By Zoltan Szabo
When constructing a wine and beverage program, there are a number of important factors that come into play. Whether it is budget or knowledge of your clientele, creating a compelling wine list is about more than following trends or setting prices based simply on profit margins. The more you know about the wines you sell and why you are selling them, the better your beverage offerings will be received.
In addition to deciding on a budget, there are many other critical factors to consider when setting up your wine program. Style of establishment, food compatibility and demographics are just a few of the key components to keep in mind. Staff training is also crucial — the more your staff knows about your wines, the more they will be able to provide a great experience to patrons, sharing with them the story behind the label. Proper storage is also something worth worrying about, so that beverages are kept properly and that their serving temperatures are correct. Finally, glassware, decanters and various tools of the trade all cost money and must be built into the markup strategy.
Having said that, I recently interviewed two highly successful restaurateurs who shared their approaches to creating a wine program with me.
Niall McCotter, Cava and Chabrol
“When building a beverage or wine program I start with context above all,” says McCotter. “Context of the restaurant, theme, cuisine, location, clientele, and obviously price. It should be relevant and specific without being condescending or too obscure. The world is awash with beautiful wines and spirits so I’m never particularly concerned with being pigeonholed by any of these parameters. In fact, it brings focus and clarity to the process.
“In regards to mark-ups on alcohol, it’s a very simple explanation. Right now, there is nowhere else to go. Restaurants sell essentially two things: Food and alcohol. For whatever reason, we cannot price the food portion of the experience as it should be. It strikes me as the only business in the world where inflation and the ability to react to increased costs has ceased to exist. If we were to charge for food accounting for inflation, other inputs, and constant downward pressures compared to 20 years ago, main course prices would be perceived as absurd. If your average restaurant were to price food as it should be they would be sunk.
Easy targets
“Wine mark-ups are easy targets for those who want to focus their displeasure at the idea that some restaurants do not provide good value for dollar, simply because it’s so very easy to discover the cost of the bottle presented. The goal at our establishments is to vanquish even the slightest chance of that displeasure with the quality of the overall experience. All customers should walk away thrilled.
“I know the cost of 99 per cent of wines on most wine lists in the city. But I also know the costs behind the scenes that make the price necessary — rent, taxes, insurance, talented chefs, talented sommeliers, company benefits, napkins, crystal, silverware, plates — the list goes on. The average patron does not know these things so the optics of a 200-300-per-cent mark-up is scandalous. I don’t blame them for being disappointed and cynical when all they see is the scandal. But hidden in that mark-up is where we live, and employ, and pray to make a living.
“It is a thrilling, grueling, and utterly satisfying business to be a part of but at the moment those mark-ups tend to be where those prayers of restaurateurs and those they employ are answered.”
Ed Ho, Globe Restaurants
“Going for dinner is not about eating and drinking,” says Ho. “It’s an experience. Food, beverage, service and ambiance all are important and necessary components of that overall experience. For Globe Bistro, we built a framework based on our philosophy: Think global; Eat local. And this includes drinking locally.
“We are a finer dining, full-service restaurant with a busy patio/wine bar business which is a little less formal. We also operate in Riverdale in Toronto, which a great neighbourhood with great dinner and brunch traffic, but less lunch business and business clientele. More than 50 per cent of our guests are regulars who come in more than once a month and live within three km of the restaurant. Most of our guests are open to suggestion for wines overall.
“With all that in mind, we have created a large wine list with a local focus. Well more than half of our wine list is from Ontario. We have at least 12 wines by the glass which are all from Ontario to pair with our dishes. Some guests still refuse to drink local wines for whatever reason and we are always willing to open any bottle if a guest wants a couple of glasses.
Supports local economy
“From an economic standpoint, most of the dollars we spend on wine and food go back into our local economy. For the most part, our supply chain is direct, or only one middleman in the distribution, so the dollars go to the winemakers and farmers directly, which they reinvest in their business and to their employees.
“When it comes to pricing, we aim for a wine cost of goods that is generally about 35 per cent. That implies that we have an average markup of just under three times on our wines. Our lower-priced wines are marked up more than the expensive wines, but it averages out. Our average wine bottle price sells for $60-$70.
“We seek out and taste hundreds of wines every year to find what I call ‘wines of value.’ We taste wines blind. We buy the wines that are the best values relative to their cost. By going through this process, we have first-hand tasting knowledge of the wines which we can then share to educate our team and guests. We also reduce the chance of disappointment for the guests knowing that the wines we have are good. This is especially important for our local wine program where vintage variation is a major issue.
“We have a good number of high-end wines for guests that are so inclined, but investment in a deep vintage cellar a real drain on capital as the turnover of these wines is obviously lower than the bottles in the lower price range that are ready to drink. In fact, on Sundays we even offer half-priced wines to ensure the turnover of many of the higher-end bottles.
“Lastly, printed on our menus we have a suggested wine pairing with each and every dish. Wine training is also very important. Adrian Amara is our GM is also a trained sommelier who both suggests wines for guests and educates our staff on the wines that we carry and pairings as well. As an extension to this, we offer winemaker dinners and tastings where guests can discuss wines directly with the people who work hard to make an exceptional product. Our guests love to understand our connection with the products that we represent. All of these things combined — buying and pricing for value, education and pairing and understanding the guest’s needs — all help create a positive experience for the guest.”
About the author:
Sommelier Zoltan Szabo is a hospitality consultant offering wine sourcing and staff training services to restaurants. Check out his website www.zszabo.com or follow him on Twitter @zoltanszabo. E-mail Zoltan at [email protected].
