Selling Wine: Bottle vs. Glass

Selling Wine:
Most People Don’t Prefer Wine in the Bottle, They Prefer It in a Glass

If you consider selling wine by the glass a necessary evil to please guests who are too cheap to buy a bottle, you’re not alone. You’re wrong, but at least you’ve got company. Many restaurateurs tolerate but do not promote wine-by-the-glass sales, in belief that these programs generate only a fraction of the revenue reaped by bottle sales.

You need to understand how much a wine-by-the-glass program can influence what your customers talk about, taste and buy. And when strategically priced, promoted and stocked, a wine-by-the-glass program can be profitable and a boon to your overall wine sales.

Selling More Wine, Even by the Glass, Is a Good Thing
For more than a decade, wine sales trends indicate that consumers are drinking less but better wine. Whether because of the health warnings of alcohol abuse or stiffer penalties for driving under the influence, folks would rather savor than guzzle the fermented fruit of the vines. Over the last 20 years, wine sales by volume have declined on average; however, sales by dollar have increased every year for the last two decades.

The lesson is that customers seek quality when dining out, including their choice of wines. As in all aspects of the restaurant experience, the wine-by-the-glass program should intrigue and entertain your customers. Remember, your customers will purchase less wine as time goes on, but they will be willing to pay a premium for wine with a high perceived value. Understand this key point, as it is critical to any restaurateur who wishes to succeed at selling wine.

Another factor behind increasing wine sales revenue is the ever-expanding number of products in the marketplace. Not only are people paying more for a glass than they were 10 years ago, they are also ordering a much greater variety of wines than they were in the 1990s.

For example, 10 years ago the variety Shiraz was an interesting but unusual offering, Merlot was just beginning to exhibit strength in the marketplace, and few diners had heard of Pinot Grigio. Even casual wine drinkers recognize and order these wines today. These are the same folks who used to choose Chardonnay or “Chablis.”

Choice is the watchword for wine consumers today, which has not been lost on the successful chains. For example, Red Lobster offers 18 wines, 12 of them by the glass. The Olive Garden pours tasting glasses of wine for prospective buyers, introducing them to lesser-known appellations that include Barbera, Montepulciano or Valpolicella.

Many customers respond to an increase in choices with an increase in spending. By offering more choices, you allow them to step up to incrementally more expensive wines, and then wine-by-the-glass becomes an asset, not a liability, in the struggle for higher check averages. The era of the “house white” and “house red” died ages ago. Indeed, the habit of offering a “house Chardonnay” is an anachronism, at odds with customers’ interests in living well and seeking out new and interesting values.

Supporting this premise is Opus One, a seasonal wine-by-the-glass offered at many restaurants around the country, at extraordinarily high prices. Even at prices of $20 for a small glass, the wine typically sells out. The success of Opus One with by-the-glass promotions reveals consumers’ curiosity in wines of this price scale and reputation. Very few folks will drop $100 for a bottle of wine, but some will splurge on an expensive glass of the same stuff.

Wine has to be pretty special to command $20 per glass. If you try to view a wine-by-the-glass program as an opportunity to gouge your customers, it will fall on its face. You need to price your wines by the glass with an eye toward the marketplace. Otherwise, you’ll find that your customers will view wine by the glass as a poor value, and will opt for inexpensive bottles or forgo wine altogether.

How Many Selectionsare Enough?
The minimum number of wines you offer by the glass will be predicated on your budget, customer base and sales goals. The decision process involves seven steps:

1. Assess Your Service Capacity
   You might start from the assumption that you will never have enough wine storage to support a successful wine program. Certainly, few operations have enough room for chilled wine storage. So before you can take the first step in building a great wine program and a thriving wine-by-the-glass program, assess how many bottles you can keep chilled at one time.
   
   Now ask yourself how many glasses of wine are likely to be served in one shift. If there are 200 seats in the restaurant, and you expect no more than two seatings each shift, perhaps it’s likely you can sell wine to at least one-quarter of these customers.
   
   Then ask yourself how many wine drinkers will prefer to purchase by the glass versus bottle. Attack the problem by day part. At lunch, very few wine bottles are served and rarely will your guests buy more than one glass, if they do have a glass. At dinner, you can expect to sell more bottles of wine than separate glasses. But the number of bottles sold will depend upon a host of issues, including server training, price and presentation of cuisine; guest perception of your value; ease of wine service, allure of the wine selections, and the friendliness and readability of the list itself.
   
   Sorting out all these possibilities, you might be able to estimate that you’ll sell 30 to 50 glasses of wine each night, and 20 to 30 at the lunch shift. If you have six different wines by the glass, and if you get five glasses out of each bottle, then you would think that you’d need no more than three bottles of each wine by the glass chilled ahead of time. But guests can be funny in the way they order wine. One night, you’ll sell only a few glasses of a particular wine, the next night you won’t be able to keep enough bottles chilled. You will often find that sales of certain wines are tied to the selling skills of certain servers. Track sales by day part, and in time you’ll get a sense of your inventory requirements.
   
   
2. Target Your Sales Goals
   If you’ve developed a good wine business plan, then you know what sort of dollar sales you want to achieve. You should be clear about what percentage of those sales should come from alcohol beverage, and specifically from wine sales.
   
   A good rule of thumb in any sales projection is to take your worst-case scenario and then reduce it by 25 percent. This is especially true in projecting wine-by-the-glass sales. You might like to see one-quarter of your sales generated by your wine program, but that would put you in rarified company. Unless you have an amazingly well-trained staff, don’t plan on it.
   
   Create modest ambitions and closely track every sale. From there, you can decide how you want to grow your by-the-glass selection. And as you grow the list, you should expect revenues to increase at a greater rate than sales by volume. That is to say, a more interesting and diverse wine-by-the-glass list might not increase the number of glasses sold, but you should see the average price paid per glass creep upward.
   
   For example, if you offer only one Chardonnay for $5 per glass and you begin offering two different Chardonnays, one for $4.50 and the other for $6.50, the total dollar sales will increase. Indeed the $6.50 glass of Chardonnay will likely outsell the less expensive Chardonnay.
   
   A good wine-by-the-glass list also introduces customers to wines, grapes, styles or regions new to them. In the case of Opus One (and there are many other examples as well), part of the allure for the customer was the chance to experiment at an affordable level. For the average wine drinker, who would like to feel confident in her knowledge of wines, but is not going to gamble on a label or variety with which she is not familiar, a wine-by-the-glass program allows her to test new waters. Without a wine-by-the-glass program, you will have a difficult time showcasing new, unknown, or unusual wines. Consider it marketing in the same vein as wineries offer wine tasting.
   
   
3. Try to Please Most of the People Most of the Time
   Like any good wine list, a wine-by-the-glass list offers balance and choice, within the limits of the concept and budget of the restaurant. These choices should include a variety of grapes, regions and above all styles. ( See “The Elements of Style: A Well-Rounded Wine-by-the-Glass Inventory,” below.)
   
   
4. Consider Pricing and Promotion
   The categories that reflect popular opinion should be the focus of your first efforts with high-priced offerings. Grapes such as Pinot Grigio, Chardonnay, Merlot and Cabernet Sauvignon best represent those categories.
   
   In the example mentioned above, two Chardonnay labels were offered, one at $4.50 and the other at $6.50. The next step would be to introduce white Burgundy or highly regarded American Chardonnay for $10 or more. By offering different price ranges, styles and regions of origin, the customer is given a reason to test the wines. Hence, both the customer and servers receive an education. It is easier to buy and sell a bottle of anything with which you are familiar.
   
   
5. Train the Staff to Sell and Serve It
   If there is a single and simple reason to explain the failure of ambitious wine programs, it’s that servers are not trained to communicate the program to the guests. You can train through multimedia programs, videos, seminars, and even trips to vineyards. But none of this is as important as simple tasting.
   
   One of the advantages of a great wine-by-the-glass program is that the servers have a chance to find out how those wines taste. It doesn’t take a server seminar on a valuable Sunday afternoon; it only requires that a manager permit the servers to smell or perhaps taste the last ounce out of an open and soon-to-be-tossed bottle of wine at the end of the shift.
   
   While tasting should be done in a responsible manner and in a controlled environment, some sort of discussion and even handouts should accompany the tasting. Each server should be encouraged to find four simple words to describe the wine. Perhaps it’s a Sauvignon Blanc from New Zealand. A simple description could be that it is light, tart, and tastes like green apples and grapefruits. Any more information than that is probably wasted.
   
   An important aspect of your server training is to teach how much wine is to be served and in which glasses. It’s imperative that sample glasses or illustrations that demonstrate glass pour size be visible wherever the wine is poured.
   
   If you pour 5 ounces, you’ll receive about five glasses per bottle and you should price accordingly. Many restaurants offer a flight of three comparable wines, such as three lighter-styled reds, or three powerful reds. Generally in the latter case, the portions are smaller, or about 2 to 4 ounces.
   
   
6. Develop a Schedule
   Wine-by-the-glass program taxes your storage capacity. You might be willing to tie up your money in wine to be sold by the bottle, since well-selected bottles of wine will hold or even increase in value over the years; however, wine-by-the-glass is a now-or-never proposition. Your purchasing should be based on weekly sales.
   
   Avoid changing your wine-by-the-glass list too frequently. It frustrates both customers and servers, increases in-house training time, and results in greater wasted inventory.
   
   
7. Create Visibility
   Table tents or wine-by-the-glass menus are proven sellers. But the lack of respect often accorded wine-by-the-glass too often creeps into the menus and table tents. The wines offered by the glass should be posted with other specials of the day, and printed on the menu where possible. Daily lineup should include a tasting of any new wine-by-the-glass. Wine-by-the-glass must be visible to succeed.