Are You Getting Your Fair Share of the Wine Dollar?

Wine on Tap

Though the annual increase in wine consumption has slowed somewhat, Americans continue to drink more wine every year. But it doesn’t seem like bars and restaurants are getting their share of the wine dollar lately, as spirits, ciders and craft beers are doing the heavy lifting. But there’s one advantage that on-premise operators have compared to retail stores, though it’s still in early times: wine on tap.

Most observers agree that wine on tap is here to stay, with growth expected to continue. The category has been about doubling every year, with somewhere between 350,000 to 400,000 cases sold through draft systems expected this year. That’s only about one percent of on-premise wine volume, but as more wines become available, and systems prove satisfactory, profitable and environmentally sound, taps may be a core part of future wine service.

The environmental savings alone are enough to encourage some operators. But those with fairly slow but steady wine volume should take a look as well - the systems currently in use keep wine fresh for extended periods of time, and allow a very easy sampling system, something that can promote the concept of wine on tap and the wine served from it at the same time as it allows operators to greet customers more hospitably with a little glass of something.

Draft systems also make by the glass programs easier to manage and promote, as well as more visible and better priced.

As for customer resistance, not much seems evident - a Wine Opinions consumer panel in January revealed very little resistance to wines on tap with respondents indicating that the perception of quality and value is high.

Jordan Kivelstadt, co-founder and ceo of Napa-based Free Flow Wines, a packaging and logistics company said to be the largest player in wine on tap, with clients including Gallo, the Hess Collection and many others, says “The biggest thing holding the wine industry back from being innovative is the wine industry. The truth is the average wine consumer out there is ready for more innovation in wine because they want wine to be more accessible and more engaging.”

Most resistant are older, wine knowledgeable people who order high end, more aged wines not intended for draft systems anyway. But for Millennials, it’s a different story, says Kivelstadt. “‘Try before you buy’ is perfect for Millennials; it allows restaurants to have more by the glass wines with less spoilage and no margin degradation.”

It also allows operators to be able to include different wines seasonally, moving in rosés for the hot months when the popularity of these wines soar, for example, and can be sold in fairly high volume. It also allows better control over the cost of red and white Sangrias or other wine-based mixed drinks, as the per glass price can be trimmed significantly without sacrificing quality.

Of course, there is a cost to entry - installing wine-specific draft systems. But with bars already considering and installing systems for draft cocktails, surely the volume of wine served puts increasing the number of taps on the table for 2015 and beyond.

 

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