Friday, March 22, 2013

Importance Of Wine Sales By The Glass

I have dined at plenty of restaurants which sell ten to twenty wines by the glass yet may have one hundred or more wines available by the bottle. Most restaurants have far more wines available by the bottle than the glass yet does that actually make sense? Would a larger selection of wines by the glass enhance a restaurant's business?

In the latest issue of Foodservice East (Wintertide 2013, p.14), there is an article discussing a recent study by Restaurant Sciences. This study, involving research of about 10 million guest checks, is supposed to be the first study of wine by the glass consumption in U.S. restaurants. One of the most interesting conclusions was that, "Last year, wine by the glass sales made up nearly 72% of all wine sales on-premise." Most people buy wine by the glass rather than by the bottle, so why do wine lists often provide so few options for wines by the glass, choosing to provide a far greater diversity in wines by the bottle?

There are some logistical reasons why restaurants often limit their wine selection by the glass. Once a bottle is opened, the restaurant needs to have a way to keep the bottle fresh until it is empty. Wine preservation systems can be expensive but can provide value to the restaurant. Wines by the glass though usually provide a nice profit to restaurants, especially when you consider that it is common to make the price of a glass equal to at least the wholesale cost of the bottle, if not more.

Even if a restaurant cannot sell an entire bottle of wine by the glass, they are likely to at least break even on the cost of the wine. As the average pour is 6.18 ounces, there will be four glasses in a bottle, meaning that if all four glasses are sold, the restaurant would receive at least four times the wholesale cost of the bottle. That is a very nice profit margin. That high markup is also why many wine writers suggest purchasing wine by the bottle rather than a glass. It doesn't seem many people are listening to that advice as so many people still buy wine by the glass.

So why aren't restaurants offering more wines by the glass if that is what sells the most?

The Restaurant Sciences study derived a number of other interesting conclusions. They broke down the market share of the top ten white and red wine types, as well as providing average pricing in 6 different types of establishments, from family dining to hotel bars. They learned that price matters much less than the type of varietal or blend. The best values at most restaurants appear to be Pinot Grigio and Zinfandel.

The top ten whites include: Chardonnay 44.5%, Pinot Grigio 24.8%, Sauvignon Blanc 13.6%, Riesling 7.7%, Pinot Gris 2.3%, White Blends 1.3%, Gewurtztraminer 0.6%, Chenin Blanc 0.3%, and All Other Whites 4.9%. The top ten reds include: Cabernet Sauvignon 29.4%, Merlot 18.1%, Pinot Noir 15.8%, Zinfandel 10.9%, Malbec 9.2%, Red Blends 7.4%, Shiraz 3.2%, Sangiovese 2.3%, and All Other Reds 3.7%.

Chardonnay is clearly the most popular wine by the glass, and just four white grapes constitute over 90% of the total number of whites. Seems other white grapes need a greater promotion to acquire a larger market share. For red wines, five grapes dominate over 83% of the total, showing that patrons enjoy a bit more diversity in their reds. Yet even other red grapes could use more promotion as well. Most people seem to go with safe and common choices, rather than seek to expand their horizons.

I am certainly not the norm as I usually tend to order a bottle of wine (or more than one). If I purchase a glass of wine, I usually go for something more unique or exotic. I seek something different rather than the same old wines, like a grape I have never tasted before, or a wine from a lesser known region.

When you dine out, do you order wine by the bottle or glass? If you order wine by the glass, what type of wines do you usually order?


Jeff said...

When I am out and ordering wine, it always depends on how many people are with me. If it is just me I will order by the glass. If there are 2 of us and we can agree on a wine we will get a bottle, otherwise by the glass again.

My choice is usually based on what I am eating, pairing first, then I will look for something unusual that I haven't tried before.

Frederick Wright said...

It is rare to encounter a restaurant that puts as much thought, or indeed any thought, into their wines by the glass. And that is unfortunate since sometimes I just want one glass rather than an entire bottle. One of the reasons I love Fleming's Steakhouse so much is their commitment to their glass program, generous pours, and moderate prices.