For those who work in the restaurant industry or are familiar,what do you markup(off wholesale for those not familiar to avoid shock)?I do 2.8 for glass and 2.5 or less on bottle only,but a common trend seems to be 4.
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4X?! I would probably not frequent a place that did 4X........the most successfull places I see use a sliding scale, as the wine gets more expensive wholesale, the markup goes down, starts somewhere abot 3X,and goes down to 1.8X for bottles over $100 wholesale......that way you steer the customer into the 'value' wines in the $80+ territory of your wine list.
100% to 150% markup is common around the Portland area. Any more than that and I'll pay corkage.
quote:Originally posted by bodhi:
For those who work in the restaurant industry or are familiar,what do you markup(off wholesale for those not familiar to avoid shock)?I do 2.8 for glass and 2.5 or less on bottle only,but a common trend seems to be 4.
It seems that people are missing this word.
I'm guessing that bodhi is talking about a multiple of his cost, not a multiple of the retail cost. Restaurants buy wine at a far lower price/bottle than you and I do at the wine store.
Since we regular folks only know retail cost, I think that 2x retail is considered fairly reasonable to most of us restaurant goers.
I think there is more comfort with a higher multiple for less expensive bottles (e.g. $20 retail bottle on the list for $50), and less for more expensive bottles (e.g. $80 retail bottle on the list for $200). That just seems to comport with common sense as well, as the cost of storage, stemware, service etc. does not grow in full proportion to the cost of more expensive bottles. For example, the cost of serving a Chateau Latour is higher than the cost of serving a Columbia Crest merlot, due to nicer and more breakable stemware, use of a decanter, more time spent by the staff in serving. But the cost of serving a $750 bottle of Latour is not 25 times higher than the cost of serving a $30 bottle of Columbia Crest off the wine list.
Since we regular folks only know retail cost, I think that 2x retail is considered fairly reasonable to most of us restaurant goers.
I think there is more comfort with a higher multiple for less expensive bottles (e.g. $20 retail bottle on the list for $50), and less for more expensive bottles (e.g. $80 retail bottle on the list for $200). That just seems to comport with common sense as well, as the cost of storage, stemware, service etc. does not grow in full proportion to the cost of more expensive bottles. For example, the cost of serving a Chateau Latour is higher than the cost of serving a Columbia Crest merlot, due to nicer and more breakable stemware, use of a decanter, more time spent by the staff in serving. But the cost of serving a $750 bottle of Latour is not 25 times higher than the cost of serving a $30 bottle of Columbia Crest off the wine list.
I've always heard that the per-glass price is about what the restaurant paid for the entire bottle, wholesale.
And yes, roughly double the retail price is what I generally see around here for the bottle.
- Jeff
And yes, roughly double the retail price is what I generally see around here for the bottle.
- Jeff
A lot is based on the retail price as far as mark up value to the diner. The cheaper bottles are the worst. Best deals on wine lists (of course I love to BYO anyway 
) are the places I like for me are the $60-$80 retail bottles and up.
I also look for non cab or bordeaux varietals for better value. Zins, Syrah, Merlot. Seeing the usual Napa Cab suspects (Silver Oak, Silverado) at $150 drives me nuts, but it is the norm for most places.
Most lists suck in selection, have few mature bottles and ridiculous mark ups to boot. Most of us have better - So BYO baby whenever possible!
) are the places I like for me are the $60-$80 retail bottles and up. I also look for non cab or bordeaux varietals for better value. Zins, Syrah, Merlot. Seeing the usual Napa Cab suspects (Silver Oak, Silverado) at $150 drives me nuts, but it is the norm for most places.
Most lists suck in selection, have few mature bottles and ridiculous mark ups to boot. Most of us have better - So BYO baby whenever possible!
I estimate that here in the greater Los Angeles area, the average for a bottle is about 2 to 3 times retail (i.e., list), some a bit lower, some a little higher. By the glass is usually only slightly more.
Fortunately, nearly every restaurant in this area allows patrons to bring wine, with corkage running from $0 to $25, but normally $10 or $15 per bottle.
I've always thought a restaurateur would be wise to sell wine for about full retail, and to charge only a very nominal corkage fee, in order to attract customers. Places that overcharge for wine, or try to gouge me on corkage, don't get my repeat business.
Fortunately, nearly every restaurant in this area allows patrons to bring wine, with corkage running from $0 to $25, but normally $10 or $15 per bottle.
I've always thought a restaurateur would be wise to sell wine for about full retail, and to charge only a very nominal corkage fee, in order to attract customers. Places that overcharge for wine, or try to gouge me on corkage, don't get my repeat business.
I really don't understand the logic behind the huge markups. Every time I go out and see that I've got to drop $80+ on a decent wine to go with my $40 meal just makes me want to go out to eat less and less, or just order water with my meal and drink my wine when I get home. And then they pour my $80 wine in clunky manufactured wine cups (hard to even call them glasses--but that's another issue). 
I would think that restaurants would do much better if they charged 10 or 20% over retail street price. More people would order wine, maybe even multiple bottles. I can understand 2x or 3x on a $10 bottle of Rosemount Shiraz--- you have to pay for storage, service, glassware, etc. That's fair, but where's the logic in doubling the street price for a $100 Napa cab (for example, Dominus for $250)?? And then we're supposed to tip 20% on that, too.
Is there anyone from the restaurant business that can explain this logically???
I would think that restaurants would do much better if they charged 10 or 20% over retail street price. More people would order wine, maybe even multiple bottles. I can understand 2x or 3x on a $10 bottle of Rosemount Shiraz--- you have to pay for storage, service, glassware, etc. That's fair, but where's the logic in doubling the street price for a $100 Napa cab (for example, Dominus for $250)?? And then we're supposed to tip 20% on that, too.
Is there anyone from the restaurant business that can explain this logically???
It's just impossible to beat the BYOB arrangement. From my perspective it's truly a win/win situation for both client and establishment owner. They don't have the cost of selecting,shipping & storing. I bring exactly what I want and enjoy it with a fine meal.
Montreal is truly fantastic for this, and continually getting better. I'm constantly hearing of more places offering this convenience, and plan to continue fully supporting them. Not quite as popular in the States, it seems, more places should take note of the success of such a combination.
Montreal is truly fantastic for this, and continually getting better. I'm constantly hearing of more places offering this convenience, and plan to continue fully supporting them. Not quite as popular in the States, it seems, more places should take note of the success of such a combination.
I don't think BYO is much of a win for the restaurant. It's a far greater boon to the patron. I believe the restaurant profit is usually less if people bring wine, but it does bring some extra people into the place who might not normally come. I think of it more like a crtuise ship offering half-price last minute deals on empty rooms. The profit is lower or almost missing, but it keeps the staff and the restaurant busy. Of course, in a restaurant, there's still a profit to be made on the food.
quote:I don't think BYO is much of a win for the restaurant. It's a far greater boon to the patron. I believe the restaurant profit is usually less if people bring wine, but it does bring some extra people into the place who might not normally come. I think of it more like a crtuise ship offering half-price last minute deals on empty rooms. The profit is lower or almost missing, but it keeps the staff and the restaurant busy. Of course, in a restaurant, there's still a profit to be made on the food.
That is true when dealing with the masses and a BYO policy should IMO be catered towards people who have special wines that are not on their list where a reasonable cork fee is charged. This keeps the jug wine people out or the people bringing a 2003 Silver Oak thinking they're big shots which is on everyones list and is just as insulting IMO.
I do believe mid-higher end places that allow (not openly advertise) people like us to bring do make money as we go back to those places (us winos) because of the BYO allowable. I strongly believe in that instance - it is good business.
It's 2 different crowds out there. Let the masses think you can't bring and let them buy their Santa Margharita Pinot Grigio for $45 but be smart enough to allow people like us to bring our good wine when we ask and that should make everyone happy
As I've mentioned many times before, we use the following pricing model for our wines by the bottle:
"Retail Price" of the wine + $20 ($15 if the "retail price" is less than $20). We assume "Retail price" is 40% above wholesale.
For example, a bottle of wine with a wholesale cost of $20, we assume the retail price to be $28 ($20 + 40%) and the restaurant price would then be $48.
Using this pricing model, the higher the cost of the bottle, the lower the markup percent. I created the $20 over retail pricing model as to me $20 is like a corkage fee. Since my homestate of DE does not allow corkage, I think this is fair (and what I would like to pay), at a quality restaurant with Riedel stemware and proper storage and serving tempuratures.
The only time we deviate from the retail + $20 formula is for the several cult wines (Harlan, etc.) on our list. For "retail", I take the 3 lowest prices on winesearcher.com and average them for the retail price and then add $20 to that.
Using this pricing model, our overall cost of wine sold as a percent of wine sales is 40%. This profit margin allows us to be pay our bills and earn a modest return.
"Retail Price" of the wine + $20 ($15 if the "retail price" is less than $20). We assume "Retail price" is 40% above wholesale.
For example, a bottle of wine with a wholesale cost of $20, we assume the retail price to be $28 ($20 + 40%) and the restaurant price would then be $48.
Using this pricing model, the higher the cost of the bottle, the lower the markup percent. I created the $20 over retail pricing model as to me $20 is like a corkage fee. Since my homestate of DE does not allow corkage, I think this is fair (and what I would like to pay), at a quality restaurant with Riedel stemware and proper storage and serving tempuratures.
The only time we deviate from the retail + $20 formula is for the several cult wines (Harlan, etc.) on our list. For "retail", I take the 3 lowest prices on winesearcher.com and average them for the retail price and then add $20 to that.
Using this pricing model, our overall cost of wine sold as a percent of wine sales is 40%. This profit margin allows us to be pay our bills and earn a modest return.
I never charge corkage if anybody brings a decent bottle in,I appreciate them coming in,when people are just trying to be cheap,bring the yellow tail still in a brown bag with a bright orange sticker on it,its a $10 corkage.basically I make my money on the sangria people so anything interesting I do a very low markup for the people who appreciate it,and to be able to have interesting things and go through them.
Cuffthis: I would patronize your restaurant, if I were in Delaware, and same for you Bodhi.
But your pricing policy does not seem to be anywhere near what I have seen in my local and distant travels. I can even accept that cult wines like Harlan, or older vintages of Bordeaux, would be very expensive, as the restaraunt has to replace these at market value. But I still have not heard a good reason why most restaraunts charge over $200 for wines like Dominus, Silver Oak Napa, Beringer Reserve, Montelena Estate, etc, etc.
But your pricing policy does not seem to be anywhere near what I have seen in my local and distant travels. I can even accept that cult wines like Harlan, or older vintages of Bordeaux, would be very expensive, as the restaraunt has to replace these at market value. But I still have not heard a good reason why most restaraunts charge over $200 for wines like Dominus, Silver Oak Napa, Beringer Reserve, Montelena Estate, etc, etc.
Its a catch-22 for me, I believe in making your money where you can and if some people are wiling to pay 150+ for a bottle of SilverOak or 60 for a cigar after dinner than I really don’t see a problem with it as long as the establishment provides alternatives (corkage, on-site storage, etc). That being said it sucks to be on the consumer end in a restaurant in NYC without a bottle because I am going to wind up spending at least sixty if not over a hundred for my bottle due to reasons mentioned in thread earlier (lesser mark-up), I would much rather pay the corkage fee (although some place in NYC have 50-75 fee) and bring my own hundred dollar bottle. I usually try not to duplicate any wine that is available from restaurant. On a side note more often than not a personality and quarter glass sampling to wine steward/sommelier will get the corkage fee waived.
I have found in lots of business when your not buying the “primary product” the mark up is much greater (think any item in a hotel except for the room, vending at a concert/sporting event, wine glasses at a liquor store, etc). When at a Met game I actually pay 7.75 for a twelve ounce can of semi warm becks beer. Same beer in a deli is 1.50, in a regular bar 4-5 . Restaurants have the same hold on its patrons I assume.
I have found in lots of business when your not buying the “primary product” the mark up is much greater (think any item in a hotel except for the room, vending at a concert/sporting event, wine glasses at a liquor store, etc). When at a Met game I actually pay 7.75 for a twelve ounce can of semi warm becks beer. Same beer in a deli is 1.50, in a regular bar 4-5 . Restaurants have the same hold on its patrons I assume.
quote:Originally posted by OffNotes:
I've always heard that the per-glass price is about what the restaurant paid for the entire bottle, wholesale.
And yes, roughly double the retail price is what I generally see around here for the bottle.
- Jeff
Can't speak for the US market of course, but over here, 3x-4x is usually normal. Too high of course, and better establishments charge less. Some even make a reputation by offering high-class wines at or below their store price, but now we're talking wines that cost €80 to begin with.
As far as glass goes, it's quite easy. If you have a small by-the-glass list and active selling staff, you can charge less, but if you don't and sell just about anything by the glass, then you want a glass (one fourth of the bottle usually) to pay for the whole bottle (your price from the distributor).
BYO is not allowed here and that's sad of course, but in a way I feel that if I try and make a really interesting wine list and someone wants to bring in their own bottles, that's like telling me I can't do my job. Would a chef let you bring McDonalds for €10? Never.
Exceptional bottles are of course welcome, but that's an exception.
Board-O, fine establishments have little to no profit margin on food. A normal figure for a one-star michelin restaurant is 0-10% on food, 3% being somewhat of the norm, anything better and you're way behind and have to make money on other things. Thank god for interns and coffee you can sell at mind-boggling margins.
quote:Its a catch-22 for me, I believe in making your money where you can and if some people are wiling to pay 150+ for a bottle of SilverOak or 60 for a cigar after dinner than I really don’t see a problem with it as long as the establishment provides alternatives (corkage, on-site storage, etc). That being said it sucks to be on the consumer end in a restaurant in NYC without a bottle because I am going to wind up spending at least sixty if not over a hundred for my bottle due to reasons mentioned in thread earlier (lesser mark-up), I would much rather pay the corkage fee (although some place in NYC have 50-75 fee) and bring my own hundred dollar bottle. I usually try not to duplicate any wine that is available from restaurant. On a side note more often than not a personality and quarter glass sampling to wine steward/sommelier will get the corkage fee waived.
Well said DD. I agree completely.
quote:Originally posted by thorn:
[QUOTE]Originally posted by OffNotes:
Board-O, fine establishments have little to no profit margin on food. A normal figure for a one-star michelin restaurant is 0-10% on food, 3% being somewhat of the norm, anything better and you're way behind and have to make money on other things. Thank god for interns and coffee you can sell at mind-boggling margins.
I can’t imagine that the place that charges 7 for crab cakes and the place that charges 27 are making the same amount of profit or the same profit margin. Same with VOSS bottled water how can price change by as much as 10 dollars for the same size bottle?
quote:Originally posted by thorn:
BYO is not allowed here and that's sad of course, but in a way I feel that if I try and make a really interesting wine list and someone wants to bring in their own bottles, that's like telling me I can't do my job. Would a chef let you bring McDonalds for €10? Never.
There's value added due to the chef's abilities. However, where's the value added in wine?
That said, if a restaurant has a reasonably priced, well thought out wine list/service, then I have no problem paying there.
quote:...where's the value added in wine?
I can think of a few things that add value to a bottle of wine sold by a restaurant:
1. Labor: someone has to spend time selecting and ordering the wine, receiving it, putting it in the cellar, keeping inventory, listing it, retrieving it from the cellar, opening it, pouring it, and washing the glasses, and there may be a dedicated sommelier and cellar staff in larger restaurants, among other things. Consumers obviously do these things for themselves, but employees don't, and management is entitled to compensation for time spent on such tasks.
2. Overhead: the storage space isn't free, and indeed can be quite expensive, depending on the location and lease terms; the cost of the cellar itself, which vary from a few boxes in the back to elaborate showplaces, plus the cost of the energy to operate the cooling equipment; glasses, including breakage and replacement; spoilage, bottles rejected by customers, and broken bottles; a liquor license; transportation and delivery; loss insurance on the wine; liability insurance for serving alcohol to idiots; etc.
3. Financing/Loss of Opportunity: If the restaurant stores the wine for a few years, either to age it or because it doesn't sell right away, it loses interest on the money invested in the wine (if the money had been invested in a decent mutual fund for the last few years, the lost income could be substantial, 25% per year or more).
4. Rarity: Some wines are rare when purchased, others become rare and more desirable over time, and that adds value (obviously this doesn't apply to most of the wines you find on a typical restaurant list, but it certainly applies to better bottles).
5. Convenience: Simply having the wine available to the patrons adds value to it.
6. Risk: Historically, the restaurant business is among the riskiest of ventures, with something like 60% failing within the first 3 years. Assuming such risk on a substantial investment is part of the value added. The restaurant's investment in a decent cellar is part of that risk.
All of these things considered, I can't bitch too much about paying twice retail for a currently available bottle, or considerably more for an aged bottle or good wine. Still, I won't tolerate places that gouge on the wine, even if I accept the dubious proposition that there's no profit in the food.
Moreover, I fail to see how restaurants can justify charging outrageous corkage fees of $25 or more per bottle. Yes, they lose the profit they would have made if I had purchased a bottle from their lists, but by that logic, teetotalers should be charged for not buying anything. A charge of $10 or even $15 to cover the service and glasses is tolerable, IMNSHO, but anything more just pisses me off.
Twice retail is about the norm in my neck of the woods. Does twice retail mean it's about 4 times what the restaurant paid for it? I'm not in the restaurant business, but if the standard markup is about 4x what they paid then that's too high especially for current release stuff. I mean come on how long have you been sitting on it...a month. I would think restaurants go through quite a bit of wine on a daily basis so having your $$ tied up long term doesn't really apply in most daily drinker types of wine. I also remember from my one and only stint in the restaurant biz at the Olive Garden many many moons ago that alcohol is where the restaurant is making their $$ and I'm fine with that.
The problem is, in order to get a decent bottle of red wine with dinner you end up pushing $100, which is at least the price if not more than the entire meal the two people just ate. Then add the cost of subsidizing their staff's paycheck as they are only paying their staff $2 something an hour...so add an extra 20% to your tab, but that's another story.
There has to be an alternate way for the average Saturday night dinner restaurant to make their profit without having to jack up the wine prices so high.
The problem is, in order to get a decent bottle of red wine with dinner you end up pushing $100, which is at least the price if not more than the entire meal the two people just ate. Then add the cost of subsidizing their staff's paycheck as they are only paying their staff $2 something an hour...so add an extra 20% to your tab, but that's another story.
There has to be an alternate way for the average Saturday night dinner restaurant to make their profit without having to jack up the wine prices so high.
Seems like the better bargain of a wine, the higher its marked up. For instance, I've seen an 04 Turnbull on a wine list (forget which one) for around $110. Thats a $35 bottle of wine!!! C'mon!!!!!
3x is real expensive by the bottle. I used to run wines by the glass where the bottle was paid for a little after the first glass was poured but now I work at a country club and wines by the bottle are less than 100% markup and wines by the glass go for about $8 a glass if the cost was $10 a bottle. They don't gauge. When I worked at Napa Valley Grille they got the wine by the glass cost of bottle after the first glass and wines by the bottle were 3x.
t returned from San Francisco and to date the most impressively priced wine list I have come accross was Plumjack Cafe. Truly can appreciate a place like this..will make this a return spot as often as I can.
quote:Originally posted by RDCollins:quote:...where's the value added in wine?
I can think of a few things that add value to a bottle of wine sold by a restaurant:
1. Labor: someone has to spend time selecting and ordering the wine, receiving it, putting it in the cellar, keeping inventory, listing it, retrieving it from the cellar, opening it, pouring it, and washing the glasses, and there may be a dedicated sommelier and cellar staff in larger restaurants, among other things. Consumers obviously do these things for themselves, but employees don't, and management is entitled to compensation for time spent on such tasks.
2. Overhead: the storage space isn't free, and indeed can be quite expensive, depending on the location and lease terms; the cost of the cellar itself, which vary from a few boxes in the back to elaborate showplaces, plus the cost of the energy to operate the cooling equipment; glasses, including breakage and replacement; spoilage, bottles rejected by customers, and broken bottles; a liquor license; transportation and delivery; loss insurance on the wine; liability insurance for serving alcohol to idiots; etc.
3. Financing/Loss of Opportunity: If the restaurant stores the wine for a few years, either to age it or because it doesn't sell right away, it loses interest on the money invested in the wine (if the money had been invested in a decent mutual fund for the last few years, the lost income could be substantial, 25% per year or more).
4. Rarity: Some wines are rare when purchased, others become rare and more desirable over time, and that adds value (obviously this doesn't apply to most of the wines you find on a typical restaurant list, but it certainly applies to better bottles).
5. Convenience: Simply having the wine available to the patrons adds value to it.
6. Risk: Historically, the restaurant business is among the riskiest of ventures, with something like 60% failing within the first 3 years. Assuming such risk on a substantial investment is part of the value added. The restaurant's investment in a decent cellar is part of that risk.
All of these things considered, I can't bitch too much about paying twice retail for a currently available bottle, or considerably more for an aged bottle or good wine. Still, I won't tolerate places that gouge on the wine, even if I accept the dubious proposition that there's no profit in the food.
Moreover, I fail to see how restaurants can justify charging outrageous corkage fees of $25 or more per bottle. Yes, they lose the profit they would have made if I had purchased a bottle from their lists, but by that logic, teetotalers should be charged for not buying anything. A charge of $10 or even $15 to cover the service and glasses is tolerable, IMNSHO, but anything more just pisses me off.
And I can do all of that myself with the exact same result. The chef/cooks, however, take ingredients and produce a finished product. 2x retail is the name of the game, and if a list is designed well, I'll pay a premium over retail. If it isn't, I BYO or drink water.
To RDCollins:
Retail stores provide these same services, but manage to do this without 200% to 300% mark up.
Retail stores provide these same services, but manage to do this without 200% to 300% mark up.
quote:Originally posted by Wine Dilettante:
To RDCollins:
Retail stores provide these same services, but manage to do this without 200% to 300% mark up.
Now, while I agree that many restaurants have to high markup, this comparison is just silly. A retail store has roughly the same personal staff handling wine that a restaurant does, all included (accounting etc), but none of the "extra" services... such as food.
As has been stated before, high-class restaurants make little money or even lose money on every plate they send out of the kitchen, not to mention service. Why do you think all three-star chefs open up Bistro-style restaurants? They've invested millions of dollars into bleeding businesses for years to get to where they are and now it's time to profit.
Just setting one single seat in a top-end restaurant costs around €15 included wages, washing of linen etc, and that doesn't even include "investment costs" like buying cutlery and glasses, and we all treasure getting served our wine in those fragile Spiegelau or Riedel glasses, no? Wine is where the only real profit is for a restaurant of a good level.
So if you feel cheated out of money buying wine in a restaurant, you had better be prepared to pay a good margin on other things, like the food, which is more often than not just paying it's own cost of production.
I personally have no problem charging 4x on Yellow Tail (not that I would ever put that on a list of mine) if that means I can finance finding and keeping rare and special wines.