An unscientific look at local by-the-glass wine pricing [moved from Boston board]
- MC Slim JB Jul 26, 2007 10:15 PM
I got some fellow Hounds a bit worked up recently by saying that I think The Butcher Shop’s wines by the glass are overpriced. It was just my gut feel, but several Butcher Shop fans vigorously disagreed. Nobody had any real data, so I thought maybe I could do some research to try to bring some facts to a discussion that so far had been just competing impressions.
So I did some sampling of by-the-glass prices from three lists that were put together by respected local wine professionals: Coda (Deborah de Haro), Troquet (Chris Campbell), and The Butcher Shop (Cat Silirie). Coda has fairly wine-ignorant servers pouring very modest wines in not very nice stemware, likely not at proper cellar temperatures – quite unlike the other two places -- but it’s a thoughtful, budget-minded list I admire. Troquet and The Butcher Shop have many admirers among local Hounds and clearly position themselves as havens for wine lovers.
I multiplied by-the-glass prices into full bottle prices (5 times 5oz pours at Coda and The Butcher Shop, 6 times 4oz pours at Troquet), and compared them to a typical consumer retail price gleaned from Google searches of US wine retailers. I was surprised by the results:
Coda: consistently a 280 to 320% markup (example: 2004 Santi Valpoicella Ripasso, poured here for $8/glass, which works out to $40/bottle, vs. a typical $14/bottle retail price. $40 divided by $14 = 290% markup). This strikes me as a pretty typical bottle markup for many restaurants, though is perhaps low for an individual glass.
Troquet: a shockingly low 140 to 160% markup (example: 2001 Rafanelli Zinfandel $11.50/4 oz glass, which works out to $69/bottle vs. a typical $50/bottle retail price. $69 divided by $50 = 140% markup).
The Butcher Shop: much more variable, with markups ranging from 260 to 550%, but most falling in the 450 to 500% range. Example: the 2005 Costaripa Marzemino, poured here for $14/glass, which works out to $70/bottle, vs. a typical $14/bottle retail price. $70 divided by $14 = 500% markup.
(I can only imagine what this analysis would yield at truly egregious gouger like Fleming’s.)
Caveats: This is only a snapshot looking at five or six by-the-glass wines from current lists. There are outliers on either side, an occasional great bargain or even higher markup. Using retail prices to calculate “markup” is probably sub-optimal, though it’s the only baseline I can think of with readily available, verifiable data. I might be incorrectly estimating the pour size at Coda and The Butcher Shop (Troquet’s pours are very precise). You could probably find retail prices that are both higher and lower than the ones I used, though I tried to pick a median one. Perhaps I'm failing to factor in important costs (real estate, storage, shipping, stemware, etc.) My math skills aren't what they used to be. Maybe the whole analysis overly simplistic and half-assed in some way that hasn't occurred to me.
But I did try to come up with a representative sample, and not cherry-pick for results that supported my hypothesis. My methodology is admittedly rickety, but it’s the best I can come up without the benefit of insider information. I’d welcome any refinements or alternative analyses anyone would like to propose. But at first blush, I’d say my gut feel about The Butcher Shop was reasonable. (I can provide more raw numbers if folks want to see them.)
There’s a separate debate worth having about whether the wine markups at any given Boston restaurant are justified by its intangibles: atmosphere, unique/unusual selections, staff knowledge, accompanying food, etc. I understand how someone who loves The Butcher Shop could look at these numbers and say, "To me, their wines by the glass are still a good value", the operative word "value" being subjective. But I thought that looking at such hard numbers as I could find might provide a useful basis for further discussion.
Great report...thanks for doing all that research for us. My math/value obsessed SO will just love this.
I have heard this same rule of thumb cited, too, but if we can fairly assume that the restaurant's cost is well below retail, that works out to even higher markups.
But maybe the difference between the restaurant's cost (call it wholesale) and the retail cost is roughly equivalent to those other "overhead" costs I cited (facilities, labor, equipment, etc.) that my simple model doesn't account for. So maybe it's still a decent rule of thumb.
I'd welcome the addition of some facts or expertise to this discussion from you, bowmore36. There's clearly a lot I've thrown out here that's debatable -- that's kind of my object, to try and get a rational discussion going instead of just people shouting their personal viewpoints. On what do you base your assertion that "you can't assume that... no way"?
That's great, bowmore36, exactly the kind of expertise I've been soliciting in this and other related threads from the beginning. I'm frankly surprised you didn't disclose your professional credentials earlier.
Is there any way you can bring some concrete examples to the table to help me understand what's really going on at places like The Butcher Shop and Troquet?
Thanks for the great report. Your contributions are always valued but this is the kind of post that makes Chowhound the wonderful site that it is. I recall Limster posting that Legal Seafood had very fair wine prices (not sure if it was by bottle or glass) and I've always enjoyed the variety and apparent vaue of Les Zygomates for wines by the glass. It would be interesting to see how these two fare.
First, thanks MC for your usual fantastic contribution.
I was recently at an AIWF wine tasting at Legal Test Kitchen. Sandy Block was the speaker. He is VP of Beverage Operations for Legal and a renowned wine expert. He said Legal tries to keep their wines among the lowest priced.
Petit Robert Bistro has reasonable wine prices and Geoffrey's used to have really great wine prices when they were in the South End but I don't know about their new location. The new restaurant, Gaslight, part of the Aquitaine group I believe, states that they will have wines starting at $4.00 a glass.
On a different but related subject, I have been pricing Crown Royal Manhattens at various places and strangely enough Legal's was the highest @ $10.75. The prices ranged from $6.00 @ Floramo's (yes, I know, no comparison as a restaurant but an excellent drink), $8.95 Incontro, $9.00 Gibbett Hill Grill, and $10.00 @ Sage.
"Perhaps I'm failing to factor in important costs (real estate, storage, shipping, stemware, etc.) My math skills aren't what they used to be. Maybe the whole analysis overly simplistic and half-assed in some way that hasn't occurred to me."
"(I can provide more raw numbers if folks want to see them.)"
I'd love to see all of the raw #'s. I'm working on a similar comparison. I'll share my findings when I'm done. Thank you.
Here's a representative sample, including a couple of outliers:
NV Brut D’Argent Blanc de blancs NV $8/glass $11/retail 5x8=40/11=363%
2005 Domaine L’Hortus Rose de Saignee $8/glass $14/bottle retail 5x8=40/14=286%
2006 Burgans $8/glass $12/bottle retail 5x8=40/12=333%
2003 Beronia Crianza $8/glass $12/bottle retail 5x8=40/12=333%
2004 Cuatro Pasos $8/glass $14/bottle retail 5x8=40/14=286%
2004 Santi Valpoicella Ripasso $8/glass $14/bottle 5x8=40/14=286%
NV Veuve Clicquot Brut $12.50 4 oz $39/retail 6x12.50=75/39=192%
1998 Chauteau de Fieuzal Blanc $13.50 4 oz $62 retail 6x13.50=81/62=130%
2000 Altamura Cabernet Sauvignon $18.50 4 oz $68/bottle retail 6x18.50=111/68=163%
2001 Rafanelli Zinfandel $11.50 4 oz $50/bottle retail 6x11.50=69=138%
2002 Dr. Loosen Auslese $12.50 4 oz $55/bottle retail 6x12.50=75/55=136%
2002 Bouchard Savigny Les Beaune $9.50 4 oz $36/bottle retail 6x9.50=57/36=158%
NV Nino Franco Prosecco $9/glass $10/bottle retail 5x9=45/10=450%
2004 Schroeck Ruster Ausbruch $22/glass, $20/bottle retail 5x22=110/20=550%
2004 Chateaux de Brondeau Bordeaux Superiuer $12 glass, $12/bottle retail 5x12=60/12=500%
2004 Paul Pernot Puligny Montrachet Cote d'Or $13/glass $25/bottle retail 5x13=65/25=260%
2005 Costaripa Marzemino $14/glass $13.50/bottle retail 5x14=70/13.50=538%
2005 Montirius Cote du Rhone $13/glass $12/bottle retail 5x13=65/12=542%
Before anyone starts sniping these numbers, please note my caveats above. Hope this helps!
re: MC Slim JB
Nice thread here. Now you may remember me from the earlier thread on this topic. I think a more reasonable approach to this would be to compare the exact same wines at different restaurants. Forget retail altogether. Just by starting a thread about the value of wine in restaurants you have to factor in the intangibles. If you want value wine, buy it at retail and drink it at home, then you wouldn't have to worry about the intangibles at all. I am one person of many that is from the camp that atmosphere, unique/unusual selections, staff knowledge, accompanying food, etc. all make it the total experience, and I have thought that way since honeys was wearing sasoons. I know from earlier threads on similar subject that you too are from that camp. You are a big fan of the stellar bartender in this city if i remember correctly, places like no 9 for their unique cocktails and service that accompanies them, but, are they really worth $11. An $11 cocktail has less than $2 of product in it. I think we should start a thread about liquor markups because they are truly absurd.
Places like Coda that you mentioned about could care less about what their wine cost is like compared to a place like a wine bar, because they have liquor to make the money from. Restaurant cost is not well below retail either.
I also think that you have to look at value from an entire wine list standpoint. Too many places in this city serve absolutely horrid wines by the glass and only a few places actually put a lot of time and effort into their wines by the glass selection. Places like The Butcher Shop (actually all of Lynch's places ), Troquet, Bin 26, and a few and I mean few actually put some thought into their wine lists and do not let the sales people from the distribution companies push crappy wine on them so they make more on commission. I do not wanna drink $12/gl Kendall Jackson Chard, i wanna drink tasty, refreshing wine.
There are alot of issues that can be discussed here like The Euro, prices of all European wines are rising due to the Euro. Also 2005 Burgundys are all going to be much more expensive than recent vintage because the vintage is said to be stellar, that might scare most Chowhounders away, but nevertheless there will still be value in some of the wine, like Macon. Should we be scared?
I didn't see this post of yours before, jpeso; this thread got massaged a bit by the mods before landing on the Wine board. I think I partly responded to your "intangibles" question in your other post below, basically saying that, yes, you need to factor in intangibles to judge "value", but I still think it's helpful to know approximately what the wine costs the restaurant, so you can know roughly how much the markup is, and decide whether it is subjectively worth that difference.
A lot of the factors that people cite here (the Euro, standout vintages, insurance costs, etc.) are indeed relevant to wine prices, but don't they affect all restaurateurs roughly equally? They seem far less relevant in explaining differences in pricing than rents (which vary widely by location, when the lease was struck, etc.) and market-driven pricing decisions made by the restaurateur (e.g.," How high a price will our target customers tolerate?").
The "breadth of wine offerings" is one of those intangibles: important to some, perhaps explaining higher margins, but not of equal value to all comers. I'm certainly a wine drinker who likes to see a longer list that includes unusual, unfamiliar wines that knowledgeable staff can educate me about. So those are factors in The Butcher Shop's favor, though perhaps not enough by themselves to justify a 200-300% greater markup than the equally-interesting, diverse, intelligently-staffed Troquet. I doubt their respective rents account for all that difference.
As an aside, Coda isn't trying to be in the same league as Boston's wine bars, but I think it deserves credit for bringing in someone smart to build an interesting, affordable list for the type of bar/restaurant it is. It's an approach I'd love to see emulated at more under-$20/entree places: shun familiar low-end Cali wines (junk like that K-J) in favor of lesser-known, better-value wines from Spain, Austria, South America, etc. I'm sure many folks get upset that they can't get a merlot or chard of the sort they get at Costco, but Coda uses it as an opportunity to serve them a better wine for the same money. Admirable, in my book, though it would help if their servers were slightly better trained.
re: MC Slim JB
First, let me say that I like your idea, and your results don't surprise me much. Troquet has excellent wine prices, which has been true since their previous incarnation (under a different name) in Allston/Brighton. I would have been more surprised if any other restaurant had come close to their markups.
That said, I can see a few issues that aren't covered in your caveats.
Some of these wines aren't sufficiently identified. Some producers make more than one type of the class of wine listed (e.g. "Dr. Loosen Auslese"), so it's possible that the restaurant is serving a different wine (potentially significantly more or less expensive) than the one you priced.
Another issue is that the Troquet list is dominated by older bottles. Since they cellar at least some of their own wines, they were probably purchased at far cheaper prices than current retail (especially if those retail wines have been recently sourced from Europe, where the stronger Euro has driven up prices in dollars). In addition, retail prices for older wines tend to be inflated beyond their true value. They are generally much more expensive, than, for example, auction prices for the same wines which typically have better provenance. Troquet is still charging a hefty markup, even when including the costs of storage, but it seems reasonable because retailers tend to charge a ridiculous markup on older vintages. Rafanelli is another tough one because they don't sell through wholesalers/retailers. Any retail price you see for Rafanelli Zin must be from a secondary market, and is likely to be significantly marked up by the retailer because few stores would have it, so it's not one I would use in a price comparison.
Did Heidi Schröck really make a 2004 Ruster Ausbruch for $20/bottle retail? I have seen some mis-marked bottles on the web (calling her white table wines "Ruster Ausbruch" when they are not). Ruster Ausbruch is typically a fairly expensive dessert wine, and Schröck is a well-known producer. A more normal price, say for her Ruster Ausbruch Turner would be about $40-70 per 375ml half-bottle, which would significantly affect the markup calculation.
And where are you getting 2004 Pernot Puligny Montrachet for $25/bottle? K&L, a fairly respected merchant, not known for gouging, lists it for $39.99. Zachy's has it for $44.
In the end, though I agree that at least some of the Butcher Shop's markups are pretty high. The Franco Prosecco Rustica, Brondeau and the Montirius all look clearly overpriced to me.
These are all valid points, especially about potential confusion between under-identified wines. As I said, I expect folks to find the wines I've cited at both higher and lower prices online (I didn't save my web searches, but I came up with all these figures yesterday.) Your point about Troquet's cellaring is very useful: it helps explain some of their dramatically lower markups.
But I think it's fair to say, despite some room for debate about specific numbers, there are some rather clear trends in how each place prices its wines by the glass.
IIRC, the rieslings at Troquet are all Urziger Wurzgarten -- Kabinett, Spatlese and Auslese. However, they are currently serving all the '05s (very rich), not the '02s, so that's not from the current winelist -- they haven't served the '02 for a couple of years (went through the successive vintages). The '02 Bouchard pinot noir hasn't been on the list for a long while too. They've gone through 2 other red burgundies on that spot in the winelist.
overproofed.... i really like your insight and you seem to have great knowledge of this subject.
to that end, the use of google to find retail prices has a serious flaw. the prominent retailers/auctions on the web such as zachy's, K&L, 20/20 wine merchants etc.. are in other states first and foremost. state by state, taxes, importing, distribution will effect pricing by quite a bit.
for instance, florida has no state tax yet they have consumption taxes that will increase the pricing of liquor, wine and others.
states that allow importing and distribution under the same roof can have significant price differences from those that don't allow it. there are multi-layered distribution states in which pricing will be much higher than the latter.
as jpeso mentioned... comparing retail to restaurant never translates well. and it's never fair to say restaurants get better pricing then retail. that is completely inaccurate.
floor stackers at martignetti??? come on!!!!
once again... going to a restaurant such as tbs and finding wines that aren't available most other places makes it that much more enticing to shell out a few extra bucks. the majority of restaurants use the chardonnay, cabernet, shiraz by the glass model. (lame)
those who seek out the interesting wines should be able to command a bit of a premium for the hard work they do. why cheer on someone who slaps together a run of the mill wine list, and doesn't know how to store and serve wine?? it's perpetuating the lack of excitement at most restaurants.
i think there is also an important idea that hasn't been touched on...
an $18 glass sounds expensive, no argument from me. that suggest the bottle should be around $72 if my math is correct. the incentive is to be able to try an interesting glass of wine without having to invest a lot of money. that sounds like a pretty good deal to me. not to say you cant find interesting glasses for $7 or $8 but at that point a bottle isn't too far out of the question.
I agree, bowmore36, that there are higher and lower prices to be found for the examples I've cited, but is the variance so great as to completely invalidate the model? If I can find a wine at retail in five different states around the country for $40, what's the likelihood that the price is going to be completely different (say, $20 or $80) in MA?
I agree entirely (have said it several times in this thread already) that there is value in a wine list with diversity and little-seen wines; I seek those out myself. But the subjective assessment of "value" is not what I'm aiming at here. I'm trying to find a quasi-empirical method of gaining some insight into how much restaurants mark up their wines over cost, so you can get a rough idea of how much the price you're paying for the glass exceeds that cost. That's a potentially important data point for helping you decide whether it's worth the markup (a far more subjective question).
I'm not arguing for cheap wines: I deliberately used the example of Troquet, another wine connoisseur's restaurant that seems to mark up its wines much less while pouring wines of similar rarity and interest and price to The Butcher Shop's.
I'd buy the argument that an $18 glass of wine is a cheap way to experiment with a costly wine -- if the wine actually retailed for $72. But that's not what's going on at The Butcher Shop: for what you're paying for a single glass, you could get almost an entire bottle at retail. A better argument would be "That wine is hard to find at retail around here, so the 450% premium is worth it." Again, that's a more subjective argument, one that places a very big premium on the wine's rarity among local retailers, and assumes that every wine they serve is very hard to find locally, which I don't believe is true. (TBS does have some exclusives, like that '06 Loimer Gruner Veltliner "Cuvee Cat".)
I guess it's true that buying one glass before you buy a bottle *at the same restaurant* reduces your risk of getting a bottle you're not in love with, but still has no bearing on this discussion of relative markups among competing restaurants.
re: MC Slim JB
so take everything else out of it and simply identify the quality of a wine in question. is it worth the price? can you compare it to others of its origin? can you compare it to others at its price point? can you compare it to others of the same varietal? and provide the knowledge, as opposed to collecting data of wine prices on the internet and/or retail? that what my comments intended
I'm hardly trying to diminish the importance of wine knowledge, expertise, and connoisseurship, bowmore36 -- to say nothing of the sheer love of wine and the pursuit of its pleasures. But I don't think my goal here should be that hard to grasp, especially to a wine professional of your background.
Wine cost to the restaurant and the subsequent markup to its by-the-glass price -- that's the one data point I'm trying to build some clarity on. Of course -- clearly, patently obviously -- that's not the *only* way to evaluate wine. You may even argue that it's utterly unimportant compared to the more rarefied qualities you cite. But to any Chowhound who isn't independently wealthy, I think my investigation, however flawed, might be of some interest: Who's giving you a better deal on such wines, as measured in this one particular way?
I'll leave it to better trained, more experienced, more sensitive critics of wine to apply ratings to a particular wine's quality. I'm focusing on one very specific, limited definition of a wine's value. It's not the only one, nor the most important one: it's just the one I'm looking at right now.
While I'm not a wine professional, I resist the notion that restaurant wine pricing is analysis-proof. I don't pretend that I've stumbled on some optimal method to uncover costs. But I think the topic of cost vs. price is relevant, and in fact worthy of discussion without touching at all on whether the wines themselves are worthy. I'll again salute the enormous talent of the wine program managers involved: let's all take it as a given that they're pouring quality wines, not junk.
Rather than discuss non-cost-related issues regarding the quality of wine (maybe that's a new thread you could start?), I'm looking for any insight Hounds can bring to my examination of wine costs vs. by-the-glass prices in Boston restaurants. Given your expertise, it seems like you're in the perfect position to debunk my assumptions, to bring some real-world facts to my amateur hypothesizing, to help everyone here understand how things actually work. I and a lot of Hounds would thank you for that.
I revisited your point, overproofed, about the 2004 Paul Pernot Puligny Montrachet. I can't figure out where I found that $25 retail bottle price; let's assume that's a research error on my part. It makes the one favorable outlier in my Butcher Shop research stick out even more as a bargain.
Let's go with an average of the prices you cited as more typical:
$13/glass $42/bottle retail 5x13=65/42=155%
So there's one wine BTG at The Butcher Shop out of all the ones I sampled that appears to be as good a bargain (only a 155% markup) as Troquet offers on just about all of its wines BTG.
This Montrachet is not on The Butcher Shop's current list, but was a nightly special last week. I wonder if maybe the nightly specials are deliberately priced more favorably than the BTG wines on their more permanent list. This would be a tremendous hidden deal to uncover, if true.