The SOMM Journal

February/March 2015

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Page 39 of 92

{ }  39 more for wine in a res- taurant than they would in a retail store. Then again, restaurant owners tend to get extremely resentful when you don't hit your bottom line. So what are the options? In the 1970s, at New York's legendary Windows on the World, Kevin Zraly began to implement a markup system designed to stimulate sales of higher-quality wines by pricing them on a steep curve: lower cost wines marked up the highest in order to generate the most revenue, and higher priced wines marked up the lowest in order to stimulate interest. The exact system proffered by Zraly: No one, at that time, sold as much wine as Zraly. Windows on the World may have been an extravagant restaurant, but guests could get an extravagant wine experience for a fair price at Windows. But since those glory days, the bottle (i.e., whole- sale) costs of wines have obviously increased dramatically—the lowest cost wines sold in today's fine dining restaurants start at $10–$19—and sales of ultra-premium wines by-the-glass are a much bigger factor in our programs. Thirty or 40 years ago, glass programs usually consisted of generic "Burgundy," "Chablis" and Rosé, and given that unsavory option, wine drinking guests were deliberately "pushed" into buy- ing higher-quality bottles. It wasn't until the late 1980s that "fight- ing varietals" (in those days: Chardonnay, Cabernet Sauvignon and White Zinfandel) became prevalent in the industry. Alternative wines by the glass—such as Pinot Noir and Pinot Gris, or high- quality imports, from Albariño to Zweigelt—didn't pop up on our radars until the mid-1990s. These weren't good ol' days—these were downright dreary days. Given today's welcome changes, this is a basic model demon- strating how Zraly's sliding scale might probably work in 2015: In the contemporary model, the blended cost of glass plus bottle sales typically hovers between 31% and 35%. A big nega- tive is the reliance upon higher markups in the glass program; if this is something you are not high on—there is a lot to be said for reasonable glass prices, especially if glasses are as much as 80% of your sales—the only alternative is to keep glass prices down by increasing markups on bottles in order to end up at a 31%–35% blended wine cost. If you are reluctant to raise bottle prices, overall blended wine costs could creep up to 40%. But if your boss is unsympathetic to 36%–40% costs, the remedy is to do the math, and make the proper adjustments in order to establish a curve that works for your restaurant—your balance of glass vs. bottle sales. Wine sales, of course, are never driven by price alone. It always involves savvy selection, intelligent merchandising and relentless training. If you do the work, you make the sales. Zraly, for his part, has often been quoted to say that out of the thousands of wines that he would list at any given time, 80% of the sales always came from only about 40 selections—the rest was "window dress- ing." This probably holds true today, even in the most successful restaurants. Knowing that, it makes sense to maintain the strongest focus on your 40 or so core wines. If these are the wines that sell the most, make sure these are the wines that are most simpatico to your cuisine, most representative of your identity and, above all, most likely to meet your boss's profit objectives. "If you do the work, you make the sales." Bottle cost % Cost Bottle Price Profit $2 33% $6 $4 $4 40% $10 $6 $7 45% $15 $7 $10 48% $21 $11 $20 57% $35 $15 $40 62% $65 $25 Bottle cost % Cost Bottle Price Glass Price $6–$10 25% $24–$39 $6–$10 $11–$15 28% $40–$54 $10–$13 $16–$22 31% $55–$70 $14–$17 Bottle cost % Cost Bottle Price $8–$14 32% $25–$31 $15–$21 35% $42–$60 $22–$30 38% $61–$79 $31–$40 41% $80–$97 $41–$60 45% $98–$135 Wines by the glass: Bottle list:

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