WTN /Wine Advisor: Down with the markup?

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Re: WTN /Wine Advisor: Down with the markup?

Postby CraigPB » Thu Oct 04, 2007 2:28 am

As a Sommelier in the Denver area, I always notice the prices in restaurants. In Colorado, you can not bring your own bottle. You must buy your wine from the eatery you are dining at. One restaurant I Som at offers their wines at the retail price. By the glass is of course a different story, but by the bottle, the prices are very fair. Restaurant owners must ask themselves, "Do I want to make 200% on one bottle, or 50% on several bottles?" You would hope that this new trend would help owners realize that having 4 tables order wine is just as profitable as having 1 table paying the 200%.
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Re: WTN /Wine Advisor: Down with the markup?

Postby Bill Bryce » Thu Oct 04, 2007 2:40 am

I live and sell wine in Penna., a state control of wine & spirits. Restaurants buying from the stores get 10% off of the retail prices. When restaurants by from the vendors, they get 10% off the price of the wine(supposely it's wholesale, but it's really retail pricing) and a handling charge from $1.50 to $3.00 a bottle is added after discount. In the Central Pa area, restaurants use anywhere between a 10% mark-up to a 4.5x mark-up and round the price out to the nearest $5 ($91 to $95). The general public is aware of the retail pricing of the wine, but they seem not to care about the price a restaurant may sell it at, especially if the restaurant has a high rating. I, for one, will occassionally buy some over-priced wines only when I take prospective customers out to dinner. But as a rule, IF I can't bring one of my own bottles, I do not buy wine from a restaurant that uses a high mark-up.
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Re: WTN /Wine Advisor: Down with the markup?

Postby Bill Bryce » Thu Oct 04, 2007 3:00 am

Wine by the glass is a whole different pricing game. It used to be charging one quarter of the restaurant's price of a whole bottle. Now, in Pa, I really do not know how the pricing 4 wine by the glass is computed. The Pinot Noir I sell goes from $5.50 to $9.00 a glass, when the bottle cost is around $12. Beringer White Zinfandel is sold retail in Pa for $11.99 for a 1.5Liter bottle; glass pricing ranges from $4 to $6.75 within the Harrisburg area. You and I both know that to eliminate mark-up would be boycotting the purchase of any wine, in any form from a restaurant. Most likely one can get people to boycott gas stations for 1 day to lower the pricing, than getting restaurants or any retailers, whether state owned or privately owned, to change their pricing methods.
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Re: WTN /Wine Advisor: Down with the markup?

Postby MikeH » Thu Oct 04, 2007 9:18 am

To quickly address the price of wine by the glass topic, my observation here in Cincinnati is that a lot of restaurants and bars recover the cost of the bottle with the first glass sold. Kinda makes sense.....if the rest of the bottle goes bad before you sell the second glass, at least you broke even on that bottle.
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Re: WTN /Wine Advisor: Down with the markup?

Postby Bob Ross » Thu Oct 04, 2007 12:43 pm

For what it's worth, the French Culinary Institute in New York City teaches the following formula, seeking approximately a 20%
cost percentage:

Calculating wine by the glass cost percentage:

Wine by the glass cost percentage - cost per glass (bottle cost divided by # of pours per bottle) divided by selling price per glass.

25.4 ounces in a 750 ml bottle

4 oz pour = 6 pours per glass
5 oz pour = 5 pours per glass
6 oz pour = 4 pours per glass

Example:

Calina Reserve Chard costs $5.33 a bottle.

Using a 6 ounce pour or 4 pours per bottle the cost per glass is $5.33 / 4 = $1.33.
$1.33 cost per glass divided by $6.75 selling price per glass = 19.7% wine by the glass cost percentage.


The formula reveals a couple of really important points:

a. The size of the pour can make an important difference.

b. Finding a glass that makes it easy for a pourer to hit the 4/5/6 oz level is important; the FCI recommended against etched glasses because of breakage and against painted glasses -- like the shot glasses -- because it reduced the beauty of the wine in the glass.

Their suggestion: training and constant quality control by the managers.
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Re: WTN /Wine Advisor: Down with the markup?

Postby MikeH » Thu Oct 04, 2007 1:33 pm

Bob Ross wrote:For what it's worth, the French Culinary Institute in New York City teaches the following formula, seeking approximately a 20%
cost percentage:

Calculating wine by the glass cost percentage:

Wine by the glass cost percentage - cost per glass (bottle cost divided by # of pours per bottle) divided by selling price per glass.

25.4 ounces in a 750 ml bottle

4 oz pour = 6 pours per glass
5 oz pour = 5 pours per glass
6 oz pour = 4 pours per glass

Example:

Calina Reserve Chard costs $5.33 a bottle.

Using a 6 ounce pour or 4 pours per bottle the cost per glass is $5.33 / 4 = $1.33.
$1.33 cost per glass divided by $6.75 selling price per glass = 19.7% wine by the glass cost percentage.


The formula reveals a couple of really important points:

a. The size of the pour can make an important difference.

b. Finding a glass that makes it easy for a pourer to hit the 4/5/6 oz level is important; the FCI recommended against etched glasses because of breakage and against painted glasses -- like the shot glasses -- because it reduced the beauty of the wine in the glass.

Their suggestion: training and constant quality control by the managers.



Doing some quick math, a restaurant using this pricing practice will recover the cost of the bottle on the first glass with either a 5 or 6 ounce pour.
Cheers!
Mike
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