brick and mortar bar exists mainly to ANCHOR a culture and tone for the barnd, gives us a place to run instagram, FB live, and other promo out of to create a perception (this is done VERY well in the coffee culture, more so than wine bars so far… but check our a place like Deus Ex Machina, Parlor Coffee in Brooklyn or Intelligensia or St Ali – coffee brands that have retail spots that push a LIFETYLE perception)
I would use online social media like Instagram with paid targeting to push the brand to the right consumers (targeting is awesome on the FB ad platform)
my main money would be the core business of having a wine club to capitalize on the platform I have… and I’d want our own label, ideally vertical integration (again like coffee where a roaster will have a brick and mortar as the face of that brand) where the vineyard is ours or in an exculsive rights arrangement. DTC and club is the best margin there is.
As I said, my profit center would mainly be our own label wines, with curated other selections too… but NOT the money we are turning at the bricks and mortar… that’s just there as a marketing anchor.
I had the same thought about this model sounding like V. Sattui. Also, many wineries I’ve been to in Northern Virginia seem to follow a model like this and sell almost exclusively direct to consumer. If you ever want to see a complete madhouse check out Barrell Oak Winery in VA about an hour outside of DC on a weekend afternoon (http://barreloak.com/).
Judging by the website, I see what you mean. I have never thought of that brand as having real cachet at a Napa level, but they are certainly doing what we said in terms of brick and mortar anchor a lifestyle brand that sells dtc at the back-end.
I actually think the Scribe people have a stronger lifestyle thing but they are not leveraging their brick-and-mortar opportunities as well as they could. I think they could become sort of a wine-version of Dean and Deluca if they wanted to, but focusing mainly on their own wines dtc as the main profit margin center.
I wouldn’t argue with the success of V. Sattui (though I personally find them several rungs below their Napa neighbors in wine quality) but I’d hardly call it a wine bar in terms of how this discussion started. It’s more like the difference between opening a craft beer bar that sells a range of beers at a ‘retail’ level and opening a brewery that has an attached bar (usually those only sell their own brews, but I suppose wouldn’t necessarily have to be limited that way).
The winery/brewery model is, to say the least, a lot more expensive to do and also requires more staff and or product knowledge. The profit margin on house product is definitely higher but the commitment is way greater.
Interesting way to look at the original question though.
I have owned 12 New York State Liquor Establishments in my last 45 years. A Federal Court would say I was an Expert! I made a few million here, and honestly, lost a few million in other places! I owned big rock clubs and disco’s to fine supper clubs and Mall Restaurants. “Wine Only Bars” fail because (90%) of these spots only sell wine that is too expensive for the General Public! Most individuals who open Wine Bars are semi selective Wine Experts and do not comprehend the working American! Wine Bars are wonderful but you must also offer great decor, a few lap tops, and a few table video games, plus excellent Draft Beers, (no bottles) and a short fare that is easy on the pocket book! With the minimum wage creeping up, it will be harder! I have two nice spots that I am looking at in the upstate New York area, if you are interested! Both are nice communities, and both have under $1500 per month rents! I am a little slower now at 69 years old, but I know what I know because I am on record for big money and my Liquor File at the New York State Liquor Authority is self explanatory! Good Luck, Dr. Mike Crafthttp://www.wineberserkers.com/forum/#
This thread was initiated over a year ago and my impression is that wine bars are on an upswing in general now. Ive seen many start ups across the country and theyre seemingly doing well. Yes, as has been stated herein, having at least small bites is the ticket.
In Europe, wine bars seem to be doing quite well, again with food also offered.
Board member Jim Coley has a champagne bar in KC and he`s got it together, again with small plates to complete the deal.
They fail when they have gnarly toilets.
But seriously, even if you have the location and demographic, where is the value-added? As others have noted, you can only mark-up a pour so much before the consumer is turned-off and there is no value-added because the consumer can pour the very same wine every bit as well at home. Contrast this to a chef who can take a simple 15 cent egg or 40 cents worth of pasta and create something the customer can’t do at home. We were in Pops Chicago recently. I think it succeeds because of a tremendous ever-present flow of foot traffic and the value-added is a cool place to hang out while waiting for dinner. It offers higher-tier appetizers/small plates and an atmosphere of luxury. Few can replicate that. The only other wine bar I’ve enjoyed is Oregon Wines on Broadway. Like most things in Portland, it possesses the “Portland Cool” factor. It offers both insider type pinot and popular pinot by the pour and retail sales of bottles and the women behind the bar are exceedingly friendly-they feel like friends by the end of your first visit. Again, very hard to replicate.
Mitch,
You hit the nail on the head. I’m never happy paying more than retail for wine. I’ve been to wine bars and I either have to pay ridiculous prices or drink lousy wine that I would never purchase by the bottle. A good chef can do things I can’t, a wine bar can’t add much to that glass.
I suspect another issue would be rent hikes. A successful startup is probably based in part in a canny location, affordable but up and coming. When it ups and comes rents go up and the margins evaporate.
From the other side of the counter as it were I look for ambience, a selection of interesting affordable wines I do not have at home, tapas or similar, good conversation including but not only about wine (owner or customers). For all those pluses, I’d pay more than retail.
That’s why you should try wine bars that have well-curated selections of small production wines and don’t charge ridiculous prices. The idea is to be able to enjoy a glass or(better yet a taste) of a wine you’d not be likely to fork over the price of a full bottle for.