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,
"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."
I couldn't disagree with this more.
I agree Josh, it's a good way to leave some dollars on the floor. Price gouge the well known wines so you can sell the lesser known wines. People will feel more comfortable when they see the well-known wines, not when they are well priced. Why would I bother with something I don't know when I can get the famous wines for cheaper than usual.
I'm not sure I agree with this. When I went to a sushi restaurant and saw Kim Crawford SB for $13/glass (in NC), it really put me off buying wine from their BTG list. And this was long before I was a wine buyer. I was just a customer.
In this context I think people are thinking less of Sauv Blanc BTG and more of Silver Oak BTB
Sure, but it's the same thing. If I saw Silver Oak Alexander BTB for $200, I'd be equally as put off by the restaurant's wine pricing.
Whereas if I saw Silver Oak Alexander for $120 or under, then I would feel more confident that the entire wine list is priced fairly, and would feel better about choosing a more obscure wine that I'm not familiar with, should a server recommend it.
I was just speaking from an experience where that actually happened.
I think that's fair
So what do you do once you're put off by the pricing? Do you choose to drink something else than wine?
Perhaps - it would depend on the restaurant's food and whether I really wanted wine with it or not. But if it was food that begged for wine, and unless it was the BEST restaurant in Raleigh, I probably wouldn't go back. We have many other great places to choose from (not that I get to go out all that much anyway) with fair pricing, based on the market.
Let's say you do decide to order wine, and since we're talking Napa Cab you get a Truchard 2015 and pay less than $70 for it. You still think the pricing isn't fair?