Research info shows menu price/wine preference correlation

Just now received this press release from my friend Paul Wagner at Balzac Communications. Thought I'd pass it along sans comment for your information.

"For Immediate Release
February 28, 2013
Contact: Paul Wagner
Phone: 707.255.7667
Email: pwagner@balzac.com

Tastevin Research Shows Diners' Preferences


Santa Rosa, CA – Tastevin, a new tablet wine list, is now providing a broad spectrum of information about on-premise wine sales to restaurants across the nation. A recent analysis of more than 750,000 restaurant wine purchases shows remarkable differences in consumer behavior based on average entrée price on the menu. The research shows that by-the-glass wine sales are booming, and that diners are drinking different kinds of wines depending on the price point of the restaurant.

"We broke the data into three groups, based on entrée price," says the co‐founder and CEO of Labrador OmniMedia, Josh Hermsmeyer. "And we found some significant differences in consumer behavior based on those differences. The full study is being published by Wine & Spirits Magazine in the April 2013 issue."

Diners at lower priced restaurants (entrées between $10 and $30) preferred red wines, with the top wines being blends, Cabernet, and Pinot Noir; but Malbec and Prosecco were also important here. Sixty-nine percent of all wine sales in these restaurants were by the glass.

In contrast, at medium priced restaurants (entrées between $31 and $60), Chardonnay emerged as the top varietal wine by the glass, while Cabernet led in sales by the bottle. But fully 80% of the wines sold in this segment were by the glass. "It's astonishing how important these by-the-glass programs have become," says Hermsmeyer.

In restaurants where the entrée price was over $60, the largest segment was sparkling wines, followed by Chardonnay. Even in these restaurants, 66% of wine sales were by the glass.

"This opens a new window on wine sales on-premise in America," says Janeen Olsen, wine marketing professor at Sonoma State University, and co-author of Wine Marketing and Sales. "This is exactly the kind of information wineries and restaurants need to make smart marketing and sales decisions in the future."

"We are delighted that our Tastevin app is now providing such rich data to many of the top restaurants in the nation," says John Jordan, co‐founder and Chairman of the Board of Labrador OmniMedia. "This really validates that our product is the wave of the future."

About Labrador OmniMedia
Labrador OmniMedia is reinventing on-premise beverage sales with Tastevin. Founded by industry veterans John Jordan and Josh Hermsmeyer, Labrador OmniMedia is obsessively dedicated to creating technology that makes their beverage lists the easy choice for diners, restaurateurs, and wholesalers alike. The application is currently in use in a number of top restaurants around the country, including Downtown Dining, Hawthorn, Hyatt Irvine, Michael's on East, Old Major, Pacifica Group of Restaurants, and Auberge du Soleil in the Napa Valley."

Two random comments:

1. I'm stunned that "medium Price" entree goes up to $60. That seems high.

2. I wonder if they are collecting sales by unit or by dollar amount and if my wife and I buy 4 wines by the glass (sparkling wine + dessert wine) and a bottle of Cabernet with the entree how is this counted? 4 of the 5 things we purchased were "by the glass" (80%) but by volume the glasses aren't 80%.

Yes, agree with Tom. $60 main courses (I realize the fight against using "entree" as main course, which makes no sense whatsoever, is lost but I still resist) would be in the upper 1% of restaurants I'd think. Pretty much any place with mains over $50 probably prices by set menus, that I can think of. I can't think of an a la carte restaurant with dishes over $60.

Those BTG figures are interesting, but there's not really a clear pattern. I mean, at least 2/3s of sales at all levels.

Chardonnay and Cabernet are popular. What a shock!

You're more likely to find Malbec at an inexpensive restaurant than

And more sparkling wine at very expensive restaurants (as often used for celebrations, and Americans mostly only think of Champagne for celebrations, not surprising).

My takeaway:

Why would anyone express surprise at the dominance of wine-by-the-glass at restaurants. We've know that for years. The dynamic shift from WBTG to bottle sales shifted a looooooong time ago in American restaurants.

Heck, it's even now making an impact in European restaurants. It used to be either carafe or bottle. Now it's not at all unusual to find carafe---WBTG specials---Bottle offerings, as well as wine by the glass/by the course pairings offering a food/wine degustation.

I agree that this raises a lot of questions, and perhaps isn't as informative as it should be. On the other hand, ANY researched information out of the restaurant industry is appreciated, because historically there's been little information to be had, mostly by guess and by god.

Dale: You're more or less correct about Malbec, but in the last couple of years there has been a shift in the perception of the variety, and now you can find upscale Malbecs (both Cahors and California) on high-end restaurant lists. So it's changing; Malbec is still primarily low-end Argentinean, but it's shifting upward in price points and availabiilty/acceptability quite a bit. (No stats, just my perception.)

No data just shooting from the hip......

Also, a signficant % of diners seem to be intimidated by the wine lists at anything but the low end chain type places (entrees $10-30) and so they are much more likely to do WBTG if they opt for wine.

I had a recent experience at what I think is a higher end restaurant (Troquet) where 6 people spent $1,000 (entrees were far less than $60 though) and one person who is not a sophisicated food/wine geek wanted to order WBTG. Several of the wine geeks thought that was a bit odd. Point being I think the typical reader of this discussion board is probably very different from the typcial restaurant wine buyer and that typical buyer is far more likely to do WBTG.

Also, a signficant % of diners seem to be intimidated by the wine lists at anything but the low end chain type places (entrees $10-30) and so they are much more likely to do WBTG if they opt for wine..

Why is by the glass less intimidating? Because they can just ask for 'glass of merlot'? I would think they could just as easily ask for 'bottle of merlot'?

I would imagine that a bigger factor would be desired amount of consumption. People might not want to drink more than a glass or two and might not be concerned about maximizing their dollar per ounce of wine ratio.

You may be right but I just think that ordering a glass of Merlot is far less intimidating than looking at the 15 Merlots on the wine list. I just think for some that picking up and opening the wine list is intimidating/foreign.

You may be right but I just think that ordering a glass of Merlot is far less intimidating than looking at the 15 Merlots on the wine list. I just think for some that picking up and opening the wine list is intimidating/foreign.

I agree with you, Tom. For lots of people a wine list, especially a long wine list, IS quite intimidating. People don't want to reveal their lack of knowledge to their companions, and especially to some supercilious uniformed person perhaps wearing a silver ashtray on a chain (I know, but some still do) who they just know are either secretly laughing at them or trying to con them into buying an expensive bottle.

But even in the best of places, the most comfortable of places, trying to make an instant selection when you're not sure of what you're looking at can be off-putting to the extreme. Add in the bottle price shock--that wine costs THIS MUCH a bottle? and it's even worse.

Whereas what little research there is indicates a wine btg list is usually much shorter, offering far fewer decisions to make and the price shock is far less (oh, it only costs this much a glass---so if I don't like it I'm not out that much). Also, btg slows down consumption for most people? If you have the bottle, you'll drink it; if you have a glass, you'll think before ordering another full glass.

Also gives you the chance for diversity. Why are tapas so popular these days? You can sample lots of different foods and preparations, instead of being stuck with one piece of meat, one fish, one sauce. Why not apply that to wine? Have a half glass or glass of a different wine with each different course.

Lastly, wine btg gives you that valuable chance to sample a wine, just to see if you like it enough to go out and buy a bottle at retail (that was more important when there were fewer opps to try things at beverage stores).

Another key factor that comes to light when you talk to people is that many assume that the btg selections are chosen by the proprietor for particular reasons of style or quality. Would that it were so, but usually the wine decider chooses them more or less based on what's being discounted most on that day, sad to say, and he/she selects on that criteria. Not always, but more often than not it is the singular deciding factor.

Plus, the wbtg list is usually short and concise enough that you can fall back on "Oh, I'll have that Chardonnay" and be done with it.

Another factor....given the 3:1 restaurant to retail price ratio I see in too many restaurants (a whole 'nother issue, I know), ordering a bottle of wine may be simply prohibitive...especially if people at the table want different things.

One Yountville restaurant had maybe five bottles on a huge list below $60. An $8 glass of cheap, friendly white wine makes sense at these price points!

The situation Brian mentions -- when people order different dishes -- is a darned good reason to order by the glass. Everybody has some vague idea that different wines go better with different things, which are often wrong but certainly provide incentive to buy by the glass.

But this discussion makes it clear that people who run restaurants have difficult wine decisions to make. People like to order by the glass, so maybe it's a good idea to add more by-the-glass wines to the menu, but then people feel uncomfortable buying wine if there are lots of choices. And so it goes.

I would imagine that a bigger factor would be desired amount of consumption. People might not want to drink more than a glass or two and might not be concerned about maximizing their dollar per ounce of wine ratio.

Also, when ordering by the glass they don't have to commit to a whole bottle. Especially if the person ordering isn't comfortable with wine, they may hesitate in choosing a bottle if they aren't sure whether they will like it or not. If they order a glass and aren't a fan, then they can just try something different, rather than going through the whole charade of sending a whole bottle back and labeling themselves an indecisive/uninformed customer and possibly being embarrassed in front of their dinner companions.

The situation Brian mentions -- when people order different dishes -- is a darned good reason to order by the glass. Everybody has some vague idea that different wines go better with different things, which are often wrong but certainly provide incentive to buy by the glass.

But this discussion makes it clear that people who run restaurants have difficult wine decisions to make. People like to order by the glass, so maybe it's a good idea to add more by-the-glass wines to the menu, but then people feel uncomfortable buying wine if there are lots of choices. And so it goes.

Clint, you're correct. There's a fine line somewhere, but no one knows where it is. I've seen everything in wbtg lists from sad little carafe selections of predictable and booooring to over-enthusiastic and obviously poorly managed btg of over 100 wines (and how could anyone manage the freshness of that many wines without a robust system? And even then...)

There's too little choice on one end; too much on the other end; and very finely nuanced and well thought out lists in the middle. But when you do find one, it's a lovely experience.

Diners at lower priced restaurants (entrées between $10 and $30) preferred red wines, with the top wines being blends, Cabernet, and Pinot Noir; but Malbec and Prosecco were also important here. Sixty-nine percent of all wine sales in these restaurants were by the glass.

In contrast, at medium priced restaurants (entrées between $31 and $60), Chardonnay emerged as the top varietal wine by the glass, while Cabernet led in sales by the bottle. But fully 80% of the wines sold in this segment were by the glass. "It's astonishing how important these by-the-glass programs have become," says Hermsmeyer.

The restaurant I work at falls roughly in between these categories - with most entrees between $25-40. The majority of our bottle sales are red wines, but that varies seasonally - as our summer menu features lighter dishes and much more white-friendly components. I would have to pull up the data to be certain, but judging by an average night's sales, our bottle sales are roughly 50-75% of a night's wine revenue, much higher than in the survey for any category. I believe part of the reason for this is we don't grossly over-price wines for our market, and have a very exclusive/boutique type list, where 85% of the wines we sell can't easily be found anywhere else in town (retail or restaurant).

I'm quite surprised at the high percentages of by the glass sales in this study. Perhaps the restaurants surveyed "dumb down" their btg list, leaving only well-known and popular varieties/regions, making their lists seem unapproachable and obtrusive. In this case, I can see where someone would just go for the Chardonnay or Merlot they recognize rather than leafing through pages and pages of obscure regions and wines and being left out of dinner conversation temporarily. The restaurant I am at offers about 15 btg selections (2-3 sparkling, 6 white, often a still rose, and 6-7 reds), but we try to keep them a bit "wine-geeky". We don't always have the fall-back Chardonnay or Pinot Noir, but may offer an oaked white Rioja or a cru Beaujolais instead. In doing this, guests are able to try wines in the style they like, but are also forced to try something new. If they just won't have anything but their dear Chardonnay, they are invited to choose from a range of bottles in a variety of price points.

The situation Brian mentions -- when people order different dishes -- is a darned good reason to order by the glass. Everybody has some vague idea that different wines go better with different things, which are often wrong but certainly provide incentive to buy by the glass.

But this discussion makes it clear that people who run restaurants have difficult wine decisions to make. People like to order by the glass, so maybe it's a good idea to add more by-the-glass wines to the menu, but then people feel uncomfortable buying wine if there are lots of choices. And so it goes.

Clint, you're correct. There's a fine line somewhere, but no one knows where it is. I've seen everything in wbtg lists from sad little carafe selections of predictable and booooring to over-enthusiastic and obviously poorly managed btg of over 100 wines (and how could anyone manage the freshness of that many wines without a robust system? And even then...)

There's too little choice on one end; too much on the other end; and very finely nuanced and well thought out lists in the middle. But when you do find one, it's a lovely experience.

Another solution to this issue is beefing up the half bottle options on the wine list. From what our distributors tell us, we sell more half bottles than just about any other restaurant in town. We put our half bottle section right at the top of the list, and keep them all in an approachable price point, so they are mostly in line with by the glass pricing. Then guests can still enjoy the ceremony of having a bottle presented and opened at the table, but they have the flexibility of doing a few different half bottles, rather than being limited to btg only. Many people seem to forget half bottles, but they really offer a lot of versatility.