General

Restaurant Wine Prices

For many years restaurant diners have faced the dilemma of enjoying premium wines with their meals and paying large mark-ups for wines that can be purchased for a third of the price in wine shops and liquor stores. Concepts like corkage fees, wines by the glass programs, and “restaurant exclusive wines” have sprung from a guest’s reluctance to fork over large sums of money for pedestrian Cabernet Sauvignon and uninspired bottlings of chardonnay. Intrepid wine enthusiasts turn multiple shades of green when discovering their favorite Barolo is $90 on a wine list when they just saw it for $44.95 at the local liquor store. How dare these charlatans pilfer from poor unsuspecting diners? Restaurant owners and operators are well aware of the negative perception of diners toward wine list pricing strategies. Here are some reasonable justifications for their strategies.
Posted 13th August 2009        
     

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For many years restaurant diners have faced the dilemma of enjoying premium wines with their meals and paying large mark-ups for wines that can be purchased for a third of the price in wine shops and liquor stores. Concepts like corkage fees, wines by the glass programs, and “restaurant exclusive wines” have sprung from a guest’s reluctance to fork over large sums of money for pedestrian Cabernet Sauvignon and uninspired bottlings of chardonnay. Intrepid wine enthusiasts turn multiple shades of green when discovering their favorite Barolo is $90 on a wine list when they just saw it for $44.95 at the local liquor store. How dare these charlatans pilfer from poor unsuspecting diners?

Restaurant owners and operators are well aware of the negative perception of diners toward wine list pricing strategies. Here are some reasonable justifications for their strategies.

Storage

Diners pay for the proper storage and service of wines. Temperature controlled wine refrigeration, knowledgeable and trained staff are part of what you pay for. In addition restaurant owners and operators are providing ice buckets, decanters and a variety of other wine related paraphernalia to create a distinct culture of bacchanalia.

Service temperatures of Wine:

Sparkling wines 41-47F (5-8C)
Dry Whites and Roses 44-54F (7 – 12C)
Light Bodied Reds 50-55F (10 – 13C)
Medium Bodied to Full 55-65F (13 – 18C)

Glassware

Savvy owners and operators eschew old fashioned jelly jars for sleek, delicate glassware that focuses wine’s aroma and flavors properly, allowing for proper aeration of fuller bodied wine. Reidel, Spiegelau and Ravenscraft glassware brands are elegant, sensuously curved and extremely delicate. Clumsy porters and diners can be heavy handed and negligent with these fragile pieces, necessitating frequent replacement of these valuable vessels.

Training

Great amounts of time, effort, and financial resources are put into server/ bartender training with regards to a restaurant’s wine list. Typically the service staff is called into work early to learn about the wines being offered and sample selected bottlings. This costs additional payroll expense, product use, and time and effort for managers to plan these seminar style gatherings. Frequently managers print packets of information and contact sales representatives to meet with the staff and pontificate on the finer points of wine sales technique. Chefs are called in to work with the service staff regarding proper food and wine pairings and suggestive sales speak….it is a big deal!

Service

Often over looked is the fact that you are paying for the wine to be served to you in an elegant and highly professional manner. There is a ceremony that is precise, time honored and expected when ordering a bottle of wine. Diners often consider choosing a distinct and appropriate wine which is a very important aspect of the meal and their role as host. This simple act takes on a heightened sense of cultural importance; good servers and managers understand this concept and perform in a serious and focused manner to meet this expectation.

In order to exceed this expectation a server/ manager will need to have superior wine knowledge to answer specific food/wine pairing questions or speak knowledgeably about specific vintages of wine. This valuable skill is often taken for granted until a guest receives shoddy service. Wine spilled on crisp, white linens serve as marks of shame. Servers stumble, bumble and butcher the names of wines. Corks break, wine is over-poured not leaving enough for all the guests. Questions about vintages are received with blank stares and slack jawed confusion and that Poggio di Sotto Brunello di Montalcino 2001 you just forked a small fortune over for is now being served in a port glass!

Other factors

It is important to understand that all elements of a restaurant owner’s overhead are reflected in food and beverage pricing. The lease, the lights, gas, linen, china, glass, insurance, and so many other bills pile into a restaurant owners mail box at a staggering rate. Expensive Point of Sales systems have become a necessity for owners to coordinate sales figures and inventory control. Food and beverage must be marked up substantially to yield an owner even the thinnest of margins.

Standard Wine Mark-ups

Price
Brand X bottle cost $12.50
Retail Mark up (30%- 35%) $17.00- $19.00
Restaurant Mark up (250-300%) $31.25- $37.50

These figures are estimates based on Industry standards and can fluctuate based on the overheads, philosophy or laws of supply and demand. For more expensive bottles of wine ($40 and up) the wine cost is typically doubled as patrons would rarely, if ever pay such large mark ups for these wines.

So what do you think? Is restaurant pricing fair and reasonable? Does the mark up over the retail price affect which wine you would order when eating out? Which restaurants handle the issue of wine pricing well and which do it badly?

     

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Meet the Author:
Josh Blumberg
Josh Blumberg is one of a handful of Certified Specialists of Wine (CSW) across America and is Buffalo State’s Campus House General Manager, as well as instructor of the Wine Essentials course at Buffalo State. Josh has lectured extensively on: Wine buying strategies, Understanding vintages, Understanding wine labels, Grape varietal characteristics, The role of oak aging vs. steel fermentation, Pairing food and wine.