Profile of the ‘Average’ Casual Dining Wine List

September 14, 2016 § Leave a comment

Winemetrics recently updated its 2016 casual dining wine list data and discovered a number of significant milestones which will be featured in our 2016 Wine Buyer’s Report. However in compiling this data, we were struck by the realization that despite over a decade of providing on-premise market intelligence to the wine industry, we had never sought to define the average casual dining wine list.

In 2016 we surveyed over 110 casual dining chains representing nearly 10,000 accounts throughout the U.S.. For this exercise, we averaged the numbers of By-the-Glass (BTG) and By-the Bottle (BTB) by chain, treating each chain as a single entity, this way distribution in a handful of the largest chains would not overwhelm that of the majority of smaller chains. The average is 20 wines BTG and 22 BTB with 13 varieties offered BTG and 14 available BTB.  The average presence by variety, both By-the-Glass (BTG) and By-the-Bottle is listed below. Note that Syrah/Shiraz is no longer found on the ‘average’ list, its presence is now to minor to make the final cut. Zinfandel is only present as a minor BTB selection and many lists no longer carry this quintessential California variety. Sangiovese just makes the list due to its considerable presence on Casual Italian Chain lists, which represent 13%  of the Casual Dining chains Winemetrics surveys.

casual-wine-list-by-variety

The distribution by brand/variety was similarly calculated; each of the wines listed are ranked by number of chains with distribution,  not total listings. To learn more about brand ranking by variety and account type, please download an excerpt of our 2106 Wine Buyer’s Report from http://www.winemetrics.com.  In varieties were multiple producers are present, they are ranked in descending order from the leading brand. Pricing is also an average across chains

average-casual-wl

 

Should you have any question or comments about the information appearing in this article, please contact us at info@winemetrics.com.

 

Wine’s Crisis On-Premise and How to Resolve It – Part 2

September 12, 2016 § Leave a comment

On-premise wine selections are moving toward uniformity and mediocrity at the same time cocktail and beer lists skew toward variety and innovation.  Here are 5 steps that restaurants can employ  to rectifying this situation and possibly  reversing wine’s continuing decline. Part 3 of this series will deal with wine suppliers and distributors role and how they must step up to resolve this.

  1. Offer a selection of High-Recognition, Emerging and Discovery brands
    In casual chains, Winemetrics encounters a plethora of wines frequently found on the endcaps of retail chains. This would lead me to believe that chain wine buyers are basing their wine selections on the leading brands in retail stores. Can that be possible? While a certain portion of the population may be brand loyal in all occasions, aren’t restaurateurs aware that consumers dine out for variety? Even smaller wine lists can have one or two selections that are not well known but represent superb values. Of course, selling such wines requires some server education, see #5.
  2. Offer value on your wine list
    That doesn’t mean discounts across the board; many chains charge a little more for their by-the-glass selections but offer a steep discount on bottles. Others offer benchmark wines at modest markups. What you don’t want to do is price the wines with a huge retail presence at an excessive mark-up.  Nothing says ‘rip-off’ more than charging +3x standard retail for a bottle everyone know the retail price of. Special Note: If you are a fine dining establishment, don’t offer me the same wine as those I might find in a casual chain (with the accompanying excessive markup). Recently I have found identical wines by-the-glass (BTG) on the lists of fine dining steakhouse chains as those on casual dining chains.  When I see this, I immediately assume that the fine dining establishment doesn’t care about its BTG business and wants to push its customers to purchase an over-priced bottle or is simply to lazy to care about its BTG selection. Again, as a wine consumer I find this insulting and never return to such establishments.
  3.  Publish your wine list online and keep it current
    Nothing upsets me more than a restaurant whose website lauds its awarding winning wine list and brilliant sommelier only to neglect to provide a wine list (with prices) on its website. And nothing is more insulting to a consumer who plans to purchase significant wines with his or her meal only to open a wine list and find them all egregiously overpriced.  I never return to such establishments and I’m certain many other wine aficionados are of the same mind. If you’re going to rip me off, at least have the decency of letting me know in advance so I can make a reservation elsewhere. On the other hand, if you have a great wine program with reasonable prices (are you listening Legal Sea Foods?) then mention it on your website. Looking at many chains’ websites, you wouldn’t even know they even offered wine – unbelievable!
  4. Ask my opinion about my dining (and drinking) experience at your restaurant but provide an incentive
    Nearly every restaurant provides a survey form with the check these days. Most ask about the food quality and service but few ever request input on the beverage program (the most profitable segment of their business!). I generally ignore these as no compensation offered in return for my input. However most consumers would be willing to provide extensive information on their dining experience, preferences and even demographic information if offered an incentive such as a free appetizer or half-price glass of wine on their next visit. Unfortunately, I have yet to see such an offer on any survey in the hundreds of chains I have visited.
  5. Innovation + Education – One won’t work without the other
    A few years ago I was dining out in an upscale casual chain that had a small but excellent list with a number of great values. They also offered flights of any 3 BTG wines for a reasonable price. The only problem was that the server did not know the restaurant offered flights, even though it was prominently printed on the menu (This was one of the savvy chains that actually had the food selections and wine list on the same menu!) Apparently, the server had never been trained on this feature despite his many months of employment and did not know there were special tasting glasses for the flight, so my 2 oz. pours were delivered in the bottoms of 3 balloon glasses.  Sadly, this restaurant chain no longer offers flights nor its interesting and well-priced wine selection. The best wine program in the world won’t work unless some investment in education is made. Predictably, I have not been back to this establishment.

    In Wine Crisis On-Premise and How to Resolve It – Part 3, the final installment on this subject, we examine how wine suppliers, in their pursuit of profits and on-premise hegemony, have been complicit in the decline of their product in the restaurant dining arena.

Growler USA – Setting High Standards in Beverage Management

July 13, 2016 § Leave a comment

Our readers may have taken note of a recent FSR article on Growler USA, a beer-centric chain boasting 100 tap lines and dedicated to serving  craft beverages (including beer, cider, mead and, yes, some wine). According to the article, the chain has plans to expand from 3 to 35 units by the end of 2017. We should note that this concept has precedence with World of Beers, which started with one location in Tampa, Fl in 2007 and is planning to grow to over 100 units by the end of this year. Additionally there are numerous growing regional chains offering a dozen or more drafts and many more craft brews by the bottle. The ones we have surveyed have partnered extensively with local and regional craft brewers and provide vital opportunities for endorsement and consumer trial.

So what compels me to draw your attention to Growler USA? First, they have an unparalleled commitment to serving a superb product, equivalent to a craft brewery tasting room. Second, they are seriously dedicated to providing consumer education, with all of their bartenders qualifying as Cicerone Certified Beer Servers. Third, they are devoted to supporting local, innovative craft beverage producers. Finally, and this is key, every Growler USA location provides a continuously updated list online of all their 100-plus selections with prices, something offered by virtually none of the hundreds of chains and independents that Winemetrics currently surveys. This means that a consumer can be pretty certain that what is on the website is available on tap. I know this is a relatively simple process from a technical standpoint, yet when it comes to craft beer selections, most chain websites merely state, “Ask your server about our selection of craft beers” or words to that effect.  Apparently, informing potential customers about what is being served and at what price, by location, is too much work for the average chain IT department. In fact, there are an increasing number of chains that provide no beverage information on their websites and even fail to provide prices on their printed menus! (More on that issue in a future post).

Congratulations to Growler USA; I hope it prospers and reserves some of its taps for innovative, regional wine producers.

 

(Note: Winemetrics has no relationship whatsoever with Growler USA or anyone associated with the company)

Craft Beer vs. Wine: Innovation vs. Stagnation

July 13, 2016 § Leave a comment

While wine lists across the board are decreasing in size and variety, beer list trajectories are  in the opposite direction, expanding in both size and diversity in even the most casual chain restaurants. Moreover, there has been a quantum leap in beer-oriented chains at all levels of the chain spectrum from national chains such as Yard House and World of Beers, now 70+ units strong, to regional chains such as Eureka  and Plan B.  These chains have certainly been helped by the explosive interest in craft beer,  which has seen growth in both the mundane e.g. Pumpkin Ale, to the esoteric e.g  Gose and Brett-fermented ales.  So why hasn’t the wine industry begun introducing exciting and buzz-worthy products to keep pace with their beer brethren?

The answer lies largely in the attitudes prevailing among the thought leaders in each industry. With few exceptions, the wine industry has doggedly remained loyal to the European concept of wine, that wine is a product of terroir and tradition, e.g. the fixation that the best wines are representative of a specific variety and place. Estate-grown wines of approved varieties or blends that follow traditional production methods are held in the highest esteem by an increasingly narrow group of gatekeepers in both wine production and wine media circles.  Had the beer industry followed the same path, the majority of producers would still be following the Rheinheitsgebot, which dictates that beer consist only of malted barley, yeast, water and hops. And we would never have had the vast array of products that has vaulted the American beer industry from mediocrity to its current apex of innovation and growth.  Fortunately, American beer producers rightly found this European model too constraining and began experimenting with untraditional flavors, fermentation techniques and aging methods.  In a few short decades, American craft beers have become the global standard of beverage innovation. If you had suggested 30 years ago that American brewers would be opening facilities in Germany, the birthplace of modern brewing, you would have been laughed out of the bierstube. In the 1990s, hypothesizing that someday small American brewers might have a market value of over $1 billion (Lagunitas, Ballast Point) would have earned one a trip to a local asylum.  Yet it has come to pass.

What remains puzzling is that, despite craft beer’s incredibly successful example, which has been eating the wine industry’s lunch for the past decade, few wine producers have dared to defy the ossified old guard who continue to enforce the standard of European wine production.  Is it arrogance or merely ignorance that prompted the wine industry to relinquish an entire segment that it should rightfully own –  cider ( a low alcohol fruit wine), to the American beer producers?

Having been in the alcoholic beverage industry for over 3 decades I have a fairly good ideaof  how this saga will play out, unless drastic measures are implemented very soon.

The wine industry today is much like the U.S. auto industry of the 1970’s, which took the attitude that the public will buy what it tells them to purchase. We have all seen how successful that approach has been. Now Toyota is the world’s largest car company. Hopefully, the wine industry will come to its senses before it is too late.

The Average Casual Wine List – Part 1

October 29, 2015 § Leave a comment

Winemetrics 2015 survey of 100 top casual dining chains has seen a drop in both by-the-glass and by-the-bottle listings. In our 2014 survey, the average casual dining list had 18 by-the-glass (BTG) and 23 by-the-bottle (BTB) selections. This year our preliminary survey indicates that those numbers have fallen to 17 BTG and 21 BTB.  Domestic wines dominate this segment, making up 70% of all listings. The smaller selection size also limits the diversity of these lists.  Below is the typical allocation of placements by variety.  Varieties not appearing on the table below would be found in the Other category, this would include Zinfandel and Syrah/Shiraz which, until recently, were among those varieties that had a presence on casual dining lists.  Part 2 of this blog will reveal the leading wines in casual chains as well as average pricing.

Average Casual List #BTG Listings #BTB Listings
Chardonnay 3 3
Cabernet Sauvignon 2 3
Pinot Noir 2 2
Merlot 2 2
Pinot Grigio/Gris 1 2
Sauvignon Blanc 1 1
Malbec 1 1
Red Blend 1 1
Riesling 1 1
Brut 1 1
Moscato Bianco 1 1
White Zinfandel 1 1
Other 2 3
17 21

Sterling: A Good Match for Treasury Wine Estates?

October 6, 2015 § Leave a comment

There is an industry rumor circulating that Treasury Wine Estates (TWE) is contemplating a purchase of the Sterling brand from Diageo.  Winemetrics, having done preliminary research on Sterling’s on-premise performance, is not certain this would be an appropriate fit for TWE.  Sterling used to be an on-premise powerhouse; five years ago Sterling was a leading restaurant brand, ranked 7th by-the-bottle (BTB) in Winemetrics 2009 On-Premise Wine Distribution Report. However, the following year Sterling had dropped to 16th BTB.  Since 2010, Sterling continued to lose distribution on-premise; in Winemetrics most recent 2014 survey, its BTB ranking fell to 50th place. Further analysis indicates that Sterling and Beringer, the flagship brand of TWE, have similar strengths, both with 29% of their on-premise distribution in Cabernet Sauvignon.

Perhaps a better choice for TWE would be one on Diageo’s Pinot Noir focused brands, such as Acacia or Chalone. On-premise distribution of Pinot Noir represents just 4% BTG and 5% BTB of TWE’s portfolio of brands. Meanwhile one third of TWE’s BTG and a quarter of its BTB distribution are devoted to White Zinfandel, a variety experiencing a slow decline on-premise.  Of course, on-premise distribution may not be a deciding factor in a wine brand purchase. However, the well-known brands, that have recently been sold at a premium,  (Meiomi is a perfect example) have had extensive restaurant distribution at the time of their purchase.

For more detailed analysis on the compatibility of Diageo’s brands with the Treasury Wine Estates portfolio. Please contact us at info@winemetrics.com.

Casual Chain Wine Selections Decline in 2014

November 19, 2014 § Leave a comment

If you are a recipient of Winemetrics’ newsletter, you have already seen this headline. Casual chains cut wine listings considerably in 2014. We think the primary cause of this is greater competition from craft beer and cocktails, which are successfully challenging wine distribution in this dining segment. I have already outlined how craft beer and spirits outperform wine in profitability in a previous post. Still, it appeared that wine was holding its own in casual chains until this year. We were shocked to see all of the top 10 casual chains in our survey reduce their wine selections along with regional chains. Below is a partial list of chains with reduced wine selections in 2014:

Olive Garden
Outback
Ruby Tuesday
Red Lobster
Red Robin
Longhorn Steakhouse
Carrabba’s
P.F. Chang’s
Romano’s
The Cheesecake Factory
Bertucci’s
Carino’s
Yard House

Overall reductions add up to over 17,500 lost By-the-Glass (BTG) placements and more than 22,600 By-the-Bottle (BTB) listings. A study reported by Cornell’s Center for Hospitality Research indicates that smaller list sell less wine overall so that wine revenues in these accounts will probably decline. This could become a self-fulling cycle in casual chains. “Reduce the wine list = sell less wine = reduce wine list further as the current selection of wines does not justify its investment” This sounds like a beverage program being run by accountants, not beverage professionals.

One thing is certain. The wine suppliers who were included in those lost -17,000+ BTG listings and -22,000+ BTB listings, will be selling fewer cases on-premise this year unless they find alternative outlets.

5 Reasons Why Wine Is Losing Share to Cocktails and Beer On-Premise

September 4, 2014 § 2 Comments

5 Reasons Why Wine Is Losing Share to Cocktails and Beer On-Premise

  1. Competition
    When I first began selling on-premise in the early 1980’s there was no competition to wine. Craft beer and spirits were rare and wine was the recognized companion to food. Fine dining restaurants eschewed beer and had, at best, rudimentary cocktail lists. Wine was the only option and it developed in a competitive vacuum. Those conditions no long exist and wine is having its primacy eroded.
  2. Profit
    Wine is the least profitable alcoholic beverage a restaurant can serve. Bottled beer is more profitable, draft beer, properly managed, is even more profitable and cocktails provide the best margin of all. This means it is in the best interest of the restaurant to promote these other beverages, not wine. This does not even factor in the fact that a cocktail and bottle/draft are guaranteed to be fresh, unlike a BTG serving of wine which may have been opened for over 24 hours prior to serving.
  1. Price/Value
    I have witnessed (and can objectively verify) the contraction and ‘specialization’ of BTG wine list at a time when cocktails and beer are moving in the opposite direction (see 4. Innovation). Given the options of a 20-ounce glass of iconic craft beer or imaginative cocktail versus a mass-market common varietal (which may be the most expensive of the three) what would the average Millennial choose? My guess is the wine would be dead last.  Here is a concrete example. I was in a South American restaurant having dinner. There were no craft beers on the list (surprising that can still happen but it does) and a glasses of the most ubiquitous brands of the most common varieties were in the $9 range. For a dollar more I could purchase a grilled pineapple and cilantro margarita made with Don Julio Reposado and Cointreau. Which would you purchase? By the way, that margarita was magnificent and judging by the condition of the open wine bottles on the back bar, there was no choice.
  2. Innovation
    The explosion of flavored and uniquely aged spirits as well as specially craft and aged beers and ciders has placed the United States in the forefront of innovation in these industries. Foreign beer and spirits producers are in awe of what has happened here. Fifteen years ago, American beer was still largely a joke in Europe, now we are making products that totally surpass most of what is offered there. I can find a better beer selection in my hometown bar in rural Pennsylvania (from mostly local producers) than I could in Frankfurt or Berlin. While America does not have this edge yet in spirits, we are most certainly the innovation leader is crafting superior cocktails from domestic and international ingredients.  Our success in beer and cocktails can be directly attributed to disregarding the European models. The European model for beer was the Rheinheitsgebot, where pure, natural beer could only be composed of yeast, barley, hops and water. European cocktails used only local or country specific ingredients (English gin and Italian vermouth in the same glass, never!)
  3. Image
    Wine no longer has a leading-edge image, it is the beverage of choice of Boomers (aka parents of Millennials) while Millennials themselves have more eclectic preferences. On of the reasons I started drinking wine was it was a beverage my parents didn’t drink. With wine as the Boomers top choice it is no surprise that their offspring are seeking out different libations. Craft beer and artisanal spirits have captured the imagination and discretionary income of this younger segment of the population.

10 Ways Restaurants Undermine Their Beverage Programs

June 3, 2014 § Leave a comment

The best planned and well-conceived beverage program can be derailed or at least minimized by common mistakes. Here are 10 of them and they are far more common than you would expect.

  1. Failing to post wine and drink menus on the restaurant website OR.
    • Leaving outdated information on the site
    • Posting ‘sample’ lists that don’t reflect the diversity and scope of the beverage program
    • Incomplete list e.g have wine BTG but no BTB list or fail to include craft beer and/or a complete cocktail list
  1. Failing to provide pricing on drink list (common problem for beer and cocktails). Would you order from a dinner menu that had no prices? So why the double standard for drinks?
  2. Failing to include drinks (wine BTG, beer, cocktails) on the food menu.
  3. Using the words “Ask your server about our (reserve wine list, craft beers, small-batch bourbon, etc) .” If it’s worth selling, it is worth placing on a menu that may have to be reprinted once and a while.  Server’s have a hard enough time memorizing the daily food specials – don’t expect them to recite and describe the 20 craft beers you pour.
  4. If there is a drinks menu: failing to place the wine list, drink list, beer list on the same menu. While a ‘complete’ beverage menu  is common in casual chains, many upscale-casual and fine-dining establishments force their patrons to juggle menus.
  5. Not having a craft beer list (or a cocktail list)
  6. Not training your bartenders to have a background on what they are serving.
  7. Treating beer taps as faucets (bartenders who let a beer tap ‘run’ prior to pouring a draft is one of greatest sources of lost beverage revenue)
  8. Excessive pricing of mass-market brands.  Consumer seeing over a 3 times retail price for a wine they frequently see on an end-aisle display at their local liquor store will assume the restaurant is overcharging for everything and will probably not return (FYI, I don’t)
  9. Not having tastings or flights of wine and beer (some enterprising chains offer cocktail flights by the way).

Eureka! The Future of Upscale Casual Dining?

June 3, 2014 § 2 Comments

I recently visited the San Luis Obispo location of a small, 10-unit restaurant chain based in California named Eureka!. And yes, like Archimedes, I do believe I found something extraordinary. Eureka! has a cutting-edge beverage list with an artisanal and local focus for its wine, beer and cocktails. The food focus is local and affordable. Only hormone and antibiotic free beef is used in the gourmet burgers which range in price from $9-$12; nearly all entrees are under $20 (their Hangar Steak is $23.50).

The beverage program, however, is what distinguishes Eureka!  By my count there were 33 draft beers available, with not a single mass-market beer among them. The taps were divided into 19 ‘tried and true’ offerings (Lagunitas IPA, Allagash White, Stone Ruination) at $5-$9 and 10 Rotating Taps that offered more expensive ($6-$11) esoteric drafts. The 10 offerings of bottled beers were mostly rarities priced over $20/bottle with the highest-priced offering $65.

The cocktail list remained true to concept with 27 artisanal spirits and 9 Classic Cocktails. The focus here was on the cocktail ingredients, not the mixology. Again, the focus was local (California) and no mass-market brands were listed on the drink menu.

Eureka!’s wine selection was the smallest segment of the beverage list, just 14 by-the-bottle and 10 by-the-glass offerings. Wines were primarily from the Central Coast area but far from artisanal. Again, no mass-market brands made the cut, but the selections were far from cutting edge.  All the offerings were from mainstream varieties (half of the selection was comprised of Chardonnay, Cabernet Sauvignon and Pinot Noir); there were no stand-out rarities. By-the-glass offerings ranged from $6-$12 and bottles from $22-$69. It appeared that wine was placed on the menu merely to appease the occasional wine drinkersthat might happen to stumble in. This assumption is reinforced by the fact that Eureka! offers both a ‘build your own’ beer and spirit flight yet no such option is offered for wine.

The only flaw in Eureka!’s execution is there is no way to see how inventive and extensive its beverage program is as no drink lists are posted on its website. (See our post “How Restaurants Undermine Their Beverage Programs”.

Evidence that the Eureka! concept resonates with Millennials can be substantiated by the success of similar concepts around the country. Umami Burger, Plan B, Slater’s 50/50 and Square 1, among others, follow the local, artisanal, beer-centric model and are adding new locations at a rapid pace.  In all of the gourmet burger chains I have visited, wine plays a secondary role, yet I doubt there is a more burger-friendly beverage on earth than a brambly, full-bodied Zinfandel. Perhaps it’s time for the wine industry to address this gap in its on-premise coverage.

(Note: Eureka! is not a client of Winemetrics, nor do any of its employees have an affliation with anyone associated with our company. Also, Eureka! has not been nor will it be solicited for any future compensatory relationship with Winemetrics).

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