Grind your gears: the Silicon Valley Bank wine report is out

I’ve tried it all. Nothing seems to sit well any more.

Round Up is one of many. But it’s the only one that has billions of dollars in judgements against it.

Why are you so confident the arsenic comes from Round Up use in vineyards? This article discusses a study suggesting the higher arsenic levels found in Washington wines may have been from “pesticides” used on the orchards that were there before the vineyards. The bulk production regions of Washington and California are so arid, it would surprise me if they’re applying Round Up regularly. Are they?

Plus, there’s arsenic in the ground in a lot of places. The article above mentions that as the common source in food products. Remember the arsenic in rice scare a few years ago? I don’t think Round Up is used in rice cultivation, at least not commonly (only looked this up briefly, happy to be corrected).

Haven’t all of the successful lawsuits against Round Up been cases of injury to people applying it and working in the fields while it’s applied, without proper safety protocols? That could be a problem for copper sulfate too, if I remember correctly, and that is used so widely. People much more knowledgeable than me (including Wes) have repeatedly said Round Up is pretty tame compared to some of the other treatments being used, at least in terms of health impact on the final food/wine. I’m not convinced Round Up is a problem at all with wine for the consumer.

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3-4x is nothing these days here in SF…I saw a bottle of BarDog California Pinot for $63/bottle at a Fillmore Street restaurant in SF…that’s an $8-10 wholesale bottle for $63. Insane.

Four doors down I paid $16 for a glass of grechetto that could not have been more than 3.5oz…I politely asked the server about the short pour and her response was “sorry, I don’t pour the wines” and quickly walked away. The same bottle of wine was $16 retail I saw afterwards…not going back there anytime soon.

anyhow, I think this is a major reason younger drinkers don’t drink wine…the markups are insane and all to often the list is full of mediocre wines placed there by whatever big distributor is printing their wine list for them. Just give me a Ketel one martini neat.

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I need to be a bit clearer, this isn’t an either or, and if I made it seem that way, I’m sorry. All of these herbicides and pesticides are awful. There is a grouping of futures I can’t eat, and it’s directly linked to the pesticides they use on them. My throat closes up, and I could die. All things that I was capable of eating when I was a kid, but due to whatever the heck happened with these pesticides, I can’t eat a whole bunch of different fruits.

I haven’t run a restaurant, but I know margins are very tough to manage, but it always seemed to me that common sense with wine BTG pricing would be to work out a flat markup rather than a percentage markup. If you’re making five to eight bucks on the beer or cocktail, add five to eight bucks to the wine BTG instead of something crazy like 12 or 15. of course, the math is probably based on people generally drinking less units of wine BTG compared to beer or cocktails. so might as well soak them for as much as you can if they’re only going to have a glass or two anyway.

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Running a restaurant is super-tough no doubt. But 600-700% wine markups are insulting and bad for their business (I won’t go back to either place) and the wine business in general in the long run.

Poor quality, over-priced wine lists are a major reason why more young people don’t drink wine.

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Mega-Purple is the vinous equivalent of truffle oil. It only gets used by two types:

  1. corporate chefs trying to make Sysco ingredients into fancy food

  2. chefs that don’t believe in their dishes enough to let them stand on their own merit.

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All of those things are probably true, but you can also probably put responsibility for them at the foot of the landlord. Or in Oregon, you can add in the lack of a tip credit. I worked front of the house and it makes no sense that an employee(me) making $150-200 in tips(in 2002 dollars) should get paid $9/hour plus the tips, especially while the kitchen staff are making $12/hour with no tips (also 2002 dollars).

That sounds terrible; I’m sorry you have to deal with it. I try to eat mostly organic and choose smaller farms when I can because I’m concerned about the variety of chemicals. At the same time, I think Round Up may not deserve all of the blame it gets.

Jason,

What you don’t account for is beer and spirits don’t have waste whereas wine has waste between 20 and 80% that needs to be accounted for due to oxidation once opened.

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There is a company sort of doing this, called Obvious Wines. I have not personally tried any of their stuff though.

Picked up in the NYT:
The American Wine Industry Has an Old People Problem https://nyti.ms/3WESACM

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Asimov has a good observation, that, at the lower price points, Old World wines still offer family owned, single estate, AOC/DO/DOC badged wines. Consumer who take the effort to learn what labels mean, or find a trusted retailer to filter those for them, can get a little more value that way.

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I can’t but help think though that a root cause of so much of the decline in interest in a discretionary luxury like fine wine is related to the reduced purchasing power that younger people suffer nowadays. They are saddled with student loans, high health insurance premiums (that they don’t really get any benefit from assuming their youth=health), escalating housing costs, etc. It’s just anecdote, but most of the younger people I used to work with had NOT passed any of the traditional life milestones that I would have at the same age e.g. positive net worth, home ownership, family formation etc.

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There’s a lot of vectors leading to things slowing down in the industry, though I haven’t seen a slow down in demand, rather it’s a lack wine from 3 poor sets in a row that is our issue.

But my personal cellar is bursting at the seams, and I am far from the only one complaining about that. A LOT of us bought a LOT of wine during the pandemic, and even though I would like to continue buying at the same rate, I can’t. We simply don’t have room, so our purchasing is down by about 75%.

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BUT, that’s a sort of chicken and egg situation. Insane markups lead to lower sales and more waste. A good wine program with reasonably priced fun, enjoyable to drink wines - including some novel wines and wines that go especially well with the food, staff that are actually familiar with the wines and decent wine service - can lead to a high volume of wines sales. Like I said above, I see places like that were there’s wine on pretty much every table. If you’re going through multiple bottles of a wine each day you don’t have much waste.

Doing this, making your wine program into something that makes customers want to come back, want to come back often is good business. A lower margin, but multiplied. Something to bring you to full capacity on “slow nights” works down fixed costs and increases server tips.

What Marcus said about back of the house not getting tips doesn’t have to be true. There’s an industry mentality that recoils at the idea of pooling tips, but done well everybody wins. There’s often a lot of resentment among staff. I’ve seen it really bad, where deliberate lack of cooperation causes poor customer service. I’ve seen pooling work well, where everyone works as a seamless team, where runners, other servers, the manager, etc. help bring out food the moment its ready. The level of excellence across the board kept this place at max capacity for the entirety of every shift, and that didn’t change in economic downturns that savaged some other restaurants. They had a formula where the server kept a certain percentage (60-70%?) and the rest went into a pool that allocated varying percentages to chefs, runners, etc. And, guess what? The average tip was 30% of the bill. With the same level of food, but typical service and a typical wine program they would not have been full capacity and tips would’ve been around 20%. The staff were all veterans, so they knew they were making more money in a much better working environment. (And it’s rewarding having a great base of loyal regular customers who appreciate what you do.)

I have been selling wine for 22 years and have consistently pitched programs around BTG at 3x bottle cost divided by 4 with a bottle the cost of 3 glasses and then taking your top profit BTG pour and using that for your bottle markups…if you make $35 on your top glass pour and are happy, then why wouldn’t you be happy with selling a $50 bottle for $85?

Accounts that focus on cash flow vs. pour cost always did well.

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Sorry Wes, you are correct about tips being spread out to include kitchen.

But my post was referencing a time when that wasn’t really the case, and I should have noted that tip policies are changing.

It is surprising that more restaurants don’t look at this. Straight percentage mark ups are very imbalanced with more expensive bottles. And as Wes noted if you have a well chosen list with moderate mark up you can stay busier. One of the big restaurant killers is having staff on and not being busy enough to utilize them efficiently.

Inventory is the killer, wine, spirits, beer, food, followed by waste.

We did so many cool wine lists where restaurants sold wines they never thought they could when presented with $25-35 a bottle profit and ripping the cork out andnleaving the bottle on the table…servers made more too. Not sure if u recall the Roanaoke on Mercer Island, but you could get a bottle of Teldeschi Zin for $45 and a basket of wings for $15 and saw so many tables with a $60 check that spent $35 before.

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Sacrificing margin for volume is something so many restaurant people say can’t work. I understand that for a lot of fine dining, they don’t turn tables fast enough or have the capacity for it to make sense. BUT, I’ll repeat something I’ve posted before, partially because Sandy passed recently and the era is over at the restaurants.

Legal Seafoods is a local chain. They’re large places with great quality seafood, served in mostly very standard preparations (there’s a section of the menu that’s more creative), that’s super consistent but a bit overpriced. Paper placemats, staff so large it’s impossible to have everyone really well trained all the time, etc. Years ago, Sandy Block took over the wine program for the chain. He decided to put out a list of well-chosen wines that paired perfectly with the food at extremely reasonable prices. Glass pours were much less expensive than is standard, and bottles were too. Part of this was skilled negotiating, using that huge buying power, and part of it was working at lower margins. Despite the high turnover of a large set of staff, your server could always either answer basic questions about the wine, or in rare cases, quickly get someone who could. Bartenders and managers knew the list quite well. They sold enormous amounts of wine and it improved overall beverage profits significantly. It’s tough to get management to look at dollars profit rather than that COGS percentage, but it can work.

Sandy was really an icon in the Boston wine scene. He changed the way things were done, at least in his world, for quite a few years. Many of the wine nerds I know, including people who work at fine dining restaurants, and me, would go to Legal regularly to get decent, slightly overpriced food, with really good, extremely reasonably priced wines. High end bottles would be retail + 50% at most, often less than that by a good bit. They’d have Timbach Frederic Emile and Bollinger Grande Annee at a lot of the regular locations, as a couple of examples. The flagship restaurant in Boston had white Burgundies going back to 1945, multiple vintages of aged Clos Ste Hune (priced way below retail prices at that point), and lots of other goodies.

Sandy stepped away from that position a while back. After that, the chain was sold to a restaurant group that did not see the vision of that really cool wine program. Sadly, it’s not what it once was.

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