Earlier this week, in a newsletter for industry professionals, Before the shiftWe spoke to some of the city’s top wine buyers. Subscribe to read more articles like this.
It’s no exaggeration to say that rising wine prices are changing the way restaurants operate, and in turn, the way diners drink wine. A Punch survey of New York City wine buyers found that: In 2016At the time, bottle prices in restaurants typically started in the $30 range. A similar expedition was also conducted in May this year.entry prices have roughly doubled. Of course, these aren’t just price hikes; they’re marginal increases at every level of the production and distribution chain, from the cost of oak barrels and glass bottles to label printing, shipping, storage, cost distribution. The list goes on. Wine directors are being forced to rethink how they price their lists to deliver value while maintaining enough sales volume to satisfy their respective business models. So how have they adjusted their pricing models? We asked some of New York’s top wine buyers.
“At Four Horsemen, we almost always mark up by a factor of three. That’s generally the norm. We sell over-allocated wines at above market price, but they’re too young to drink at that price, so we usually send those wines to the warehouse. Prices have definitely gone up. About nine years ago, we had a lot of wines on our list in the $40 or $45 range. Winemakers 1720672276 Wines are sold at a premium because they often have to. And in the end, for us, a triple price increase is the bare minimum that allows us to maintain a list we’re proud of and still have a profit margin. Of course, we do our best to help our customers choose a bottle that fits their budget. Whenever a customer sits down with a wine list, our team asks them what they want to drink and how much they want to pay. We find out how much they’re willing to spend before we put a range of options in front of them. I think this is important.”
—Justin Charno The Four Horsemen
“Currently, the markup on Roscioli’s wine list is 2.5 times the cost we pay for the bottle. Most restaurants have a markup of 3.5 times, so we try to make our prices more affordable. However, there are two cases where we make exceptions: first, when a wine is very rare, allocated and the average market price is significantly higher than the wholesale price (for example, Marie-Noël Ledur’s wines). Second, when a wine is good but less known and a bit expensive, and we want to promote it (for example, Caset-Thibaut). In that case, the markup on the wine is 2 times the wholesale price.”
—Kenneth Crum Rosoli
“There really is no general policy. One of the main edicts I have for our two wine directors is ‘no Excel spreadsheet wine lists.’ That means no tripling or quadrupling any wine. We buy wines assuming they fit economically into our program, not the other way around. We look at all markets (auction, retail, wholesale year-over-year) and try to find value in our wine purchases. We then compare those same markets to competing wine lists in micro-markets. Whenever possible, we strive to offer the best possible price.”
“The wines that we make exceptions to in the typical three- to four-fold markup area fall into a few categories, such as certain vintages or wines from well-known producers. In most cases, these exceptions reduce our profit margins in our business. If we find a great wine on our list, we will absorb much of the cost because we believe in it.” shift Or, regarding price fluctuations over the past few years, the question to ask now is, Does this price reflect the overall value of the market? Yes, we want to make a profit on our wines, and we do. But more importantly, if we can offer our customers something attractive and affordable, we’re going to go for it, no matter what the profit margin is.”
—Chase Sinsor penny and Claude
“We look at the average selling price of a bottle of wine. Anything below that. [cost of goods sold] Anything above that (as a multiple of the cost price paid to the distributor or importer) becomes a question of absolute dollar value. For example, a bottle with a wholesale price of $25 will end up listed at $75. But a bottle that costs $150 might only be priced at $275. We use this pricing strategy for two reasons. First, wine sales are one of the easier ways to increase revenue, especially for a small restaurant like King. With wine, the absolute dollar amount we can make is much higher than any item on the menu. For the kitchen to make the same total profit, we would need to sell dozens of panis instead of one. And second, because we want wine lovers to come to our restaurant. I grew up a vintage and antique lover, and I love leaving little gems for people to find, especially bottles that hold a special place in my heart.
—Annie Seah king and Jupiter
“I usually stick to a standard 3 to 3.5 times markup. If I’m looking at the end of a vintage of something, I’ll raise the price a bit more. But as a rule of thumb, I try not to go beyond a 4 times markup. If I’m out and I see the same wine selling for $10 more elsewhere, I’ll opt for a beer or a cocktail. Fundamentally, I don’t want customers to feel like wine is a luxury they can’t afford. I want to make a profit, but I also want people to feel like they can come into Ernesto’s and enjoy a bottle of wine without spending a fortune. In fact, the price is what initially attracted me to Spanish wines. They’re usually a bit cheaper and rarely disappointing. I want to provide the same experience for my customers.”
—Daryl Koch, Ernesto’s
