### Great restaurant wine pricing concept

Last night my wife and some if her girlfriends tried out a local restaurant called Bru, in Lake Forest, CA. She said the food was very good and the value equally good, but was most impressed by their wine pricing formula. There have been many topics here about restaurant wine pricing, so I thought I'd share.

Bru prices all their wines at standard retail (I'm familiar enough to say they're very close to local non-discount pricing) PLUS a flat \$10 corkage fee. The list could be a lot better, but it's decent enough...... and offers great value. Only thing is you need to steer clear of the lowest prices to enjoy the value.

It'd be interesting to see if their sales are greater than the standard 2x+ retail formula. I think we've found a new spot on our 'regular' list.

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1. As I've posted here many times, when I worked at Pearl Alley Bistro in Santa Cruz, CA back in the 1980s, our policy re: the wine list and by the glass (BTG) pricing was as follows:

Wine List: All of our 200+ wines were priced at full retail + a flat \$5.00. Thus, as you point out, the more expensive the wine, the better value it was on the wine list. When Opus One was first released, it was \$200/6-pk wholesale -- thus, it carried a \$50 suggested retail. It was on our list for \$55. A wine with a suggested retail of \$10 was on the list for \$15 . . .

BTG: We took whatever our wine list price would be, added sales tax, divided by five, and then rounded up to the closest nickel. We poured six glasses per bottle. For example, presuming 5% sales tax (for ease of math), that \$10 retail bottle that was \$15 on our list would be \$15.75 including tax; therefore it would be \$3.15 by the glass. Opus One? \$55 on the list plus tax is \$57.75 -- divide by five and a glass would cost \$11.55.

All I can say is that we sold an awful lot of wine! ;^)

6 Replies
1. re: zin1953

Mention was made below of corkage . . . I forgot to add that part.

At Pearl Alley, our corkage policy was exactly the same amount *over* the retail price that bottles appeared on our list: \$5.

I cannot speak for Bru, the restaurant in the OP, but at Pearl Alley, there was *never* any question about the quality of the wines on our list. It ranged from (e.g.) Côtes-du-Rhône to Côte-Rotie; from Mâcon-Villages to Corton-Charlemagne; Muscadet to Pouiily-Fumé . . . same with Italy and Germany (though to a lesser extent). We were very light on Spanish table wines, had nothing from Austria (anyone remember the glycol scandal?), New Zealand, or South America . . . and the only thing I recall having from Australia was Grange.

California made up the majority of our wine list (but not necessarily our BTG pours), focusing on wines from the Santa Cruz Mountains (local to us), but with lots of wines from all over California -- everything from Santa Barbara and Carneros Pinot to Chalone Pinot Blanc and Chappellet Dry Chenin, and lots of Zins, Cabs, Reserve Cabs, etc.

We had no generic wines whatsoever. Our least expensive BTG would be something like an Entre-deux-Mers dry white Bordeaux (Sauvignon Blanc) or perhaps an Italian Chardonnay from the Alto-Adige; a Beaujolais-Villages or Salice Salentino -- wines like that.

But in addition, we had a wide array of Sherries and Porto offered BTG, as well as always offering a Sauternes, and occasionally a Muscat Beaumes-de-Venise. We had a range of Sherries, from Fino to very old dry Olorosos, to high-end sweeter Sherries like Lustau's Old East India (now simply "East India"). For Porto by the glass, we always had at least two Vintage Porto bottlings, often three, and usually a Vintage Character Porto as well. For example, we'd pour 1970 Taylor's and 1963 Warre's . . . and for a very long time we offered 1945 Croft for \$12/oz. After going through two cases of Croft, we switched to 1945 Dow's.

FWIW, we installed one of those large, industrial sized gas bottles of nitrogen and gassed every open bottle every night at closing, and sampled them before opening the next afternoon.

1. re: zin1953

I wouldn't have expected anything less from you. Bru is in an area where I doubt they'd find an audience for a really special selection. Not that I doubt it might work if the owners had the inclination, but I don't think it would be a really big draw.

1. re: zin1953

This is making me nostalgic. Not only is that my kind of wine list (even apart from pricing), it also reflects an earlier age of the US wine market.

When California restaurants could, and did, readily move a decent Mâcon-Villages (and probably, very few US customers complained "why don't they show the type of wine on the label??").

When a restaurant near a major AVA like Santa Cruz Mountains didn't feel obligated to offer almost exclusively wines from right there.

When alcohol levels still ran the traditional 12-13%, even in California.

When most wine-enthusiastic customers listened to knowledgeable wine staff, and developed their own tastes, rather than jabbering about how wines are "rated."

(Apropos nostalgia: not only do I remember the Austrian "glycol" scandal, I was there at the time -- and again when it "ended" [1993] -- and I know it for the largely journalistic screw-up that it was. Even standard wine reference books like Jancis Robinson's Oxford Companion got the episode's origins wrong. Subject for other threads.)

1. re: eatzalot

Further tread-drift: I absolutely LOVE the fact you've described the Santa Cruz Mtns. as a "major AVA," when most people around the country don't even know it exists!

1. re: zin1953

'LOVE the fact you've described the Santa Cruz Mtns. as a "major AVA," when most people around the country don't even know it exists!'

Well, the clueless will always be with us. My comment reflected neither TV-culture "lifestyle" fads nor corporate marketing, but a mainstream perception visible among longtime serious US wine enthusiasts, the trade, and especially, internationally.

The most consistently esteemed US winemaker for decades, Paul Draper (Ridge Vineyards), has worked there of course since '70 or so, and earlier, back to the 40s IIRC, Martin Ray, the US pinot-noir pioneer, at what's now Mount Eden. Numerous respected wineries now operate there. You must remember several years ago Robert Parker's wine website (when it was still public) polled for the best-respected US winemaker, and Draper was #1. In historic European blind taste-offs (1976 Spurrier, the more decisive but less-reported 1979 Gault-Millau "Wine Olympiad," and the 2006 Spurrier re-match), Monte Bello came out at or near the top red among international experts tasting blindly. (Draper even helped popularize Zin in the US as a respectable stand-alone red varietal.)

I pulled out Schoonmaker and Marvel's landmark 1941 book "American Wines." Schoonmaker consulted the California viticultural experts (Amerine, Olmo, Winkler) who, based on agricultural conditions, had classified which parts of the state held most promise for which, if any, wine grape species. Quoting a summary directly from the book

"California's best table wines, whether white or red, may be expected to come from the Santa Cruz Mountains (Santa Clara County), from the Napa Valley, and from Sonoma County. . ."

If someone is unaware of the region's importance for California wine, that just means they're not much acquainted with the topic.

The extremely hilly S C Mountains setting means that touring its wineries demands long, sometimes bone-rattling drives even between properties that look close on a map. Less suited to breezy drinking tourism or expensive vacation spas than some wine regions. Maybe for the best.

1. re: zin1953

Anyway, nowadays if you go anywhere in the US with a significant local artisanal wine industry, whether it's Finger Lakes in New York State, or Anderson Valley or El Dorado County or Calaveras County in California, restaurant wine lists often seem like they were assembled by the local winery trade association.

Not INclusive of the local produce, as in the list you described; more like EXclusively those products.

2. 2x + \$9

So sue me!

(Well, our employees who worked at least 20 hours/week got medical insurance in those days.)

2 Replies
1. re: collioure

Huh? 2x what?

1. re: Midlife

2 x wholesale cost + \$9

2. Definitely like this concept... they charge the same price i would pay ("retail"), then charge me the exact corkage I would pay if I brought my own bottle that I had purchased at retail (\$10 corkage)... so what's not to like about this policy???

Only question, like you say, is how good their wine list is in the first place... I would still BYOB if I couldn't find something roughly as good as I would otherwise bring myself.

12 Replies

See my post above . . . despite having some 200 wines on our wine list, we welcomed BYOB and did exactly as you describe: our corkage fee was exactly the same \$5 that we would otherwise tack on to the retail price of a bottle for our wine list.

1. re: zin1953

Wonder why more places don't do this. Makes a world of sense, so much easier for the restaurant and I'd think customers would like it also.

1. re: c oliver

I have no idea, but I do know what I'd do differently . . . raise my "flat \$5 over retail" to either \$10 or, more likely, \$15. (Everything's gotten more expensive since the 1980s.) Or maybe add \$15 to every bottle that retails for less than, say, \$50, and \$10 for everything with a retail price of \$51-100, and \$5 for everything that's \$100+ . . .

I haven't thought this through, mind you, it's just off the top of my head . . .

1. re: zin1953

Yeah, I think the \$5 is WAY too low. And a sliding scale based on the price of the wine sounds good also.

1. re: c oliver

Or a corkage based on percentage of the retail price.

1. re: ipsedixit

But that gets into pricing each one individually which seems as labor intensive as the current method. But not a bad idea at all.

2. re: zin1953

I see the logic, but the formula is the opposite of what most people would expect. Discourages lower priced offerings, which makes total sense, and says the more \$ we make the lower the fee. I get it, but maybe too 'clever' for our local market. Just thinking out loud.

1. re: Midlife

Well -- hypothetically . . . as this is all we can do (I don't own a restaurant) . . . .

My "off-the-top-of-my-head" random thought, as described above, stemmed from the fact that, say, a \$30 bottle (retail) of X would still be thought of by most patrons as a decent -- if not very good -- buy if it were \$45 on a wine list. At many other places it would be \$50, \$60 or even more! But the bottle that retails for \$150 would often sell for \$300-\$500 at a fine dining restaurant. (Yes, we're not talking about The Olive Garden or Sizzler here.) But on "my" wine list it would be \$155 -- and that would be a GREAT buy! Patrons who wouldn't dream of buying that bottle at \$300-\$500 may very well leap at the chance to buy it at \$155 . . .

From a profit perspective, and presuming no discounts or post-offs on the invoice (i.e.: "case one pricing" with no broken case charge), that \$30 retail bottle cost the wine store \$20. At \$30, the store is making 33.3% beginning gross profit. The same bottle costs the restaurant the same \$20, but if I'm taking on an extra \$15 (which would also be the corkage fee, BTW), I end making 55.5% bgp. More importantly, however, my bgp translates in real dollars to \$25.

The \$150 (retail) bottle cost \$100. At \$155, the restaurant makes 35.5% bgp (versus 33.3% for the retail store), but I'm realizing \$55 in bgp. What's just as important is that the high-end wines on the list aren't decoration, but they actually sell! ;^)

1. re: zin1953

I spent a good part of my business life in retail. The department store I started at based success on margin percentages and pre-tax profit percentages. I then spent another 3 years at a major fashion apparel chain operation that emphasized dollars to the bottom line, not just percentages. The difference was a revelation.

1. re: Midlife

Indeed! ;^)

3. re: c oliver

Some years (maybe a full decade?) ago, there was a restaurant study on wine markups. From the survey that the magazine (trade) did, the restaurants, with markups, similar to what Midlife and Jason outline, made far more profit. The restaurants with the obscene markups did not fare well. I have looked for that survey, with no luck, so far.

Hunt

1. re: Bill Hunt

I've read the same study, and others like it. In terms of moving wine, selling wine to more tables with more meals in the restaurant, the difference that the lower pricing model made was striking.

2. That concept is fairly common with restaurants that are associated with wine stores. There is a restaurant here in DC that charges \$20 over retail for wines. And with the fantastic list, it makes for some absolutely great deals. Unfortunately, it is closing soon for other reasons. They also offer free corkage on certain nights (Sun - Wed) and some nights offer 50% off wines over \$100.