In Part I of this series we explored how a ‘non-sommelier’ restaurant owner or GM can structure the bottle wine program to yield robust, bankable financial results. Combining this with an efficient, thoughtful wine-by-the-glass list is like a one-two punch that can really turbocharge your program’s bottom line. The wines-by-the-glass list plays an important role to the overall profitability your program and should be carefully selected, priced and monitored to yield the desired results.
From a financial perspective, I use the wines-by-the-glass (WBTG) list as a way to lower the overall cost of goods for my wine program. To do this, I price glass wines to yield a 25% cost of goods. When you combine this with the 33% costs from a properly structured bottle list (see Part I), the overall cost for your wine program should land somewhere around 27 – 28%. Most operators consider this an extremely lean and profitable program. But achieving these margins is not as easy as it seems and there are a few common pitfalls that you’ll need to nip in the bud to maximize the profitability of your program.
Below are a few profit-draining pitfalls that can really hurt your bottom line:
- Program Costs: Every WBTG program has a waste factor or ‘program cost’ that has to be factored into the pricing so that the net costs still stay around 25%. Spillage, waste, over-pouring and theft are inevitable and, while easily corrected by a diligent manager, the costs still need to be accounted for in the overall pricing. In addition, many establishments give their guests the opportunity to sample the wine before ordering a full glass and will happily accept a glass returned by a guest who does not like the selection. These activities, while essential for building trust and good will with your customers, all cost money and can increase your pouring cost for your WBTG. To counter these built-in costs, I like to add a fudge factor of 3 to 5% to the cost of the by-the-glass list to achieve my actual target.
- Too Many Options: An entry-level by-the-glass program consists of about a dozen wines: 4 whites, 4 reds, 2 blush and 2 sparkling. More sophisticated programs ladder up from there. However, a program with 30 – 40 wines-by-the-glass can be a recipe for disaster when it comes to your costs. Consider that 30 selections by-the-glass equals between 100 to 120 glasses of wine open at any given time – and an open bottle of wine is a perishable product. Having this amount of wine open at one time requires a very high volume of sales to maintain your profitability – even with a sophisticated wine preservation system. This opens the door for significant waste, spoilage and profit shrink. Unless you are intent on opening a fine dining or wine-themed restaurant, it’s best to keep your by-the-glass program as streamlined and profitable as possible.
- Vinus Obscurus: This is a Latin-sounding term I made up for wines that nobody has ever heard of. Nothing can drag down a wine program more than a collection of ‘pet’ wines selected by an overzealous sommelier. Not only do these wines tend to gather dust in your cellar, but they also infuriate your diners who would love a medium bodied Chardonnay to go with their salad. Let your wine team explore emerging wines and wine regions where appropriate, but don’t let the wine list get too erudite or niche.
- Prestige Selections: While offering prestige wines-by-the-glass can be a great positioning statement for your restaurant, having Opus One or Dom Perignon available by-the-glass can also wreak havoc on your costs. For wines at this price point, you can’t charge anywhere near your target 25% cost without pricing yourself out of the market, so adding them to your list will absolutely skew your cost of goods. In addition, these wines will likely be ordered by guests who know something about wine– so you can’t have them sitting in the back-bar cooler for days on end. While top name wines by the glass can add prestige to a fine dining restaurant or wine bar, you have to weigh this against the potential waste and spoilage that is likely to occur. If you absolutely must go forward with these kinds of selections, it is imperative that you invest in a wine preservation system (like Coravin or Cruvinet) to preserve the life of these big-name selections.
- Oversized Glassware: Restaurant wine guys love oversized wine glasses. These elegant 16 – 20 oz. stems are beautiful, dramatic and can really allow the wine to open up in the glass. Unfortunately, they can cause huge issues with your by-the-glass program. The reason is that the proper by-the-glass pour, between 5 ½ and 6 ounces, looks underwhelming in a 16 oz. glass. Your tipped wait staff know that a wine glass that is only ¼ full will raise eyebrows with their guests, so over-pouring will al most always be a big problem. To head this off, invest in specific glassware for your by-the-glass program. Some restaurants even go so far as to etch a line or logo onto the glass that defines where the bartender or server should stop pouring to get the right pour size. A smaller 12 oz. glass may not allow your wine to breathe as much, but it also won’t cause you to hyperventilate at the end of the month when you see your pouring cost.
Your wines-by-the-glass program is a great way to drive down your overall wine cost and flow more money to your bottom line, but it requires clear-headed thinking and a solid strategy to get it right.