How often, when enjoying an evening out, are you distracted by annoying wine issues? For us, a case in point came the other night when friends invited us to dinner at a restaurant in New York’s Greenwich Village. In these budget-conscious times, don’t we all want to believe we’re getting good value when eating out in both food and wine?
But that was hard at this restaurant, where the least expensive white wine on the list was a vidal blanc from the Finger Lakes at $42 and where I ended
When the sommelier, an imposing young man who might have been an actor or model in another life, returned with our bottle, he announced rather ceremoniously in his baritone voice, “The 2009 Domaine de la Chaise.” I wanted to chuckle again. The formality -- and the price – were at odds with the way I thought of this wine, as a fresh and delightful sauvignon that would pair well with a variety of appetizers and lighter main courses, which it did on this evening. When I told the sommelier that I knew the retail price of this wine, he smiled knowingly but withheld comment.
He did, of course, make sure that our glasses were always topped off, even though (in our minds at least) we were certainly going to order a second bottle because we were enjoying it, despite the high price for a relatively cheap wine. And when we did, that brought the tab for two bottles of Domaine de la Chaise to $96. Which takes me once again to the issue of restaurant and wine economics and The Markup. I am keenly aware that restaurants make much of their profit from wine, and I have come to expect the price of wine in restaurants to be about three times retail, which would have put the Domaine de la Chaise at around $39 instead of $48 and would have made the selection more palatable (yes, $9 makes a difference to me).
It’s worth noting as well that the standard markup from wholesale to retail is 50 percent, which means that the cost of this wine to a store or a restaurant is under $10 – and probably even less depending on how many cases are ordered. So the markup (not necessarily the profit) on each bottle of the sauvignon blanc we ordered is around 400 percent, which seems excessive even by New York standards. (The least expensive red, by the way, was a Montepulicano d’Abruzzo from Italy at $44.)
I can’t help but think that if the markups came down a bit and a few more relatively inexpensive wines were offered at this and other restaurants, profit from wine would be the same or even greater. And most of us would feel at least a little more as though we were getting our money’s worth. What do you think? Please share your recent experiences and observations on wine in restaurants.
Absolutely spot on! As a winemaker of "reasonable" priced wines in the 10 - 15 dollar range at retail, I hate restaurants that mark up wine 3 fold and more. My answer is to bring my own wine and pay exhorbitant corkage fees of 10 - 25 dollars a bottle. At least I know that the wine will be good and not excessively priced.
ReplyDeleteLodi Winemaker
I heartily agree with Ed's sentiments. In past lives I've developed highly profitable wine programs and award winning wine lists for white table cloth restaurants and even a couple of Ritz-Carlton hotels (pre-Marriott ownership). My rule of thumb was a mark up of no more than 3 times cost at the low end (wines below $12 cost)with a sliding scale down to 2 times wholesale cost for wines that cost me more than $75.00. Both volumes and profits were always very good to excellent. Imaginative wine-by-the-glass programs enhanced profits as well. Perhaps NYC, as the center of the universe, plays by different rules and doesn't count on loyal customers or repeat business from customers who feel appreciated.
ReplyDeleteWhile restaurants need to generate a reasonable return on their investment, it is important to remember you don't bank markup. You bank DOLLARS!!
ReplyDeleteAs a wine industry professional on the supply side, who used to work in the restaurant business...I get tired of hearing this same complaint. Restaurants are not high margin businesses and there are many costs associated with running a restaurant that go into the cost of that bottle of wine. From things as basic as stemware (and associated breakage) to training, cost of carrying inventory, etc that make that bottle cost more in a restaurant than in a retail store. Yes, NYC is more expensive. But that is due to some pretty basic economic principles...supply and demand.
ReplyDeleteFrom a wine supplier side, I find this (often told) story frustrating. The last thing we want is for consumers to think they are getting ripped off. Nobody ever tells the story on the mark up for beer (5+ times), Spirits (15+ times) or the worst offenders, fountain sodas(20 times). Taken into consideration, a bottle of wine is a pretty good deal...it just happens to cost more to produce so that price gets amplified through the system.
I agree, as a consumer, with the comments. I don't like to spend a lot on wine when I go out and will prioritize restaurants that have what I consider to be a reasonable mark up.
DeleteMy main point however, was that the mark up on wine is not as much as on other aspects of the restaurant experience, but that wine seems to take the brunt of the complaints. I would love to hear comments/perspectives on that.
-Cheers
Hello Anonymous:
ReplyDeleteI feel the need to argue that while good stemware is more expensive, retail stores carry inventory as well. Also, training costs are almost always borne by suppliers/distributors.
No one denies the restaurant's right to make a profit. Unfortunately, it has become stupidly expensive for wine drinkers to eat out.
I've taken to inviting people over instead - the food isn't bad, and the wine is always superior. I don't see that as the answer either.
If you and others are "tired of hearing this same complaint," maybe something should be done about it. Some restaurants do a good job. Why can't more?
I had the same experience in Sacramento, California last week. Wine prices are certainly not as exorbitant as they are in NYC. Just the same, my spouse and I find ourselves choosing restaurants with exorbitant wine prices less often. For instance, last week we had a wonderful dinner at a new restaurant in our area. But the high markup on the wine list caused us to put that restaurant on our special occasions list rather than our go-to favorites list. In our case, a lower markup would result in our visiting more often.
ReplyDeleteIt isn't much different in the SF Bay Area. However, there is a restaurant in Berkeley - Great China - known for excellent Peking Duck and a tremendous wine list (take a look at some of the ridiculously low mark-ups: http://greatchinaberkeley.com/wine-list/). In fact, wine and restuarant industry people dine there often - Chez Panisse, Oliveto's, K&L, Vik's, Narsai David, etc. So you can actually attract wine-knowledgable diners with a great selection and reasonable pricing.
ReplyDeleteI agree 100%. Mark-ups should be double retail at most, not triple..the best restaurant in Pacific Grove (Monterey Area) is Passionfish. They sell their wine for a few dollars above retail and the wine flies out of their cellar. Great food, service and fantastic wine pricing equals a very successful restaurant.
ReplyDeleteAs a winery owner, I really love going to restaurants where I know the markup isn't excessive. There is no reason for an excessive markup, really. Does it really cost more to serve a more expensive bottle of wine? cost of capital is a bit more, but service is the same. 3x or 4x markups force a skewing to the lower end of the selection. $30 for low end ($10 retail) red, vs $120 for a really nice cab ($40 retail)? Why not price a certain fixed dollar amount over retail? How much more high end cab would sell if it was $60 (the same dollar amount markup over retail as the low end wine)?
ReplyDeleteThere are some restaurants that feature some of their wines at RETAIL pricing, but those are few and far between.
Advice to guests from a long time restaurateur...
ReplyDelete1) Please realize that our business is expensive to run. Labor, rent, insurance, repair & maintenance, linen, equipment, supplies ... you aren't just paying for the bottle of wine & the glassware.
2) Please do some research before you go out. Many restaurants have their wine lists online, or stop by a day or two early for a quick peek at the list. Make a practice of rewarding restaurants with reasonable wine markups with your business. This is also a romantic strategy because you'll spend less time looking at the list, and more time gazing into your sweetie's eyes, and you might be able to afford a better bottle.
Wine seems to be the one item restaurantuers feel immune from overpricing, although beer is catching up. Actually all beverages are expected to bear an undue burden of covering a restaurants overhead. And I believe it is lazy and intentional. No wine professional that is reading this has gone one day without hearing an owner or buyer asking for only wine that is not in supermarkets or chain channels ie. wine that cannot be comparison shopped. Try marking your entees up 400% off retail. Solution: Get their attention by drinking iced tap water or as was suggested support hard working operators that price fairly.
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