But are you checking out mine?
I’m referring to our respective wine programs, of course, and there might be valuable information you’re missing by not paying a wine retailer a visit. I know very well why you might not have set foot in a wine shop in months, even years. I have managed the highest-grossing single location for retail beer and wine in Dallas, and before that I worked in restaurants. Dinner then was an overcooked grouper that had fortunately never made it to a guest’s table, washed down with a sample dropped off by a vendor. Where was the need to go to a store?
The value is simply this: visiting a wine store is an incredibly economical use of your time to gain information that gives you a competitive advantage.
Theme and Variation
Despite a huge advance in restaurant concept creativity, most establishments still fall into a certain theme or category. As a consequence, distributors pound wine buyers with the usual suspects; for example, if your menu emphasizes seafood, you’ll see Sauvignon Blancs and Chardonnays. In a quick visit to a fine wine shop, however, you can find options such as Argentine Torrontes, Spanish Dry Muscat, Luxembourg Auxerrois, or Australian Verdelho--- wines that may be buried or lost in your salesperson’s portfolio but are actually available for sale in your market.
The retail shop is also a resource to uncover vendors you didn’t know existed. Many smaller distributors simply can’t support the sales force necessary to make direct calls on all of the restaurants in town. But every distributor sells some jewel that could be an enhancement for your list. Most retailers will willingly share the source of a product you inquire about because they know you’ll send people their way who want to buy the wine they just enjoyed in your restaurant.
The Market’s Market
A wine-centric restaurant may list 300 to 500 entries---maybe 800 to more than 1,000 for an award-winning wine list. But if you’re a steakhouse-themed restaurant, those hundreds of entries may be comprised of long verticals, not necessarily unique selections. A good retailer can easily stock over 2,000 different wines. Admittedly, some of these are “jug” wines, but the breadth of offerings generally dwarfs most restaurant lists. And those 2,000-plus wines are a real-time reflection of what customers are buying.
A good weekend night for many restaurants is 200 to 300 covers. A high-volume retailer can see 3,000 to 5,000 people a day. The restaurateur generally hears from guests about service/satisfaction issues---not products. Retailers are hyperconscious of product and its space allocation and are not niche driven. They must cover a broad stretch of price points and selections. What this means for you is an immediate market analysis to help you hone or expand your list.
Retail x 2
No discussion of market opportunity would be complete without a word about pricing. Typically, retail wines run a 30 percent gross profit (GP) margin, restaurant wines a 65 percent GP. Roughly, wine list prices are twice retail. But how do you know that you’re just twice retail unless you actually go to the store and confirm?
Visiting the store is also a great way to become conscious of wines that currently have deal pricing. Wines the retailer “stacks” (displays in large quantity in the aisles of the floor) often have gross margins of 40 to 50 percent. The deal pricing that made these margins possible is also usually the wine-by-the-glass pricing for restaurants. And it’s not limited to bottles with colorful animals on them; even a “Top 100” wine can be had at deep discount. But did your rookie salesperson know and present that option to you?
If you think your job is mainly beating your distributor down for a bigger allocation of Silver Oak, then maybe visiting a wine retailer isn’t for you. But if you love wine and want the quickest way to get a snapshot of product and pricing in your area, come check me out. You might just learn something that will give you an edge over your competition and reinforce customer loyalty.
