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.
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
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August 15, 2016 § 3 Comments
Winemetrics is halfway through its 2016 on-premise wine list surveys, and to be frank, there is very little good news to report. Wine lists are not only decreasing in size but also in variety. Selections are increasingly based on brands controlled by the top 10 suppliers. Since the start of 2015 we have seen many iconic independent wineries ‘absorbed’ by the largest suppliers. Benziger, B.R. Cohn, J. Winery, Orin Swift, Patz & Hall, Siduri, Talbott, The Prisoner to name just the ones that come to mind. But this decline of wine on-premise is just half of the bad news for wine. The meteoric, unstoppable rise of craft beer and craft cocktails may spell the end of wine on-premise as we know it. The key, and most damning piece of evidence is the admission (in confidence) from wine professionals themselves. When not at company functions or on the corporate expense account, they are drinking beer and cocktails, simply because there is more variety, flavor and value in the average beer and cocktail list. This is especially true in casual restaurants where the same wine products appear with monotonous regularity. For the record, I am not a proponent of the ‘small is beautiful’ school of wine marketing. Major national brands are extremely important to a segment of wine consumers that seek the comfort of a consistent, well-known producer. However, when these brands or their line extensions dominate wine lists to the exclusion of any innovative or more esoteric products, it is at that point that any wine consumer with a slightly more adventurous palate closes the wine list and orders a beer. And, I confess, that’s what I do now.
If you believe my observations aren’t supported by facts please click on the link below to Lewis Perdue’s Wine Industry Insights where he features a recent Gallup survey.
From Winemetrics’ observations of hundreds of chains and independent restaurants, it does not appear that the wine industry is taking this threat seriously. As a 35 year veteran of this industry, I have seen trends, brands and fads come and go. I remember vividly a distributor presentation by a wine cooler executive in the 1980’s who extrapolated his brand’s 2 year growth curve a decade into the future, promising his audience of a massive windfall in profits. According to the executive, this was ‘guaranteed’. It didn’t quite work out that way – has anyone seen a wine cooler recently?
Of course, we cannot lay the blame solely on the wine industry, as the restaurant industry is also complicit in this process. Possibly persuaded by off-premise sales figures and incentives of the larger suppliers, restaurateurs have yielded too much control of their wine lists to big corporate interests. In Part 2, I’ll discuss steps restaurants can take to not only invigorate interest in the wine segment, but actually take ownership of innovation for their wine selections.
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)
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.
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|
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 firstname.lastname@example.org.
November 6, 2014 § Leave a comment
Syrah/Shiraz and Zinfandel, once among the top 10 varieties on-premise, have fallen to 16th and 15th respectively as reported by Winemetrics 2014 On-Premise Wine Distribution Report. Malbec now has more combined By-the-Bottle (BTB) and By-the-Glass placements than either and is ranked 11th. Red Blends, those non-traditional varietal mixes (not to be confused with Bordeaux Blends, Rhone Blends and Super Tuscans, which Winemetrics tracks separately) have jumped to 7th position.
Although Red Blends frequently incorporate Zinfandel and Syrah and often have similar flavor profiles, their catchy names and packaging, appeal more to Millennial consumers. More restaurants, especially casual chains with smaller lists, are dropping Zinfandel and Syrah/Shiraz from their wine lists.
September 4, 2014 § 2 Comments
5 Reasons Why Wine Is Losing Share to Cocktails and Beer On-Premise
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.
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.
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.
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!)
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.
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.
- 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
- 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?
- Failing to include drinks (wine BTG, beer, cocktails) on the food menu.
- 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.
- 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.
- Not having a craft beer list (or a cocktail list)
- Not training your bartenders to have a background on what they are serving.
- 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)
- 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)
- Not having tastings or flights of wine and beer (some enterprising chains offer cocktail flights by the way).
April 7, 2014 § 1 Comment
According to Winemetrics preliminary 2014 wine list survey, 8 leading casual dining chains have reduced their wine selections, most by double digits. The following data indicates the steepest across the board decline we have ever witnessed in on-premise wine selections. This may portend a trend by national accounts to shift emphasis from wine to the faster growing craft beer and cocktail segments of their beverage programs.
Winemetrics compared its mid-year 2013 wine list data with recently acquired data from identical chains this year. Our findings indicate the following combined by-the-bottle and by-the-glass wine listings decreases by percentage.
Longhorn Steakhouse -22%
Olive Garden -28%
Outback Steakhouse -18%
Red Lobster -6%
Ruby Tuesday -17%
We will post more insights on this trend as our 2014 wine list update continues.