Tag Archives: restaurant wine

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Winebits 393: Meiomi sale, wine retailers, restaurant wine

Meiomi sale ? Winery consolidation continues: The wine cyber-ether was full of pontificating and prognosticating last week after Constellation Brands, third on the U.S. Big Wine list, bought pinot noir maker Meiomi Wines for $351 million. Most of the commentators were baffled by the sale price, which seemed like a lot of money for the winery, especially since it didn’t include any vineyard land. Still, it wasn’t that surprising, given that Constellation paid $160 million for Mark West, the $10 pinot noir, in 2012, in a deal that also didn’t include vineyards. Meiomi is on track to sell three-quarters of a million cases in 2015, making it the $20 version of Mark West (marked down to $17.99), and as such seems like a perfect fit for the strategy that most Big Wine companies are following. They’ll sell you an entry level product, and then they’ll sell you the next wine when you trade up, and they’ll make sure you will be able to buy both wines in a grocery store. In this, it’s no different than E&J Gallo buying J and The Wine Group buying Benziger — business as usual for Big Wine in the 21st century.

? Retailers and grocers: This otherwise run-of-the-mill post about a Florida liquor chain adding a couple of stores explained the expansion thusly: “[I]n a bid to keep the ever-expanding grocery store channel at bay.” Which means the owners behind Florida’s ABC Fine Wine & Spirits understand what’s going on, even if most wine writers don’t. Interestingly the chain is up to 140 stores, which is still 60 less than it had 15 years ago, and speaks to the power supermarkets have today in selling wine. One national wine retailer told me that grocers thrive on competition, which explains much of their success, and aren’t scared of it the way so many regional and local liquor chains are.

? Restaurant price gouging: One would not expect the New York Post, home to the legendary Page Six gossip extravaganza and headlines like “Four sex scandals rock one hanky-panky high school” to commiserate with anyone who buys restaurant wine. But reviewer Steve Cuozzo, in a story headlined “Restaurants overprice wine because they know you have no idea the pain” spared no punches. Restaurant prices “… can drive you to drink ? anything but wine, that is.” He does an excellent job of explaining the contradictions and discrepancies in restaurant prices, and you can almost hear a bit of sympathy. Almost, of course, because the piece ends with a restaurant charging $100 for a very ordinary $25 retail Bordeaux.

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Restaurant wine prices in Europe

restaurant wine prices in EuropeThe email from my friend visiting Spain not only waxed poetic about the wine, but about the prices: “Talk about cheap wine. Beautiful wine for ?12, and the most expensive bottle was ?24.” In other words, restaurant wine prices in Europe were U.S. retail prices — which is unheard of in the States.

This is not unusual. When my brother was in Sicily, he marveled at both the quality and the prices in restaurants, drinking Cusumano for more or less what I pay for it at a Dallas liquor store. I’ve seen the same thing when I’ve traveled to Europe; as one sommelier at a very high-end restaurant owned by a famous Spanish chef told me: “Why would we want to charge as much as you do in the States? Then people won’t order as much wine.”

How is this possible? After all, talk to most restaurateurs in the U.S., and they make it sound as if they’ll go out of business if they don’t charge $30 for a wine that cost them $8:

? Europe’s on-gong recession, and especially in southern Europe. If there is 25 percent unemployment, it doesn’t make much economic sense to overcharge for wine.

? The idea that wine is part of dinner, which is the way Europeans have always seen wine, and not something in addition to dinner, the way Americans — and especially American restaurateurs — have always seen wine.

? Better wine list sensibilities, where the restaurant sells wine to drink and not to impress high-dollar patrons or wine snobs. Or, as Jacques Pepin told me, why would anyone want to pay for Bordeaux when you can drink the local wine, usually of high quality, and spend less money?

? No three-tier system, which may be the most important reason. In Europe, there isn’t a distributor getting its cut, which can add as much as 20 percent to the cost of wine. The restaurant can order directly from the producer, who is often local, and enjoys supply chain efficiencies that we can only dream about here.

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Winebits 390: Restaurant wine, retailing, consolidation

Restaurant wine ? Less and less: The share of wine that consumers buy in restaurants, compared to what they buy in stores, has fallen by some 10 percent since the start of the recession, according to figures compiled by Beverage Information Group. In 2014, restaurants accounted for 42.2 percent of all wine sales as measured in dollars, down from 47 percent in 2008. By itself, this isn’t doesn’t necessarily mean that restaurant wine is becoming increasingly irrelevant, given that the recession was so long and so powerful. But given the recovery in the retail side of the wine business, it’s another indication that consumers, fed up with the poor quality and high prices on so many restaurant wine lists, aren’t buying wine anymore. It also speaks to what might be a significant change in consumer dining habits, that they’re eating at home more often and buying wine when they do.

? Honesty is the best policy: Shocking news, but a British on-line retailer says too many of his competitors artificially inflate their prices so they can offer lower “angel” discounts on wines that consumers can’t buy anywhere else, leaving the consumer with overpriced, lower quality wine. It would be better, says the managing director of WineTrust, to price honestly, the way his company does it. This is a not a problem unique to Britain, as anyone who has ever tried to understand U.S. grocery store pricing knows, but it is interesting that a retailer is calling out other companies for the practice. I can’t imagine that ever happening in the U.S., where price confusion is a key part of retailing.

? Getting even bigger: This is how crazy consolidation in the wine business is becoming. A buyout specialist is apparently thinking about taking over Diageo, the British wine, beer, and spirits company, in a deal worth more than $70 billion. To put that number in perspective, 170 countries have a smaller gross domestic product. Diageo, though wine is the smallest part of its business, is still among the top dozen or so biggest U.S. producers, with brands that include Rosenblum, Sterling, and Dom Perignon. There’s substantial doubt whether a deal gets done, not least because it’s so expensive. But that anyone is even considering it points to the mania for consolidation in the world today.

winetrends

Restaurant wine prices: A better way

Restaurant wine pricesWhat better way to follow up this month’s very popular post about escalating restaurant wine prices than with a story about restaurants that charge reasonable prices and sell more wine — and make more money — in the process? That was the theme of my piece in the current issue of the Beverage Media trade magazine, where one restaurateur told me: “We want our customers to be able to have dinner for two with a glass of wine each for $35 a person. ?

Revolutionary thinking in a world where glass of wine costs $10 and bottles are marked up four times their wholesale price, no?

The highlights of the article, as well as a few of my thoughts:

? The debate centers around volume vs. margin; that is, does the restaurant want to sell a lot of wine, or is its business model focused on the amount it makes per bottle? This margin approach, which has been the model most restaurants use, has given us the $10 glass. Not surprisingly, those who use it still see no reason to change.

? Yet an increasing number of restaurants see a better way. ?There is sort of this infrequently spoken gripe from consumers: ‘Why are we paying these kinds of markups?’… [T]hey are going to be cynical about your wine program.” says Stan Frankenthaler, chief officer of food, beverage and strategic supply for CraftWorks, which operates about 200 restaurants under 11 brands, including Old Chicago and Rock Bottom. That someone at a chain said this speaks to the failure of the margin model, since chains have some of the worst and most marked-up wine lists.

? A better approach: Pricing tiers, like 4 times wholesale, 2 times, and 2 times, based on quality and availability. If the wine is difficult to find, for instance, or offers exceptional value, we’re more likely to pay 4 times markup — and especially if we have legitimate, less expensive choices instead of grocery store wine masquerading as something else.

? This story includes advice from my pal Diane Teitelbaum, who died shortly after I interviewed her. ?You can sell a $100 bottle once a day, or you can sell $20 bottles of wine all day and all night,” she told me. No wonder everyone misses her so much.

 

 

winetrends

The most popular restaurant wines

restaurant winesOr, to phrase it more accurately, why the most popular restaurant wines aren’t wines that most of us drink. Which is not surprising, given the way too many restaurants treat wine drinkers.

The tipoff, of course, is price: Only one of the top 10 wines in the annual Wine & Spirits poll retails for less than $20, so by the time you add restaurant markup, we’ve passed that all-important $20 threshold. That’s the price that 95 percent of Americans who buy wine won’t cross. The average price for the top wines are ridiculous: $103.50 a bottle, up more than 20 percent from last year, and almost $13 a glass. That means one bottle is almost enough double the price of dinner for two at a nice restaurant, and who wants to do that?

Is it any wonder, then, that restaurant wine sales have not returned to pre-recession levels, and that one restaurant executive has criticized what he called restaurant complacency, adding “We see early warning signs for wine in the restaurant business. We may say, ?wine is best with food, ? but that isn ?t what our customers are telling us.”

Which is what the Wine Curmudgeon has been saying for years; that someone in the restaurant business agrees with me is welcome news. But does it matter, or is that complacency too much to overcome? I’d argue for complacency, based on the poll results. Eight of the 10 best-selling wines are the same as they were 10 years ago, which is hardly different or unique. And, to add insult to injury, the best-selling sparkling is Veuve Clicquot, about as hip and with it as I am.

Also depressing: Sommeliers, both here and elsewhere, keep insisting that they’re trying to make restaurant wine lists more interesting, but that doesn’t come across in the survey. Gruet, the sparkling wine from New Mexico but which is now made with California grapes, hasn’t been interesting for years. But it’s the third best-selling bubbly by the glass, as if the cava and Prosecco revolutions had never happened.

In this, restaurant wine is the trendsetter in just one thing: That wine is becoming increasingly splintered, with the focus on selling to the elite and leaving the rest of us to fend for ourselves.

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Winebits 376: Apothic, restaurant wine, wine consumption

apothic ? A revolutionary product? Gallo’s Apothic, which revolutionized sweet red wine when it was introduced in 2007, may be doing it again. The company has released Apothic Crush, a slightly sweet red wine with 14.5 percent alcohol. In this, it appears to be the first sweet high alcohol wine that actually admits to being sweet and high in alcohol. For most of wine’s history, sweet table wines had less alcohol than dry wines not only because that’s how fermentation worked, but because no one thought consumers would drink a high alcohol sweet wine. But that has changed, first with the trend toward riper, more alcoholic wines, and second, with improvements in winemaking technology. In this, who knew Robert Parker, who has championed riper, higher alcohol wines, would pave the way for a Gallo product? Or, as the noted philosopher Mick Jagger has said more than once, “You can’t always get what you want/But if you try sometime you find/You get what you need.”

? Less hope for wine lists? Is the end coming for the independent restaurant? That may be one of the conclusions from a recent study, which found that the number of independents fell by two percent in the U.S. in 2014, and that the number of full-service independents dropped three percent. Chains, meanwhile, continued to grow in the low single digits. Why does this matter to wine drinkers? Because those independents, and especially the full-serves, are the last best hope for improved restaurant wine lists. Chains usually don’t care about wine and make decisions in a corporate office based on price, which means they have the crummiest and most overpriced wine lists. Independents, for all their problems with wine, generally do a better job than chains. So any drop in the number of chains should be worrisome for wine drinkers who want choices that aren’t from Big Wine.

? Beer, wine, or spirits? This chart, from Ghost in the Data, should answer all questions about whether the U.S. (or any other country in the world) is a wine drinking country. We’re not — it’s still beer. In fact, save for part of western Europe, the world is mostly indifferent to wine. This is something my colleagues in the Winestream Media should pay more attention to, instead of patting themselves on the back because we drink more wine than any other country in because we have more people than France and Italy.

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Winebits 364: Corks, liquor stores, restaurant wine

restaurant wine ? When will they learn? The cork business, as has been noted previously, doesn’t understand wine in the 21st century. And their problems with quality control haven’t helped, either. Hence yet another new cork campaign, as related by the Los Angeles Times. to reassure the world that their product is still relevant. Which makes all the same mistakes. The biggest? That the cork people continue to insist that only crappy wine is closed with a screwcap: “Any wine worth its grapes deserves natural cork.” Which hasn’t been true for decades, and is no more true today. This is a very well-done piece of reporting by the Times’ David Pierson, and includes the best numbers I’ve seen on cork’s share of the wine market: Down from 95 percent to 70 percent over the past decade, with screwcaps at 20 percent and plastic cork around 10 percent.

? Bring on the liquor chains: Want more competition for your wine dollar? Then you’ll be glad to hear that a Canadian retailer called Liquor Stores N.A. wants to add to stores and states to the 36 locations it has in Kentucky and Alaska. Shanken News Daily reports that the company has identified possible sites for expansion, and has hired executives away from Walmart and Total Wine and More to oversee the process. The chain expects to carry as many as 8,000 wines in its new stores. If Dallas is any indication, another national retailer with deep pockets will help keep wine prices low.

? Where’s the wine list? The Chicagoist website looks at restaurant wine lists, why they’re rarely mentioned in reviews, and the idea of restaurant wine in general, and includes this: “Let’s face it, there are a few too many wine professionals out there who come across as being pompous and arrogant (if not full of shit).” And this: “This is why we need intelligent wine writers to help guide us and give us some tips. And most importantly, we need writers to remind us to forget trying to know everything but, rather, to have an open mind and experiment and enjoy. Which are just two of the highlights in the interview the site’s John Lenart does with Chicago restaurateur Tom MacDonald. It is honest, accurate, and speaks to the problems wine has in restaurants. Would that people in the wine and restaurant business paid attention to it.