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.

2 thoughts on “Winebits 390: Restaurant wine, retailing, consolidation

  • By Marie - Reply

    The decline in restaurant wine purchases also points to the growth and improvement of restaurant beer lists.

    If I can have a glass of something tasty and interesting, at half the ABV of the average wine (meaning I’ll get home safely afterward) and often for half the cost for the same amount of liquid…I may well think twice about ordering the wine.

    Cheers!

    • By Wine Curmudgeon - Reply

      I thought that too, but the irony is that restaurant beer sales, as a percentage of overall beer sales, also declined.

      Which means there is beer price gouging going on as well, and the restaurant business is in big trouble as people stay away after the recession.

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