Managing a wine program often seems romantic to people who've never done the job. "It must be so hard to taste wine!" they joke.
It ishard, as any wine director knows. Beyond the allure of selecting wine, it calls upon a wide range of skills including defining the philosophy, designing the list, pricing, managing profit and cash flow, operating the cellar, training the staff, and of course delivering an outstanding customer experience day in and day out.
All of this is vital. Wine programs are a significant source of profitability for many restaurants. Especially the with high cost pressures in California, having a solid wine program can make the difference to restaurant health.
As I worked my way up from server at Spago to wine director at The London Gordon Ramsey, I learned some fantastic tips about how to find more profitability in a wine program. In this series of emails, I wanted to share a few of my favorite tips--in case they can help accelerate your success.
Today we'll focus on margin.
When it comes to margin, it's useful to start with a formula for list and BTG selections. Then, prices should be reviewed and possibly adjusted on each wine, to ensure they communicate and deliver value for the guest as well as profit for the restaurant.
One effective adjustment is marking up your well-known wines a little less than your average. Why? If people recognize some of these well-known wines and realize they are relatively affordable, they will feel more comfortable selecting from your list. On the flip side, you can make more on "discovery" wines that offer fantastic quality for a fraction of the cost.
For example, at Gary Danko, we wanted guests to see Veuve Cliquot yellow label at a great price, so we marked it up less than usual. On the list for a few dollars less than Veuve, we had a fantastic grower Champagne. This grower Champagne was better quality, from a better appellation, and cost us a fraction of the Veuve. It was easy for us to recommend the grower Champagne over the Veuve because it was a win-win-win: the guest would get a better wine, they would save money, and we would get an incredible margin.
Another tip about margin: you can build in a buffer to your margin by assuming that the cost of a case of wine is spread over 11 bottles instead of 12. Why? Because every so often, you'll need to give a bottle to a VIP, such as a reporter or friend of the owner's. Or maybe you need to open a bottle for a staff training every now and again.
This was a huge advantage for us at The Wynn Las Vegas, where VIP comps happened quite frequently, and staff trainings were a huge priority. If you don't want it to eat into the cost, using 11 bottles instead of 12 as your cost basis is a good buffer.
And if you end up not needing to comp any bottles, voila, you have 8% extra cost savings. As any Cornell graduate will attest, it's smart to keep your savings to make your program stronger. This simple change will increase the health of your program overnight.
These are just a few tips in hopes of saving you a little time in reaching your goals. And may you have a little extra time for fun during an incredibly busy summer season. Cheers to finding your balance!
Sincerely and with respect,
Alternately, you can just track what you give away. I think it is super easy for a staff to get carried away with the idea that it is okay to pour a free glass for a VIP or regular with no way to track it and therefore no way to hold anyone accountable.
I think this makes more sense. I have my bartenders run up a "comp tab" with a nightly limit so that they can comp a certain amount of drinks and it's all properly accounted for.
I apologize for my delay to your comment. Yes, you can track what you give away, though that is NOT alternately increasing your profit. Full stop.
You think it is super easy for staff to get carried away with the idea that it is okay to pour a free glass for a VIP or regular, that is a whole other subject in itself that relates to staff management and how much trust exists. Higher end establishments have high trust in their staff...lower end, not so much. So just to be clear this is a management practice. Holding anyone accountable is not related to increasing profitability. Just tracks it. And after you track it, how do you pay for it.
Any owner or restaurant owner worth their weight is well aware of accounting measures, though methods to increase the bottom line are always welcome.
This is about increasing profitability. Full stop.