It’s been a rough road for restaurateurs, even with the worst of the recession potentially in the rearview mirror. Wine sales have been so sluggish that it is often now hard to recall that U.S. wine sales saw an increase of 20 percent from 2004 to 2009, according to the Beverage Information Group, Cheers’ parent company, and most imports were down. Many of the top wine regions were off significantly: Champagne sales were down 9 percent and Burgundy saw its U.S. sales fall 33 percent. With historical French and Italian icons such as Bordeaux, Barolo and Brunello struggling to retain their markets, some people may have drawn the conclusion that imported wines are a bad bet in this economy.
But viewed more closely, it’s easy to spot that, whether imported or domestic, all expensive wines are struggling. Even mighty California wines lost market share last year. “Past a certain price point, significant sales action comes to a screeching halt,” says Madeline Triffon, M.S., wine director at Matt Prentice Restaurants, which operates 10 Detroit-area restaurants, as well as an artisan bakery. The best-known imported wines are often the expensive ones, such as Bordeaux and the like, but the vast majority of imported wines are affordable.” So do the numbers really mean that imported wines are threatened, or is it merely that expensive wines, imports included, are going begging?
A Select Few on Top
Some wine-producing countries have prospered in the new economy and enjoy sunny forecasts. Argentina is up 30 percent, Chile is up 17 percent and New Zealand is up 22 percent, according to each country’s respective export authority. Is it simply a reflection of lower prices? Not entirely—New Zealand reportedly enjoys the highest average bottle price of any industry in the world, according to the New Zealand Winegrowers’ Association.
Drew Hendricks, M.S., of the Houston-based, Pappas Brothers and Pappadeaux Seafood Kitchen, believes that “wines from countries perceived to be cutting edge or otherwise appealing have not suffered but grown—for example, Spain, Greece, Argentina and Portugal. They have capitalized on the fact that consumers always want something new and exciting from a sexy place.” The group has more than 100 restaurants in seven different states, and Hendricks heads up more than 40 of them for wine sales.
P.F. Chang’s Scottsdale-based beverage director Mary Melton agrees. “We have seen an increase in wines sales from Chile, Argentina and Germany,” she says. “Granted, we had a decrease in sales from Australia and Italy, but all in all, imports are doing really well for us.” The operation has more than150 locations.
Marian Jansen op de Haar, wine director for the Tampa-based, 64-location Flemings Steakhouse, not only asserts that she has been able to maintain sales of French and Italian wines. “I’ve added more imports this year than last year or the year before,” she says.
Almost all of the restaurateurs interviewed for this article hinted that the economic tumult is mirrored by great change in the marketplace—new brands, new regions, new grapes and, importantly, new pricing, including discounts. Changes have always been the norm in the wine business, but the last 18 months have offered some remarkable challenges and intriguing bargains to alert buyers.
Imports Suffer along with the Business
All of this is due in no small part to the Great Recession. Last year saw the full-service restaurant industry lost about 10 percent of its beverage alcohol sales, according to the Chicago-based market research firm Technomic, and approximately 21,000 restaurants shut their doors, representing almost 4 percent of the industry, 84 percent of which were full-service restaurants. With overall unemployment hovering near 10 percent, it’s no surprise that people are buying wines based upon price—or that expensive wines may lack for buyers.
And because of a weak dollar, imported wines have been pricier than they might otherwise be. Many a savvy operator has lost money betting on the exchange rate, but there seems to be some positive signs that the dollar might stabilize and even stiffen against some currencies.
Inventories of expensive wines have backed up, and distributors and importers have often severely dropped prices. Most of the independent restaurateurs interviewed noted that they had continued to buy imported wines simply because there are a lot of distributors with wines they can’t sell at normal prices. Buyers have to be fast and flexible to grab these opportunities, and some chain buyers have expressed less willingness to capture temporary discounts.
Those chain buyers aren’t being foolish or overly cautious. Many discounts are limited in quantity or limited to only a few markets. Frequent changes on the list bring along headaches of excess or forgotten inventories and confused and frustrated servers or management.
Training is Essential
Moving the less-familiar, higher-priced imports often takes a higher-level of staff training. In Kansas City, Trezomare Restaurant and Lounge wine director Joyce Angelos notes that, “Value trumps appellation. Imports still have my guests’ attention—but they look past Barolo, classified Burgundy and Bordeaux in favor of Sicilian Nero d’Avola, a nice little Mâcon, Côtes du Rhône, or something obscure from anywhere in Spain.”
Angelos spends a great deal of her time explaining those obscure wines to customers and servers; Trezomare and its sister restaurant, TrezoVino, have only recently brought Angelos and another wine manager on board in an effort to bring clarity and focus to an ever-changing wine program.
P.F. Chang’s Melton might not be able to train as vigorously as she would like, so her wine list is accessibly laid out in styles, rather than by grapes or countries. By offering Rioja next to merlot, and by grouping diverse wines under headings such as “floral wines” or “powerful, spicy and intense,” servers and customers alike can make rapid decisions about whether an unknown wine might appeal to their personal tastes.
At Boston area Legal Sea Foods, according to vice president of beverage operations Sandy Block, M.S., traditional grape categories are supplemented by more flexible categories such as “Shellfish Wines,” “Sandy’s Discoveries,” “Wines with Spicy Dishes” and “Red Wines with Fish,” allowing unknown wines to announce their purpose, and offering servers cues for their own personal sales pitches for each new wine.
Wine staff needs to be prepared to train more frequently than ever before because, while people are seeking bargains, they still want to be excited by their choices. The guest’s basic motivation for wine selection—to look smart and well-informed—now is accompanied by another important goal: to spend wisely. Triffon at Prentice Restaurants argues that, “We’re finding our guests fabulously receptive to wines they’ve never heard of, with the serious caveat that quality must be in the glass.” And Block argues that, “I’m finding a new openness to imported wines from ‘non-pedigreed’ areas if they’re about flavor and perceived value.”
Most guests are less interested in famous, iconic wines then they were before the present troubles. French exports of wine and spirits fell 17 percent last year, according to the Paris-based Federation of French Wine and Spirits Exporters. In what must seem the depths of indignity to the French, South Africa has overtaken France for wine sales in the U.K. France remains in first place for U.S. wine sales and at the upper end no country has yet emerged with the breadth of wine excellence of France: Champagne, Bordeaux, Burgundy, Loire Valley, northern and southern Rhône Valley each represent the pinnacle for certain styles and grapes.
With value as the goal, every wine-producing country has something to offer. “I do not see imported wines as challenged,” says Seasons 52 wine director George Miliotes, M.S. “There are excellent value wines made by producers all over the world.” The restaurant is part of Orlando-based Darden Restaurant Group.
France is likely to see its market share erode, as others supplant its inexpensive wines. The Argentines are stacking up the container vessels; so get ready for more malbec than the world has ever seen. The Spanish have even more wine on offer, and they’re smart enough to have more than one or two grapes from which to fashion their offerings. Each is eager to move into the space recently lost by the Australians, and each is keen not to make the same mistake of relying upon only one grape, shiraz, and allowing it to become nothing more than a commodity. The Aussies have grave challenges, but they seem to have gone from full breakdown to treatment and therapy. Their industry is preparing to rip up nearly one third of the acreage and, while their battles look like circular firing squads, no one should ever count them out.
“Imported wines face the same challenge that all wines face today, regardless of their provenance,” says Triffon. “They must over-deliver value in the best sense of the word.” New Zealand and Chile, among others, have already proven their value; South Africa, Eastern Europe, Greece and others are lining up to test their worth, too. Says Angelos, “today’s market is less about the wines’ origin and more about price point than ever before.”