Heard about the fuss-pot dining in a lovely restaurant? He looks at the wine list and then with a snarl demands to see the proprietor. The owner trots over, terribly concerned. “This bottle of wine that’s $27 on your list is just $9 at the store down the block,” the customer belly-aches. The owner sneers. He removes the china, silverware, good stemware, strips the table of the linen cloth and the napkin and then slams the aggrieved bottle on the table. “Sir,” he says, “now you have a $9 bottle of wine.”
Your wines must meet many objectives. One is to make the potential wine drinking customer salivate over the fantastic wines listed. Another objective, arguably as important, is to cover hidden restaurant costs like the broken crystal and the cleaning of linen. However, as expensive as a list might appear to be, there re ways to make certain that customers perceive the pricing to be fair.
PROPER MARGINS AND PRICING
Some restaurants are infamous for wines with mortgage-like prices but Jayme Moffi, beverage manager from Boston’s Aquitaine Bar a Vin Bistrot, says one of the worst reputations you can get is as a price gouger, and she’s hard on those places who reach the top of the mark-up list.
“Charging over three times retail is obscene. You can morally almost get away with two and a half times, but twice retail is best. We’re not here to take people. But there are hidden costs and we need the mark-up on our wines.”
Aquitaine’s list parallels its modern French food with a mostly French list encompassing all the country’s regions and a range of price points. To help encourage the perceived customer value, Moffi looks for help not from the bully priced Bourdeaux and Bourgogne, but by stocking wines from lesser-known areas. “I like to find those little gems and it’s good for pricing. Our prices range from $28 to $300 a bottle. By the glass is from $6.50 10.”
In Livermore, CA, the Wente Winery operates a lovely dining establishment, from where Steven King, wine program director, says, “We have a broad list of domestic wines. Of course, we try to make the Wente wines a good value for obvious reasons. As far as other wines, we’re about triple wholesale or double retail.”
“When a wine gets a great write up, we see an increase in sales. It could have been on the list unnoticed for years but as soon as (magazines) write it up, the wine flies out the door. I’m absolutely against taking advantage of the new popularity and charging the customer more when my price hasn’t gone up. When a wine isn’t such a hot ticket, like California Rhone styles, we run tighter margins. For wines by-the-glass, we divide by four on the bottle price. “
These days poor California has an aditional problem that might drive up prices; the cost of electricity. In Monterey, Andrea Fulton, cellar master of the Sardine Factory, says, “With the current energy crisis in California creating sky-rocketing electricity bills, we can’t keep on raising the price of food, so wine prices have to inch up. However, there’s a lesson in that story about the $27 dollar bottle of wine that’s $9 retail. The guy was a fool to have a wine listed so common it’s at the local wine store piled up in boxes. Wine lists should be special treats for your customer, not selections that are commonplace. In other words, keep supermarket brands off the list. You must be a wine destination like we can always get something fun or great there. You must give your customer a bang for their buck.”
Madeline Triffon presides over the wine at the Unique Restaurant Group’s Michigan locations, and she says even though the restaurants range from casual mid-price to pricey destination, she finds some commonalties with her pricing.
“I have the bread and butter glasses at $5 $7. These are usually a quarter the bottle price–at about three times wholesale. When pricing premium pours, you need a different strategy. On anything that is more than $30 a bottle, we add dollars instead of a percentage. Sometimes we even do retail. I’m not adverse to marking up aggressively but it must always be perceived as a value and no one should get sticker shock.”
Price points, not prices, sell at NYC’s B.R. Guest restaurant group, and Cindy Renzi is at the beverage helm. The best selling wines by the glass are smack in the middle of the $5.50 $15 range. “It seems that the low $40’s is a favorite price point for a bottle. Our lowest is priced at $23 and our reserve list goes to $250. Caymus Conundrum, about $60 on the reserve list, is a big seller.” Echoing a common theme, Renzi says, “Something can be marked up three times from our cost If we try to move something more expensive, we don’t take as much of a markup. I try to match the pricing to the food. If I’ve got any advice, it’s to offer tastes to your customers you won’t lose a glass because someone doesn’t like it.”
When looking for wines to add to the list at B.R. Guest’s units, like Ruby Foo’s, Atlantic Grill, Ocean Grill and others, Renzi likes to taste them before knowing the prices “to see how much I’d want to pay. That way I can find one that tastes more expensive than it costs, make our percentages on it, and give the guest a good value. We also buy in as large a quantity as we can to pass along a greater saving, particularly in by-the-glass programs.”
Remember the list that progresses from the cheapest to the most expensive? If that’s what you offer, it may be time for a revamp; It’s definitely out of style. Most restaurants with successful programs are now mixing up the prices so the diner actually reads the list rather than scanning wines in a particular price point. Renzi shares this point of view, with a twist. “We don’t organize wines by price point. We do it by style light, fullest and body. This causes similar varietals to fall together, the prices get all jumbled up and people have to look at the wines.”
THE PRICE MUST BE RIGHT
Ned Benedict of New York’s exclusive restaurant Aureole starts prices off at $30 a bottle and goes to the thousands and though his most popular price point is $95, everything sells, even the least expensive. However he has a $6.50 glass of Corbieres on the list, that isn’t going anywhere. “It’s the region,” he says, “if it was a $6.50 from the Rhone or from Provence it would probably do just fine.”
The cheapest wine on the list doesn’t sell: This situation is frequently true in categories like the Burgundy section at Aquitaine. Moffi says, “I’ve got a $28 Burgundy that is terrific but only sells ok, the next cheapest is the $34 bottle and it sells like hot cakes.”
For some reason, people assume that they can get a better value in regions like Burgundy for a few more dollars. While this might not be so, make sure your wine and wait staff have a good handle on the flavor profile of the most inexpensive wines. And if the wines still aren’t moving, yank it off the list and pour it by the glass. Renzi says “I’m not an advocate of raising prices to sell a wine. I’ll move it some other way.”
Some folks recommned raising the price if a wine isn’t selling. Triffon says she’s seen this to be true, in fact, she might have even tried it herself. If a wine isn’t moving over at Wente’s, though, Steven King doesn’t raise prices he lowers them! But as Wente’s is considered a dining destination and the customers more likely to be there for a special occasion or business people from Silicon valley looking to impress their clients, the best selling wines are more expensive. “After our Wente wines, Silver Oak Cabernet is by far the best selling. No matter what I mark it up, it sells.” Ned Benedict has the same situation with Kistler Chardonnay.
On the other hand, lesser known wines can benefit from help. At B.R. Guest restaurants, Renzi listed a terrific wine from the Languedoc called Cirrus a blend of five different grapes. “At Park Avalon, we moved it by the glass–had waiters offer tastes and we blew through all the cases in a week.”
A terrific wine list that instills confidence is the best solution to pricing. You might even have the happy situation that exists at NYC’s Jean Georges. First of all, they do the impossible and sell lots of champagne by the glass. What’s more, their best selling champagne ($15) is the least expensive. Kurt Eckert, Jean Georges’ wine director, makes sure it’s an obscure one (Aubry) to wean his customer off brand loyalty.
RARE AND PRECIOUS
Pricing allocated wines is another delicate situation. Many wine directors are concerned about how to price wines fairly when you’re allowed perhaps as few as three cases for an entire year. Fulton of the Sardine Factory doesn’t worry so much about the price as she does whether a wine is ready or not to drink. So she might either mark up the wines, projecting their worth in five years down the road and price them accordingly, or instead cellar them. “Right now I’m working on a vertical of Silver Oak. When the 1997 is released in the summer, I’ll have a consecutive line-up from 1993. I intend to call the winery to find out what they’re selling their library selections for. If I buy wines at auction, I’ll use that price as retail and add dollars, not a percentage. You can’t expect to make the same percentage on more expensive bottles. But remember, you’re making more dollars on it. You take consistent profit margin on the cheaper stuff.”
Ned Benedict’s magic bottle price point is $95. So obviously, he could get away with overcharging on his list, but he doesn’t. He buys a lot of inventory at auction. He recently bought a case of ’97 Bryant Family Cabernet for $11,000 but still kept the wines he already had in inventory on the list at $500. The increase will come later. This keeps customer loyalty and indeed, Aureole is packed with plenty of wine drinking diners every night.
“I don’t have a policy on pricing. It depends on what it is and how it fits on the list. The secondary market pricing dictates it. If there’s something I really like that is not known, but I’m interested in having it on the list, I’ll price it at a better value.”