Tuesday, July 10, 2007

Good Wine Under $75, or Is It Possible to Have Wine at a Restaurant without Having a Heart Attack?

I am catching up with all kinds of things, and one of them is my wine reading. I just checked out Lettie Teague's column in the July 2007 Food and Wine Magazine, which was enough to make me reach for the bloodpressure cuff. (image from Menumasters.net)

She was writing about the wine markups on your average wine list. These are typically--and for me, shockingly--2 to 3 times wholesale. That's some markup. If a wine costs $10 wholesale, and $15 retail in the wine shop, then in a restaurant you can expect to see it for $25-$30. And when I see a bottle of wine on a wine list for $25 that's actually worth drinking I am so grateful I'm often on the brink of proposing to the waiter. This seldom happens these days, so no need to worry about the waitstaff! Here's another little secret, however, to make you even more frustrated: restaurants sometimes purchase the wines for LESS than wholesale. Yes, less.

We're told this is absolutely necessary for restaurants to make their profit margin. I wonder. I really do. And I worry. Mostly, I worry about the winemakers. Because if restaurants think they're paying high rent, have you ever seen the monthly payments on a vineyard?

I worry, too, about what these wine markups are doing to the growth of "everyday wine culture" in this country. One of the best ways for folks to get to know different wines is to buy a bottle in a restaurant, decide they love it, and look for it later. That's how I first tasted both Twisted Oak and Anglim wines--at the Firefly Bistro in South Pasadena where their wine is actually priced reasonably! In most restaurants, it's become so prohibitive to buy wine that I usually don't even read the wine list except for the selections sold by the glass. I know this is the least economically sound strategy, but I would rather buy one vastly overpriced glass of wine rather than five.

I'm not sure there's much we can do about this, but if you know of a restaurant with a sensible wine markup and/or a good corkage policy, give them a shout-out in the comments section. For those of you in LA, Colorado Wine Company keeps a low/no corkage interactive Google map. And the aforementioned Firefly Bistro has an unusual and eclectic list with low markups, and great winemaker's dinners like the upcoming event on July 18. Here's to all the restaurant owners out there who make it possible for wine and food to be consumed at the same meal without requiring their diners take out second (or in LA, third) mortgages.

10 comments:

Richard A. said...

Legal Seafoods recently instituted a new policy on wine pricing. In essence, if you order a bottle of wine, they "guarantee" you won't find it for a lower price in any other restaurant.

There is more on it, and a link to an article on it over at
http://passionatefoodie.blogspot.com/search/label/Wine%20Prices

joel said...

I actually looked at investing in a wine bar (actually I have the business plan that I wrote on the bookshelf waiting for the day when I'm ready to change and kick back - great concept, timing was bad around 2002 no partners wanted to belly up at that time).

Its true that restaurants need a heavy markup because the FOOD is a money losing proposition. They really make their money on wine and alcohol. Supermarket or retail is typically 35-50% GM and restaurant is 100-200% (2-3X) GM. If the bar takes the burden of the operating expenses in a restaurant then they can make some money (which makes corkage a conundrum - pun intended).

Thats why a wine bar can be such a great business. Wine, light fare, and reasonable wine prices (under-cutting full service places but still making good money). Thats a good business. Rivalled only by Martini bars (far less waste as a percentage of sales because you can keep a bottle of vodka open for as long as you want). At to it the right atmosphere, some music, and of course, the right location. Not a bad business at all.

I'd be happy to discuss more. Maybe we can create a Blogger Wine Bar and everyone chip in for a piece of the pie...like I said - I got the B-plan and the location ;)...

Sonadora said...

It gives me palpitations when I see wines on the list where I know what it costs to buy it in the store and the restaurant wants so much more I could laugh. I most often see this with Chateau St. Michelle Riesling...it's on a ton of menus for $40, but can be found in stores for $10-$14!!! Especially at places that are more expensive and the bottle of wine rivals the cost of the whole dinner. Sadly, corkage is illegal in VA and few and far between in DC!

winedeb said...

I cannot believe I go into a restaurant and pay $8-$12 for a GLASS! And not even a full one at that! I like to go in, see what they do sell by the glass, as maybe I have not tasted that wine. Then I have to decide - do I try the new wines or spend my whole budget on a bottle! It would be nice if it was an easy decision.

Anonymous said...

Passionfish in Pacific Grove CA - wine priced at retail. Only place I've been to where they do that.

www.passionfish.net

JB said...

We also hate seeing overpriced wine lists, as well as ones with very little creativity. Take Ketchup in West Hollywood. It's criminal, what they're doing there.

We went to A.O.C. and found that the mark-up there is actually more reasonable than most places in LA. It's a very haute-wine bar but since passion for wine really drives the place, there are actually good and interesting wines available from $4 a glass on up.

Of course, we also think the wine bar thing is a good business idea. Bottle Rock in Culver City is an interesting model: it's a retail store, and you can open any bottle in the store as long as you commit to ordering two glasses. They then list the wine on a blackboard, offering it to other diners by the glass. The mark-up is not small, since they have to cover the bottle cost and then some with the first two glasses ordered. But there are benefits, as it gives the diner a much larger selection from which to choose a wine by the glass.

Joe said...

I hate the markups, and I generally hate the lists. Whenever possible I go to a resto where I can bring my own (a growing business here in Montreal) wine. Instead of paying $50 for a rather crappy selection, you can splurge, raid the cellar, CELEBRATE when you bring your own. It is very unfortunate to see this inflation. I just got back from France, and I was very impressed with the modest wine prices on the menus. Sigh.

Dr. Debs said...

Thanks first to Richard A. and to Anonymous for their restaurant tips. I always look for Legal Seafoods when I'm on the road on the east coast and here's another reason to do so. And Passion Fish--who knew? I spent 20 minutes reading their wine list and if I lived nearby I would have to have a seat named for me at the bar. As it is, I'm strongly tempted to take a roadtrip. But I'm with Sonadora, Deb, and Joe most nights out: yucky wine list, overpriced, I'd rather bring my own thank you (except that Sonadora can't!)

Joel and JB have some great responses regarding the reality of wine bars. I've been watching them proliferate all over LA (including Bottle Rock) which is pretty high rent as things go. I hope somebody takes you up on your offer, Joel, because the world needs more wine bars to help open up the wine culture.

David McDuff said...

dr. debs,

Living in Philadelphia, we see the worst and best ends of the spectrum when it comes to restaurant wine pricing. The worst end is directly attached to Pennsylvania's state controlled liquor system. All wine and spirits are sold by the state; only beer is privatized. This means that all licensees -- wine bars, restaurants, and neighborhood watering holes -- must buy their wine and booze through the state store system at prices that are only about 2% below full retail. This makes the under $30 bottle a near impossibility in PA restaurants, at least in those that care about what they serve. To compound matters, liquor licenses are quite expensive and, in many areas, difficult to come by. Add licensing costs to basic wine costs and the picture is grim. Most Philly restaurants with wine lists have an average markup of three times retail. Inexpensive bottles are often marked up even more.

On the beneficial end of the spectrum, the high costs of licensing paired with the prohibitive costs of trying to build a deep wine list backed up by a well-stocked cellar have created an explosion of BYOB restaurants in PA in general, particularly in the Philadelphia area. Professional reviewers and trade magazines tend to look down, or at least askance, at BYO's as being less than full service. For my two cents though, as an avid wine enthusiast, there's no better wine list -- and no fairer markup program -- than no wine list at all!

A couple of Philly licensees have bucked the high markup trend. Osteria, the second restaurant of Marc Vetri, has a small but diverse list of Italian wines with an average markup of twice retail. For a pretty high-end place, that's refreshing to see. Also, Friday-Saturday-Sunday, one of the few survivors of the city's original restaurant renaissance, has a long standing policy of adding only $10 to the retail price of every bottle on their list.

cheers,
David
McDuff's Food & Wine Trail

Dr. Debs said...

Hi, David. Wow. I grew up in Philly and am well acquainted with what the state store system does for consumers, but had never factored in what it does for restaurants. Leave it to folks from Philly to figure out that the silver lining is BYOB restaurants. I LOVE them, and there is a great Italian place near my parents where we can go with a bottle of chianti we picked out ourselves and have fantastic food. Friday-Saturday-Sunday has found a way to combat the system, too, and note it's always packed and (as you say) it survived where so many others failed. Maybe it was the wine??