By The Glass: Pricing for ProfitsJune 6, 2011 By: Kelly Magyarics Night Club and Bar Magazine
Investment in Strategic Wine-List Development Pays Off
The by-the-glass wine list often is a customer’s first impression of a restaurant or bar, and patrons keep a keen eye on its selection and value. To maximize profits, operators are wise to remember their unique “formula” for creating price appeal and identify guest expectations for quality and price. While we all wish an easy, standard calculation existed, sadly, every bar operator must buckle down and apply the right combination of art and science to satisfy patron and profit needs.
Julian Mayor, the head sommelier at Bourbon Steak in Washington, D.C., notes that the wine-by-the-glass pricing process is a balancing act, requiring “research into your guests’ preferences, what other restaurants offer, what wines are new and interesting that aren’t offered elsewhere and who can provide those wines to your restaurant at the best prices.”
A by-the-glass list commonly contains several of the same varietals, but including two or even three oaky Chardonnays at the same price point causes head scratching. Redundant choices waste menu lines that could be better served with different varietals, regions or price points. However, a mid-priced buttery Australian Chardonnay and a lean, mineral-driven white Burgundy will have differences in style and overall quality that may appeal to different wine drinkers. And, as Mayor points out, higher-end options bring increased profits, while attractive, less expensive wines result in more sales.
If your by-the-glass list is large and ambitious, it may make sense to offer, say, two California Cabernets in different price ranges, giving customers the chance to sample varying styles and quality levels.
However, if there is not enough space on the menu to explain the differences, staff training is required to fill in the gaps. Many factors go into wine pricing, such as varietal class, labor type (manual vs. machine harvesting), origin/region, oak treatment, aging requirements and name recognition, just to cite a handful. Staff members can refer to these factors when educating guests on why one glass of wine costs $9 and another $14. They do need to be cautious, though, not to use the word “better” when comparing two wines, Mayor says: The key is to offer quality wines at all price ranges. Comparing a New Zealand Pinot Noir to a red Burgundy is the wine equivalent of comparing apples to oranges.
One challenge to serving a decent selection of wines by the glass is reducing waste that easily can cut into profits if not kept in check. Savvy wine directors can offset waste by periodically checking to see which offerings are selling and which are remaining in the cellar.
How an establishment treats opened bottles is a determining factor in curbing profit-eating waste. The high-end Enomatic wine-serving system and other preservation systems successfully prevent wine from oxidizing and spoiling, but operators need to reduce upfront costs with savings over time to determine if these pricey products work for them. The master sommelier at Citronelle in Washington, D.C., Kathy Morgan finds simple refrigeration is more effective than any low-price gas or vacuum system. She makes an extra effort to select by-the-glass wines that hold up well, noting that some actually taste better the next day. Opened bottles are kept until the next shift, after which leftovers are discarded. The strategy might not be economically feasible for some, so choosing inventory that moves is crucial.
Every list has a “sweet spot,” according to Morgan. “If you can’t keep the $15 selections in stock, then that’s your sweet spot, and you need more $15 selections — and you should probably drop one or two in the price points above and below $15.”
Sometimes inventory is exhausted and no longer available, necessitating that a new selection be added to the list; an eclectic wine also can be offered for a limited time to pique adventurous palates. A well-thought-out by-the-glass program is fluid, varied and designed to drive profits while maintaining customer interest. NCB