Operators have become more innovative than ever before with creative wine promotions that feature value wines from different regions at solid price points. Although wine consumption faltered slightly over the last year—it dipped just one-tenth of a percent to a 0.8 percent increase in 2009 against the previous year according to Cheers’ parent company The Beverage Information Group—there’s a bright spot on the horizon. On-premise sales of domestic wine continue to outpace imports making up 74 percent of total consumption in 2009 as reported by Cheers’ On-Premise Barometer Handbook, a trend that is being driven by marked increases in quality, particularly at lower price points, as well as unique promotions that make it easy for guests to experiment, according to operators.
“Quality is the key,” confirms Andy Scoggins, vice president for culinary and beverages at Ruby Tuesday, a Maryville, TN.-based casual dining chain with more than 900 company-owned and franchised restaurants in 46 states and 14 countries around the world. “We didn’t set out to emphasize domestic wines, but the quality options we’re seeing from producers are creating better value across the board.” Ruby Tuesday offers 19 domestic wines and three imported wines by the glass and the bottle, priced from $4.29 to $11.99 for five- and eight-ounce glasses and $15 to $40 for bottles. Domestic chardonnay is the most popular wine currently offered by the glass.
Ruby Tuesday has also differentiated its wine list in several ways that appeal to its 25- to 45-year-old demographic of affluent business diners and families on the go. “Our approach is fairly simple; we use familiar domestic brands to anchor sections of the list that appeal to consumers who aren’t interested in experimenting and at the same time include new brands and varieties for those who are,” says Scoggins. Ruby Tuesday is also fairly unique among the larger, casual dining chains in offering guests one-ounce tastes for 50 cents as a way to experiment with very little risk before purchasing a five or eight-ounce glass. “The goal is to take away some of the fear associated with buying [lesser-known] wine.” Though the format is new for the chain, Scoggins indicates that it’s had a positive effect on wine sales, although he didn’t share specific numbers.
In addition to offering tastes, Ruby Tuesday prices wine across three categories: $5 to $7, $6 to $8 and $8 to $10. This approach has been successful in encouraging customers to trade up and Scoggins notes quality gains for domestic wines across all categories as a result. Through the tiered pricing, the chain also builds “confidence in the mid-range drinkers who are comfortable making the move to ultra-premium pours.” In choosing wines for the list, Scoggins and his team seek out brands that are not typically sold at retail. “By selecting on-premise brands, we’re not trying to compete with retail promotions.”
Selling the Familiar
At the Elephant Bar, a La Miranda, CA.-based casual dining chain with 47 locations in California and across the southern United States, Reinhard Dorfhuber, senior vice president of culinary concept and development direction, has seen a marginal uptick in year-to-date wine sales and notes little resistance to trading up by the chain’s clientele, which spans a broad demographic. To encourage greater spending on wine, Elephant Bar’s servers also use a suggestive selling method that works with the chain’s relaxed style and creates a high level of comfort for guests.
While the Elephant Bar’s list emphasizes varietal domestic wines and highly recognized brands, Dorfhuber recently introduced a new category of domestic blends that includes Ménage à Trois, a red California blend that he says over-delivers in the glass. “Given current economic conditions, grapes that normally would be used to make more expensive wines are being redirected into value-priced wines and raising overall quality,” he says.
Wine service styles now play a more significant role in conveying increased value, and from tastes to carafes operators are looking for the perfect fit for their clientele. Wine-by-the-glass at Elephant Bar ranges from $5.95 to $10.95 and is served in a one-third bottle (8.25-ounce) individual carafe, in addition to being menued by the bottle. “We’re offering good value and projecting a warm welcome with an attentive, friendly and interactive style of service to achieve a meaningful connection with our guests,” says Dorfhuber, who lists wines in varietal categories from light to rich intensity to help guide customers in making successful food and wine pairing choices.
His approach to pairing is to “match the intensity of the dish with the intensity of the wine.” Given the Elephant Bar’s emphasis on Asian-inspired cuisine, Dorfhuber lists a few imports including a German Riesling, Italian Pinot Grigio and an Australian Shiraz. He also runs a quarterly promotion that features two different wines by the glass to encourage experimentation, but does not discount the promotion or offer tastes. “Our best-performing whites are Kendall-Jackson Vintner’s Reserve Chardonnay ($8.75) and Chateau Ste. Michelle Riesling ($7.25),” he says, “along with domestic pinot noir and cabernet sauvignon for the reds.”
Private-label domestic wine programs like the one in place at The Cheesecake Factory Inc., a Calabasas Hills, CA.-based, upscale casual dining chain with close to 150 locations nationally, are another way for operators to pass along value to customers and drive sales of domestic wine.
“We want [customers] to feel the same way about our wine list as they do about our food and our menu,” says Heather Berry, the chain’s director of beverage and bakery operations. The company offers chardonnay, merlot and cabernet sauvignon produced by Robert Mondavi as its Cheesecake Factory-branded wine lines. Their by-the-glass program features a 6.5-ounce pour ranging in price from $7 to $13 and restaurants typically list 20 wines with an emphasis on widely recognized domestic brands such as Kendall-Jackson, St. Supery and Domaine Chandon. Berry recently added 11 new wines to her lists, nine of which are domestic and vary by region and restaurant location, and is piloting half glasses and a 15-ounce carafe in test markets. She focuses on a high level of training and frequent tastings for the staff to drive sales of lesser-known brands and varieties.
“Our clientele is fairly savvy about wine and they are drinking more,” she says. With pinot grigio and riesling topping the list as the fastest-growing domestic grape varieties at 23.8 and 13.9 percent respectively over the last five years—as reported by Cheers’ On-Premise Barometer Handbook—it’s easy to see why Berry menus Estancia’s popular pinot grigio along with an Italian import and two rieslings, Chateau Ste. Michelle and a German import to capture sales. In the future, she plans to incorporate more local wines and to experiment with branding to encourage more experimentation.
While domestic wine sales for the nation’s top-performing casual dining chains rely largely on familiar brands and value-added service styles that include offering smaller portion sizes, like one-ounce tastes and five-ounce glasses, to encourage experimentation and larger pours served from individual carafes like those at the Elephant Bar, the category can be a moving target for single-unit operators.
Start with the Known
Familiarity with a wine list allows on-premise customers to feel comfortable experimenting. “Domestic wines make up 70 percent of our inventory and we use wines with name recognition like Opus One, Duckhorn, Lionetti, Silver Oak and La Crema to anchor categories and then place wines around them that are similar in style,” says Jason Harris, general manager for BOKA—which stands “bold original kitchen artistry”—Kitchen + Bar in Seattle, winner of the 2010 Cheers Benchmark Award for Best Wine Bar. The 130-seat restaurant is attached to Hotel 1000, a 120-room boutique hotel in downtown Seattle.
“To succeed, you have to be flexible and stay dialed into the current economy and to your clientele,” he says. When Harris joined the operation, he streamlined the restaurant’s eclectic 200-wine bottle list and now offers 70 wines as solely by-the-glass pours, priced from $7 to $70, he says. When customers ask for recommendations, Harris’ staff can confidently up sell lesser-known domestic brands knowing they will be similar in style.
With the list is structured progressively by taste profile and from lighter to fuller bodied on an easy-to-use menu panel, Harris finds that guests branch out naturally when a server recommends a wine that is similar to what they already know. “We have a high percentage of repeat guests and it gives them an opportunity to experience something new.” With such as wide range of wines by the glass at his disposal, Harris creates flights and offers three-ounce tastes to accompany BOKA’s $45 five-course chef’s tasting menu for an additional $20.
“We’re making a decent margin on lower-end wines, which helps offset the cost of pouring a brand like Far Niente by the glass.” Harris also likes to keep margins on ultra-premium pours in check as an incentive for his repeat clientele, his top-selling wine is Cakebread Chardonnay priced at $15 a glass and he frequently sees guests trading up from $6 “Happy Hour” specially priced red and white wines to ultra-premium pours. He typically pours wines that are being removed from the list or slow-moving inventory during happy hour, though in August he worked with Trinchero on a promotion and poured their Seaglass Sauvignon Blanc and The Show Malbec. He also promotes BOKA’s wine program using Twitter and Facebook, but finds that over the last couple of months a sidewalk chalkboard listing daily specials and word of mouth has been effective in keeping a steady stream of foot traffic and more repeat business coming in the door.
While tactics that encourage more customer experimentation, particularly those that help fine tune service styles and convey or add value to programs, are among the key drivers for domestic wine sales for these operators, comfort continues to play an important role in every program. From The Cheesecake Factory’s wines that trade on trust and customer brand loyalty, Ruby Tuesday’s emphasis on using well-known brands to anchor its more innovative list and Elephant Bar’s relaxed approach to sales, operators increasingly recognize the value in making wine, particularly a familiar domestic one, a comfortable experience.