Red Lobster Unveils Most Comprehensive Menu Transformation in Brand History (but not the Wine List)
October 24, 2012 § Leave a comment
This was headline of a recent restaurant newsletter I received (the parentheses are mine). The article mentioned the extensive menu changes, brand repositioning, the addition of a wood-fired grill and new Bar Harbor motif for Red Lobster’s renaissance. What was not mentioned were the changes in the wine list, so I examined the Red Lobster website to note the expected improvements.
Apparently the same level of investment devoted to Red Lobster’s renovations and repositioning was not allocated to the wine program. Red Lobster’s newest wine list revision, already among the smallest in the Casual Seafood segment, according to Winemetrics 2011-12 Chain Restaurant Report, lost a listing and is now tied for last place with Flanigans, a Florida fish house, with 14 by-the-bottle (BTB) listings. It should be noted that the beer selection is now larger than the wine list at Red Lobster.
There is an upside as two new varieties were added, Pinot Noir and Moscato and no existing varieties were eliminated, increasing the list’s varietal diversity. To make way for these additions however, Cavit Pinot Grigio, Columbia Crest Merlot and Excelsior Cabernet Sauvignon were cut from the roster. The big winner in this change is Trinchero’s Sutter Home, which now has a Moscato listing to add to its Chardonnay, White Zinfandel and Merlot entries, giving it a 29% and 27% share of the BTB and BTG listings, respectively. Certainly you have to applaud Sutter Home’s salesmanship, but shouldn’t the leading Casual Seafood chain also be the leader in beverage programming? This was a role that Olive Garden, it’s sister restaurant at Darden, played for a number of years until its competition caught up. Based on research published by Cornell’s Hospitality Research Center, we know that larger wine lists generate more revenue (up to 150 listings!). Wine promotions, such as tasting portions, wine recommendations and wine flights, when properly executed, all generate substantial increases in profit. Yet such promotions are used by just a handful of casual chains. It is disheartening to see one of the nation’s largest restaurant operators, once a champion of wine promotion, moving in the wrong direction. More on this in our next blog entry.