly, last year’s $11 wholesale chardonnay dropped to $6.50.
I ordered 20 cases to be shipped in five case drops every 10 days. The $4.50 per bottle discount meant that, like the executive’s daughter, we “earned” $54 a case or $1,080 ($54 X 20 cases) from making one telephone call. The bargain wine joined the list as a wine special, much like a food special. It added money by cutting costs, and created something new for our service staff to sell and regular customers to enjoy.
Saving by Spending
Another point about buying wines in bulk is you don’t need to pay all at once. Give the distributor an order for multiple cases with a delivery schedule. This potentially creates an easier financing technique for you by allowing you time to sell part or all of each delivery before taking the next one. And it locks in the discounted price while assuring the distributor that you’ll take the full lot.
Another good time to talk to distributors is after they have accepted wines sold on the basis of future delivery. For instance, I often found acceptable wines available at discounted prices from distributors that had been ordered by a restaurant, club, or wine shop only to be refused at delivery. In the early 1990s, an Italian wine importer brought in 1,000 cases of Gavi di Gavi for a country club, customized with the club’s label on the bottle. Unfortunately, for the distributor, the country club had a change of directors and the new board refused to accept the wine.
The distributor couldn’t sell it to any other club or a retail shop because of the private label on the bottle. The only solution was to take a substantial price reduction and sell it to restaurants to pour off by the glass. We bought 30 cases of the wine at $3 per bottle; it otherwise sold for about $12 per bottle. At $36 a case, we took the wine in 10 case drops—one delivery every two weeks. Our “earnings” from this purchase was $9 per bottle, $108 a case, for a total of $3,240 dollars. Not a bad morning’s work.
On another occasion, a distributor that specializes in Bordeaux had a few cases of wines from classified chateau that were ordered by a retail shop that subsequently went out of business. I found this out by asking the wine manager a simple question: “Did everybody take their wines ordered on futures?” When I was told that a case of Chateau Haut-Brion was available at the original price, I didn’t hesitate. I paid $1,600 dollars; the market price had risen to $2,700. I “made” $1,100 for asking a question. Three years later I put it on the wine list at the market price.
Season of the Deal
Creative wine lists and menus share another feature: seasonality. Good chefs and successful restaurateurs like to let their diners know that their food is related to the weather—even if the patrons aren’t completely aware of it.
In hot weather the menus feature cool salads, chilled soups, fruit desserts. They avoid stews, game meats, and rich pastry. Wine lists generally work on the same principle, and this presents another buying opportunity.
Fresh meat, fish, and produce have to be sold quickly; well-made wines, properly stored, hold for years. This means that in the summer restaurateurs should be speaking to their distributors about buying the bigger, fuller red wines they want to have on their wine list in the cooler months. Distributors are happy to negotiate prices for these wines in months where most restaurants are clamoring for white wines, rosés, and light-bodied red wines. It is much more difficult to bargain for discounts on Barolos, Amarones, Bordeaux, cabernet sauvignons, Rhone wines, Australian shiraz, and Port in the fall and winter.
Using the calendar to your advantage also makes sense for white wines and champagne. In fact, smart wine management suggests you try whenever possible to purchase wines against the popular tide. It is much easier to strike a deal on champagne in August and September than it is during the holiday period between Thanksgiving and New Year’s Eve, and just before Valentine’s Day.
During my 25 years in the restaurant business, I discovered another source for buying opportunities: winery representatives who are showing their newest “packaging.”
American wineries must spend more time and money redesigning bottles and labels than any other wine-producing region or country. It seems endless. Yet, every time a winery changes the face of the bottle, it means that all the other wines made by that winery now appear obsolete.
While the winery presents the redesign a great idea and new marketing technique, retail shops often hate it. They don’t want a chardonnay, cabernet, or any other wine from the winery sitting on the shelf with one label next to the new vintage of the same varietal from the same winery with a different label or package. It confuses the retail customer. So, what’s a distributor to do with the old-label wines?
Generally, the winery will give the distributor a credit on the remaining wine so it can be discounted. In steps the smart restaurateur.
Dining room customers don’t compare labels, generally, and see only a written wine list. When they order a wine, the service staff brings the bottle they’ve ordered; the packaging is irrelevant. Whenever restaurateurs hear that a winery representative is showing a new package, their first question should be “What are you doing with wines with the old labels?”
Smart restaurateurs can find as many buying opportunities as a young shopper in Bloomingdale’s. The trick is to understand the timing, take advantage of the season, and try to get 50-percent off.