“The high-end wines are suffering greatly,” says Emily Wines, M.S., director of wines for San Francisco-based hotel and restaurant property Kimpton Restaurants and Fifth Floor Restaurant & Lounge, its stylish dining spot there. “People are certainly celebrating and buying those wines, but not as frequently.”
Operators still are managing to unload some of their higher-ticket inventory. They’re just having to work harder and be more creative. They’re doing things like reducing wine markups, hosting celebrity winemaker events, promoting lower-priced lounge menus and wine lists and even discounting their pricey wares—not that they dare openly utter the “d” word.
In August, both to combat a typically slow month and to celebrate its 10th anniversary, Fifth Floor took half off the price of any bottle on its opulent, 1,200 selection wine list, including prized French Burgundies priced in the four digits. “We sold a Joseph Drouhin Volnay 1964 priced on list for $850, reduced to $425, that was drinking great,” says Wines. Add to that a venerable Bordeaux, Château Gruaud-Larose 1928, full list price $3,200, that sold for $1,600—“We were excited to see that move along as well,” says Wines. It was a sweet deal for recession-wracked guests with a taste for finer things.
“It has been unbelievably successful,” says Wines. “People who normally would not spend that much money on wine are taking advantage of the opportunity to have something at a really extraordinary price.” According to Wines, prior to the economic doldrums, wine and food accounted for roughly equal proportions of total sales at Fifth Floor. But in recent months, wine sales diminished to around 35 to 40 percent of total sales. Since the promotion, wine sales ramped up to roughly 60 percent of total sales while bringing in many more customers than one would expect in a typically slow August.
“It gave us a huge influx of guests—I think it doubled our covers,” says Wines. “Where would we have been in August if we didn’t have that going on?” According to Wines, the unusual extremes of price make it difficult to talk about average consumer spending during the sale. “On one hand, we had people coming in who wanted that $40 bottle of wine for $20, and on the other hand, people coming in to get a $3,000 bottle for $1,500,” she said. She said that Fifth Floor’s “sweet spot,” or average bottle price, which had been running around $150 before the recession, is roughly $85 to $90 these days.
It’s a quirk of human nature that a hefty discount somehow turns an untouchable wine into an irresistible one. Like the night a guest bought two bottles of 2001 Montrachet de la Romanée-Conti, priced at $2,700 on the list. “Unbelievable,” says Wines. “Normally, someone would not order a $1,350 bottle of wine, let alone two of them, but when it’s that good a price, how can you pass it up?”
Even the exclusive resort properties such as the 69-room Hotel Hana-Maui and Honua Spa in Hana, Hawaii, in exotic seclusion where the rainforest meets the ocean in east Maui, are feeling the economic malaise. Like properties on the mainland, this tranquil retreat for the privileged has taken significant hits in occupancy and sales this year, reports director of food and beverage Keith Mallini. Hotel Hana-Maui’s occupancy is down 25 to 30 percent this year compared with a year prior, he says, and he’s been adjusting wine prices since he assumed his position at the property last year. “We adjusted the pricing on a sliding scale so that higher-end wines look like more of a value,” says Mallini. “The lower-end wines have gone up a bit in some cases, and all of our higher-end wines have gone down. If a bottle costs me more than $50, it probably has a two-time markup. Before I arrived, everything across the board had a three-time markup.”
“Our clientele is well traveled and dines well,” adds Mallini. “But they just haven’t been spending as much on food and wine lately.” Although select Champagne labels like Roederer Cristal and Dom Pérignon still move, he says much of the business has moved to lower-priced—for this place, anyway—wines by the glass. At Ka’uiki, the hotel’s premier restaurant, Louis Roederer Cristal 2000 is priced at $393 and Moët & Chandon Dom Pérignon 1999 is priced at $235. Eight white wines are offered by the glass, the majority priced in the $12 to $14 range, topped by a $16 glass of Fiddlehead 2006 Happy Canyon Sauvignon Blanc from Santa Ynez, California. Three of the six reds by the glass are priced at $17 or more, the dearest being a $21 pour of Saintsbury 2006 Carneros Pinot Noir.
“People who are staying here for four nights may splurge on a big bottle at dinner one night, but the rest of the time they’ll choose a middle-of-the-range bottle,” Mallini says, explaining that most guests regularly choose bottles in the $100 to $180 price range.
To punch up his program, Mallini stages unique wine events with celebrated vintners and sought-after wines. For example, an event called “An Oregon Wine Invasion,” held in April, 2009, welcomed a host of Oregon winemakers from the Willamette Valley, including Josh Bergstrom of Bergstrom Wines, David Adelsheim of Adelsheim Vineyard and five other boutique winemakers, as part of a wine and food “treasure hunt.” Groups of guests followed a treasure map to find the vintners at pouring stations around the hotel grounds, sampling their wines paired with local foods. The hit event drew 100 guests at $80 per head.
In another example, Kathleen Heitz Myers, president of Napa Valley’s Heitz Cellar, visited Hana to pour seven wines. The highlight was a $150-per-person wine dinner for 28 guests that was headlined by a side-by-side tasting of the winery’s two Cabernet Sauvignons, 2001 Martha’s Vineyard and 2001 Trailside Vineyard.
A Fine Dining Rebound Ahead?
At Blue Ginger, a restaurant serving East-West fare in the Boston suburb of Wellesley, Mass., chef-owner Ming Tsai, has also seen his customers spend less on wine this year. But he’s staying upbeat, anticipating economic recovery and a rebound in fine dining business.
“We won’t ever get back to where we were [in fine dining] in the ’80s and ’90s—which is good, because that was excessive,” says Tsai. “But I think we’ll get back to 80 percent of where we were, which is still pretty darn good. I’ve already seen it start to come back.”
When patrons are ready to splurge, Blue Ginger’s 250-item wine list stands at the ready. Tsai says his high-end wines are generally priced significantly lower than they are at many other restaurants. “We hear our guest say quite often, ‘I’ve seen this same bottle of wine at one of the big steakhouse chains for $80 or $100 more,’” says Tsai. A few examples include Cain Concept 2005 Spring Mountain, priced at $185, Red Car Heaven and Earth 2007 Pinot Noir Sonoma Coast, priced at $142, and Caymus Vineyards 2006 Napa Valley Cabernet Sauvignon, priced at $115. “I’d rather make 50 bucks on the bottle and have people really enjoy it and maybe get a second one,” he says.
Life goes on, too, and so do celebrations. “If it’s your 50th birthday, you’re going to drop $300 on wine—you’re not going to turn 50 again,” says Tsai.
Another reason for Tsai’s optimism is that he doesn’t have to rely solely on big-ticket dining. In mid-2008, he opened a new 50-seat bar and lounge addition to Blue Ginger, doubling the seating and offering a more casual, lower-priced venue with wine by the glass and Asian street foods. It has increased customer frequency and drawn new faces to Blue Ginger. A favorite is the Mulderbosch 2008 Sauvignon Blanc from South Africa, priced at $42, says Tsai, and Mirrabooka Shiraz 2006 from South Australia, a full-bodied shiraz priced at $38.
La Folie, a French restaurant in San Francisco, has a similar casual adjunct, the new La Folie Lounge, which serves wine by the glass, cocktails, beer and a bar menu priced far below its regular dining room fare. “Before, clientele in their mid-30s would never come to La Folie, but the lounge is making them a lot more comfortable with it,” says chef and co-owner Roland Passot.
While the current economic situation remains challenging, all sorts of innovative operators are managing to sell high-end wines in a host of different ways. Many have kept promotional vehicles that have worked in the past, such as the wine dinner, while simultaneously trying something new.