I remember another thread on/related to tipping at BYOB which helped as I moved to CA from TX(no corkage allowed if you have a spirits license).
It’s almost always a struggle to buy a bottle at a restaurant because the price, so BYOB has been huge for me to enjoy wines at the restaurant. But also understand that impacts their economics. The price of going out for just food in California is still insane and certainly has made it harder to go out more often. If I can see the bottle list ahead of time makes a big difference.
I kind of skimmed the whole thread, so apologies if this is already here, but I think the importers and the insane wholesale price increases are ham-stringing beverage programs. The inefficiencies of the wine market have meant that, in the past, 3x wholesale of certain rarities could be at or even below market values. Take Rousseau Chambertin as an example. In five years, wholesale went from around 500/per bottles to 1800/per bottle today. The 2014 could be listed at 1500 and look cheapish (even on release), the 2019 would be 5400 on the same mark-up now and it would look preposterous. As such, more and more of these rare wines either sit on lists or the restaurants don’t even take them. This trickles down and can be even worse on lesser bottles. Take Mugnier Marachale… at $70 wholesale, a Mugnier at $210 looks like a fun night. At $135 wholesale, $400+ is a real commitment.
I empathize with the restaurants here. But as noted, not being beholden to traditional margins would seem to be a more salient strategy these days.
If you are marking up indiscriminately on a pro rata percentage, I have almost no sympathy if your sales dry up…it almost seems like you’re unaware of demand elasticity or simply don’t care. Live by the sword…
Here I think it’s unfair to use the blanket statement. To be sure, some importers push it on some items but it isn’t always the pure cause of escalation. Whether it is the supplier, the wholesaler, the restaurant or some combination of the three, they often wouldn’t be able to get away with that if people didn’t chase labels so hard.
Tricky and complex subject. Just as large wine companies continue to grow through acquisition, so is the distribution side of the business. We have a smaller number of distributors than ever and they have grown quite large with a lot of power over the trade. Many markets are not competitive at all. This reality also makes it very difficult for smaller artisinal or start-up wineries in many markets. We consumers suffer for it.
But they are no longer getting away with it. Formerly allocated wines that were desirable are being rejected by accounts all over the country. And, as such, labels are not being chased nearly as hard. Many importers have decided that the ceiling should be the floor, and supply is outstripping demand without a base of lower priced buyers. We are just beginning to see this play out.
What markup should an importer use? Roumier Bonnes Mares is 400 eruos from the domaine. US wholesale is at least 1200 (and that importer self-distributes). This is not about pushing… it’s about killing the system from the ground up. This is why so many importers are looking to go consumer direct, isn’t it?
I won’t postulate on the market awareness of wine buyers at restaurants, but I would speculate that it would be easy for a wine buyer to not realize that the allocated wine that was an auto-accept no longer makes financial sense at their employed model before finding themselves with a large amount of stagnant inventory.
Not so sure about “than ever” but it does look like numbers are down from pre-pandemic times. I got out slightly before that and couldn’t help but feeling thankful I didn’t have to try to survive through that period with so many restaurants closed or otherwise restricted.
That recent figure about Southern selling one our of every three bottles of wine in the US was staggering, especially considering the size of some of the other sizable players that are still quite powerful.
For all the talk and reality of a wine glut, I keep wondering why the consumer isn’t benefitting more. As always there are still relative bargains to be had but I am puzzled why consumers aren’t benefitting more from all this. Even if distributor numbers are down, there are still probably too many and obviously there is still a flood of good wine sloshing and stagnating in the system.
When you say benefit to the customer - who is the “customer”? Most businesses lose sight of that definition.
In retail I think most customers are either “I want red/white can the store clerk help me” or they know exactly what they want and will price shop. I am not sure there is much of a middle ground? Working very few hours in a retail wine store recently I am sensing these are the two major consumer groups (at least in our store).
For restaurants, There are customers willing to pay 3x. You need to find/market/attract them to your establishment. You can also find/attract the BYO crowd if BYO is legal and make a business out of that.
In any business, you need to know your customer and have laser focus to attract and retain that customer. And not everyone can be a customer for every business, and sometimes that is why businesses fail, they try to be everything to everyone. If you can sell wine thru at 3x to your customer base that’s great. If not, maybe selling it at 1.5-2x gives you more throughput and more revenue based on volume.
I think we are toward the back end of a long stretch of ‘irrational exuberance’ which often foretells a market correction. Too much of the trade has come to believe its own BS. As a one-time consultant focusing on customer behavior, I can assure you that every consumer wants value for their money. This not the same as lowest prices, but not matter how affluent someone is, they don’t like to be ripped off. I understand that when someone buys a trophy wine they are actually buying an experience. But then, there are the rest of us…
It’s not 3x but on beer forums do people say they don’t drink beer at restaurants because it’s cheaper to buy a case and drink at home?
I’m being serious and not saying you have the answer.
To me a good cocktail is the only thing usually worth a 3-5x markup if it’s quality ingredients and a lot of them as I don’t have a fully stocked bar at home with all the bitters and syrups and random liquors it could take to make something “unique”.
Maybe so. But unit volume may continue in the opposite direction. Think ‘total revenue’ for the wine portion of the business, rather than gross margin %s. Not many demand curves point upwards. Maybe a few trophy bottles, but that’s about it.
You think a glut in the wine business would cause a decrease in wine pricing - but in many cases, it’s caused restaurants and wine shops to get great deals that don’t necessarily get passed down to the consumer.
Just like the Napa pricing mentality - a) things never go backwards and b) if I price it cheaper, folks will think it’s ‘inferior’. - I think BTG and cocktail pricing is here to stay. I don’t see either of these categories reducing pricing in most cases over the next 24-36 months.
The percentage markup on beer, soda and bottled water are higher even than wine, but the prices are much lower so it’s far less offputting and significant to diners.
