Ben Zuba, wine director at the Rare Society steakhouse chain (part of TRUST Restaurant Group), believes that food is what brings people into a restaurant, but it’s beverages – such as wine – that keeps the lights on and helps make a venue profitable.
“With the margins as they are, a successfully planned wine program adds value and increases your restaurant's bottom line,” explained Zuba. “Wine costs vary by location, but knowing what the end goal is is key. This [wine] list is here to add revenue.”
To be profitable with a wine program, Zuba said bar and restaurant operators should build strong relationships with their portfolio reps. “This will allow you to stay on top of the best-case buys, one-off deals, and allocations,” he shared. “Focus on building volume orders that will allow you to offer wines with a great margin or with immense perceived value. At the end of the day though, the success of your list is directly connected to your staff. They are the ones selling to guests every service and are the ones attempting to carry out your vision. So, invest in them – conduct staff training, offer incentive programs, host weekly sales competitions – and keep them engaged and excited to sell your wines.”
Don’t Ignore the Data and Know the Costs of Your Wine Program
Michelle Bonds, founder of Trova Wine + Market, a wine shop and bar in Dallas, Texas, said bar and restaurant operators should never ignore the data, if they want to be profitable with their wine program.
“I am frequently analyzing our guest's purchases,” explained Bonds. “No matter how attached I am to a specific wine or a certain dish on the menu, if I find that something is not selling – or maybe it is a ‘one hit wonder’ where guests order it once but never again – that means there is something wrong. Data is essentially free feedback from your guests, and you often have it readily available through the back end of a good POS. Be sure to put it to good use.”
Chef Michelle Poteaux, owner of Bastille Brasserie & Bar in Alexandria, Va., and designer of the venue’s wine menu, pointed out that to be profitable with wine, operators need to know their costs – all of them.
“From the glass to the machine that washes them, the chemicals, the staff, the other overhead, it all factors into how you charge for your wines,” said Poteaux. “Standard industry is three-time markup or 30 percent, but I have even been burned when getting a bottle of something in a restaurant and I realize that they have marked it up 40 to 50 percent on cost; hello, I am in the business, too. It really makes me distrust them and what they are doing.”
Pay Attention to Your Wine Inventory, as Well as the Pours
Travis Hinkle, beverage manager and advanced sommelier at restaurant chain Del Frisco’s Double Eagle Steakhouse, advised operators to stay on top of their inventory as a way to be profitable with a wine program.
“A wine inventory is a big investment for the restaurant, even in smaller programs,” Hinkle said. “Make sure you are routinely taking inventory and keep a careful eye on your wine by-the-glass program. That is where most of the waste in a wine program lives. If you serve a six-ounce glass of wine, make sure your bartender isn’t routinely pouring a six-and-a half ounce. That extra half ounce per serving adds up over the course of the month.”
Bonds, of Trova Wine + Market, agrees that tracking inventory is key to profitability. “You need your finger on the pulse of which specific wines sell well and which do not," she said. "This gives you an idea of what you should be ordering and at what price point – or, on the other hand, what you should be removing from your list because your customer base is not interested. It also helps you identify and protect yourself from theft.”
Master Sommelier Scott Carney, dean of wine studies at the Institute of Culinary Education in New York, teaches that a restaurant wine list, above all else, is a sales tool to support the critically important “B” side of F&B – beverage revenues.
“Foremost, the [wine] program has to be profitable, so – depending on the market you serve – your mark-up for glasses and bottles of wine has to ensure that your bills get paid and that the business is not just spinning its wheels,” said Carney. “Bottle mark-ups are pretty straight forward but a wine-by-the-glass program can be a can of worms as one increases exposure with single glass pouring.”
Carney said a tool to help staff avoid over pouring by the glass is to have a glass of water with red dye placed at the service bar that’s filled to the correct amount. Each server can view the sample glass prior to heading onto the floor, as a way to ensuring pouring the desired amount.
“Even better, some restaurateurs will engrave their logo in the stemware so that the five-ounce/six-ounce pours of wine exactly meet the bottom/top of the etched logo, Carney suggested.
Make Your Wine More Accessible – Don’t Overprice It
To attract more customers and to be profitable with a wine program, carefully consider the prices on the wine list, according to Jeffrey Pogash, author, host of The Cocktail Guru Podcast, and a member of The Cocktail Guru, a collective of world class mixologists and hospitality experts.
“As a 50-year veteran of the wine and spirits industry, I am often dismayed by wine pricing, which seems to be on the rise once again, often to exorbitant levels,” revealed Pogash. “To be fair, not all restaurants are guilty of this, and I do understand that restaurants make much of their profit from wine, and that COVID has decimated the industry over the past five years or so. But good wine deserves to be enjoyed by the public at large and pricing wine to make it accessible is the best way to accomplish this.”
Helpful Tips for Being Profitable with Wine
Sarah Trubnick, a certified wine specialist, certified sherry wine specialist, DipWSET, and co-founder and wine director of the popular San Francisco wine bar, The Barrel Room, suggested the following tips for being profitable with wine:
- Prepare a detailed cost management system. “Don’t keep it in your head,” said Trubnick.
- Know the difference between theoretical cost and actual cost.
- Have periodic budget meetings related to the wine program.
- In terms of pricing, use a standard retail or restaurant markup when it makes sense, especially for wines under a certain cost, such as under $20 a bottle.
- Use a flat dollar amount markup for high-cost wines. “No matter what accounting textbooks want to say, inventory is not an asset,” Trubnick shared. “It’s a liability. You must sell it. Marking up high cost wines too much will guarantee they do not sell quickly.”
- Maintain a wine waste log.
- Reevaluate your wine list periodically and swap out wines that do not sell.
- Make sure staff is well trained, so they’re comfortable selling all of the wines from your wine list.
Aaron Kiel, based in Raleigh, N.C., has worked in the beverage, tea and coffee industries for nearly two decades, as well as hospitality and technology. He’s a journalist and writer/reporter at heart, but he also wears a PR hat through his consultancy, ak PR Group. He works as the editor of World Tea News with Questex’s Bar & Restaurant Group, as well as a contributing writer for Bar & Restaurant News. He also sits on the advisory board for the annual World Tea Expo in Las Vegas, which is co-located with Bar & Restaurant Expo. Connect with him on Instagram: @adventurer_explorer.
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