Ten Steps to Improving Wine List Profitability
October 14, 2010 § Leave a comment
Key Features Offer Greater Wine Profits
(*based on research published by Cornell’s Center for Hospitality Research)
- Post your wine list on your website with prices
Your customers should have the option of seeing your wine list before committing to making a reservation. In an upscale casual restaurant wine for a party of two core wine consumers can total 20-50% of the final tab; in the case of a fine-dining account with special bottles it can be 50-100%1
- Put at least your BTG but hopefully part or all of your BTB list on the food menu*
This is a no brainer. Having the by-the-glass selections or the entire wine list allows your customers to view your list as soon as they sit down without waiting for a wine/drink list to be provided. Having a wine selection on the menu also permits your more sophisticated diners to easily match their wine and food selections.
- Add multiple BTG (by-the-glass) serving sizes especially half-glasses*
Having multiple glass sizes, especially half-glasses, is one of the best ways to increase wine list profitability. A diner may wish to have atwo different wines with his/her without having to drink two full glasses. A half glass with an appetizer and a full glass with an entrée can provide that experience without the cost of 2 full glasses or bottle. Also, for some diners, a 5-6 ounce pour may not be sufficient for a hearty entrée and a half-bottle or bottle too much; a 9 ounce glass might be just right. According to the Cornell Research tasting portions increase sales by 18-47%, and if you think tasting portions are only for upscale restaurants, this study was executed in a casual seafood restaurant with a 20-item wine list.
- Add flights or, better, offer a build your own flight option*
Flights are usually a group of three or four 2 to 2.5 ounce tastes. They vary from the mundane to the exotic and are generally tailored to a restaurant’s clientele. It may be prudent to let the customer create his or her own flight, an approach that seems to have worked well for P.F. Chang’s China Bistro.
- Add half-bottles
Half bottles enhance a wine list only if they meet two criteria. They must be fairly priced and they should be well-known products. A diner who, prior to the recession, might splurge on a well-known $50 Pinot Noir, may still go for a half-bottle of that same wine for $25-$30.
- Price your wines fairly, or else.
Nothing will infuriate a wine aficionado more than an egregiously over-priced wine list. The restaurant that commits this affront either does so out of ignorance or is trying to put one over on an unsuspecting public. Knowledgeable wine consumers are, if anything, a savvy group of consumers and they are a restaurant’s most valuable customers. They understand that an aged, USDA Prime ribeye steak should cost more than a regular T-bone on a menu, but they don’t understand why one restaurant would charge $60 for the same wine another is offering for $40. These consumers know what their favorites wines cost at retail and so are aware when are being gouged. The 2.5 times retail markup is usually a safe standard.
- Expand the size of your wine list, especially if you have a casual or upscale-casual restaurant.*
According to the Cornell research, this works up to 150 items. A general rule of thumb, a casual-dining restaurant with less than 26 wines should add selections as should an upscale-casual dining restaurant with less than 60 wines. Those are the average number of items for each segment from our 2010 Chain Restaurant Wine Distribution Report.
- Add well-known, higher-priced wines to your wine list or even add a reserve section to allow wine consumers to trade up.*
With consumers trading down from fine dining establishments to upscale casual and casual dining venues, it is very likely those with ‘trade up’ wines will reap greater profits. Wine aficionados may be willing to save a few dollars on a meal but will not be commensurately reducing their wine choices. More likely, the bottle purchase will become a half-bottle or glass. Restaurants with the selection to attract these consumers will be rewarded.
- Take the $ signs off your wine list.*
Very simple, according to the research, it works.
- Provide recommendations either via your waitstaff or, if your restaurant format permits, on a table tent. *
According to Cornell’s research, “a table-tent promotion of five wines increased wine sales of promoted wines more than promotions recommending a single wine or three, spurring a 39% increase for the five featured wines, a 12% increase in overall sales and a 4% increase in total restaurant sales”. While table tents may not be part of every restaurant’s format, with desktop publishing there is no reason such recommendation cannot be made on the wine list, or even better, the dinner menu.