Restaurants and Wine: A Love Story

I’ve had a few questions about restaurants and the wines that they serve. As this was a study topic for a recent WSET exam, I’ve been doing a lot of research about it lately and have some things to say. That said, I don’t claim to be an expert on anything about the decisions that go into creating a restaurant. I have no interest in doing so but admire those that undertake the complexities of an almost insane amount of decision-making that is required to get a new restaurant off the ground and then to keep it afloat afterwards. I’ve been lucky to have witnessed the start of a number of small and medium sized restaurants over the years. Some of the things that I’ve seen restaurateurs do are nothing short of super-human feats of creativity, mental acuity, and sheer mental strength.

Since this is a wine blog, the most frequent questions I receive about restaurants involve the wine list and those mysterious prices that seem to be marked up to the extreme. So what’s the deal with those exorbitantly marked-up wines on the list?

Le Wine Mark-Up

Here’s a shocking fact that I discovered when I first started studying this topic: Some restaurants don’t actually make any money on their food. To me, this is the most bizarre concept but apparently even for some top Michelin-Starred establishments, this can be the case. How can a restaurant make money serving food when the food doesn’t even pay the bills?

In short – beverages – and wine is a huge part of it.

Let me start this off right away with this; If you think wine mark-ups are high, you should see how much the fountain soda pop is marked up. It makes the wine list seem like a bargain. I would say that if the general public knew how little wine is marked-up relative to other beverages, nobody would complain about wine prices ever again. To stay in business though, restaurants need to be able to make money and if the food isn’t going to doing it, wine and beverages are going to be the most important source of capital.

There are many ways that restaurants can figure out how to price their wines. It’s not rocket science but it can be dangerous for a restaurateur to not pay close attention to it. Putting prices out of what their market can sustain is just bad business and no set of rules will work equally for different markets. The same wine at a high-end restaurant in Penticton won’t be able to go for the same price it could get in Kitsilano. While some of the suggestions for mark-ups border on greed while others are far more practical. If they choose to have even a modest wine list, they need to be able to do it reasonably well and there are extra expenses because of that:

  • Storage – Restaurants need to be sure they have enough wine on hand and that means storing the wine. Food items can be stored in a fridge, freezer, or pantry but wines need something more. Wines require a safe place that is free from vibration, temperature changes, and bright light. It also requires added security to prevent theft. Installing a proper cellar temperature- and humidity-controlled cellar isn’t cheap. Some wines will move more quickly while others will potentially be stored for much longer, sometimes years. All of these needs require investment and that requires money.
  • Staff training – You are now reading a wine blog and so therefore, you are probably knowledgeable and interested about wine to some degree. A lot of service staff are not as knowledgeable or interested, and may even be intimidated by it unless they’ve had the opportunity to work at a restaurant that has encouraged them to learn about wine. Staff training costs money for employee time, opening wines, and possibly food costs if pairings are part of the training. The really lucky staff members get to go on wine tours to wineries. I’ve given tours to many restaurant staff over the years and aside from learning about wine, the team building benefits are also huge.
  • Market demand – If people will pay for it, then why sell it for less? Restaurant are fortunate that they have an extra degree of control over their wine prices that wines stores don’t have.
  • Stemware – This is where a lot of restaurants (and wineries) try to save money. Sometimes they can get away with it if they have a reasonable glass that shows the wines well enough. Buying the cheapest ones at a bulk big-box retailer will not only make the table setting look cheap, but in a worst-case scenario also make the wines taste less than stellar. Quality stemware makes a difference, costs a little extra, and breaks as much as the cheap stuff.
  • Faulty bottles – Faulted wines are annoying for consumers but are expensive for restaurants who have to return the bottle to their sales agent or, more likely, simply write off the bottle and take the loss. Conservative failure rate estimates of wine bottles sealed with a natural cork run at 6% while new studies show 1-2% (for TCA-related faults), screw caps, Nomacorc’s engineered closures, and systems like FreshTAP can be saviours for restaurants who want to know that every ounce of wine will be saleable.

Not all restaurants can afford everything that it takes to sell wine properly and some of them may not even consider wine to be all that important to their bottom line. It depends on the market in their particular location. For some places though, the wine list profits effectively subsidizes the food and sometimes even pays for the staff salaries. Regardless of business plan, the mark-up has to match the restaurant. Toronto Master Sommelier John Szabo, quoted in a great article in the Globe and Mail article, said, “When I do get upset is when I walk into a casual place, the wine is served in a tumbler, it’s the wrong temperature, the server knows nothing about it and it’s still a 300-per-cent markup,” What is that mark-up paying for exactly?

Not staff education, that’s for sure. To me, that is the single biggest variable in making or breaking a profitable wine list and I think it’s also the easiest to fix. No service or sales staff member selling anything anywhere will be able to do it effectively without being confident and knowledgeable about the product that they are selling. I’ve given tours to restaurant staff where most of the staff aren’t familiar with wine tasting and aren’t confident in their own ability to taste. Granted, most of them are younger (early 20’s) and haven’t been truly exposed to wine culture yet. When they learn a little of the basics and experience wine in a fun and casual way, I can see the light bulb go on in their minds. I know that from then on they are going to approach their tables with a new confidence that will make selling wine that much easier. Even a small humble wine list can be made profitable with an educated staff getting behind it.

Le Wine List

The wine list itself is another point of contention with some people. Ok, it’s mostly just me but I think it’s more than just a big deal. Wine lists with wines supplied by only one supplier, such as a corporate winery or importer, are particular irksome, to a point where I simply put the list down on the table and order orange juice. It’s like going to family restaurant and being offered the same menu as a fast-food chain. I call those prefab lists “fast-wine”. I don’t want fast-wine because to me they are boring and the wine quality is never as good. I want wine that suits the uniqueness of the restaurant in which I choose to sit down. I understand why restaurants do this but as a consumer, it puts limits on the choices and very likely won’t match the food properly.

The “fast-wine” lists comes from a common technique that sales agents use to sell their products to the restaurants. I learned about it while taking the Wine Sales course at Okanagan College years ago and winery sales reps I’ve talked to since then have filled in more details since then. The sales agent will offer to build a whole wine list for the restaurant so that restaurateur doesn’t have to. It’s offered as a free ‘value-added’ service that takes that whole process off of the minds of the restaurateur who is probably only too willing to have someone help out with a complex task like that. The sales agent then creates a list (to the best of their abilities) that is suited to the menu (to the best of their knowledge of it) and, voilà – a “fast-wine” list.

Of course when selecting the wines, they will select most if not all from their company’s portfolio of wines that they are selling. The sales agent can offer further volume discounts for being the house wine (the least expensive wines on the list that available by the glass, half-litre, bottle, or litre) which is where the real sales volume is. The sales agent may get added commission for selling a lot of product to one place so the incentive is there to sell as much as possible efficiently. The restaurateur gets a full wine list and a single contact to make all of their wine purchases making re-ordering easy. Win-win right?

I would say that the customer is the one that loses. From my point of view, it’s the easy way out for a restaurant to sublet their wine list to a sales agent. Assuming that the sales agent is good at his or her job, they are probably going to have a lot of restaurants in their portfolio. That means that a Greek restaurant in Salmon Arm is likely to have a similar, if not exactly the same, wine list as the Greek restaurant in Vernon. Worse still is that the Greek restaurant could have the same wines as the Italian restaurant and the American diner in the same town and even on the same street. This wine list homogeneity is particularly visible at big restaurant chains that have multiple locations throughout the province. Obviously the food at chains or franchises is going to be the same no matter where it is, but they are far more likely to have one single wine supplier and have better volume discounts on their wine purchases because of it. Larger wineries that are attached to corporations are going to have the economies of scale and will be able to offer even bigger bulk discounts, incentives, and services than smaller independent wineries.

Occasionally I have found some medium-sized estate wineries as house wines at restaurant lists but it’s fairly rare. Those are the restaurants with the best wine lists and I will always try to buy wine at those places. Sometimes wine lists that seem to be diverse are actually not. Seeing Inniskillin, Woodbridge, Monkey Bay, Hogue Cellars, Ruffino, and Mouton-Cadet on the same list seems like a pretty good selection and there is a lot of choice for sure. Except all of these wineries are owned or distributed by one company and it’s very unlikely that there will also be any independent estate wineries on the list.

That’s really where it’s at. A restaurant that makes their own wine list for itself (nobody knows their food better) has put a lot of effort into it and it will always show. Very likely, they will have also put that much effort into other areas of their business – the head chef and kitchen staff, kitchen appliances, staff training, quality ingredients, tableware, stemware, décor, etc – and that will all be far more visible than the wine list. It may not be the easier way but the result will very likely be a better overall dining experience. When I see an estate winery as the house wine on a list, I will always order a wine at that restaurant because I know that if they made the effort with wine, the food is probably worth it as well. If they haven’t made the effort, then all I can say is, “Yes, I will have fries with that.”

Cheers from wine country!

~Luke

End of the Run

20140214-125934.jpgAnd so it goes. Another season is winding down. Time to rest, or hibernate, over the winter until waking up renewed in the spring, ready for a new season. Just hoping I don’t have any big expenses during hibernation.

Oh, you thought I was talking about the grapes? Yeah, them too. You see here in the Okanagan, it’s the end of employment season, when most little worker bees like myself are out of work. In 7 years I’ve lived in the Okanagan, I have had 1 year of full-time employment over the winter and about 3 years of part-time (3/4 time -which I thought at the time was pretty good) employment. It’s the single biggest thing that makes it very difficult to stay here. When I tell people that my music career is really supporting my wine career, the truth is I’m not really kidding. Before moving to the Okanagan, I’d heard rumblings about the “Sunshine Tax” but I thought that they were kidding. They were not. People who live here choose to live here but not because of the money, that’s for sure. Or if they have money, they didn’t get it while they were living here.

When I travelled to Winnipeg last summer, I kept meeting many people my own age who were on vacation with their young families. Aside from the joy of being able to talk to people of a similar age (that doesn’t happen often in the Okanagan), what I got out of most of those conversations was that the Okanagan was not a place where one can easily make a living. It’s a constant struggle sometimes. That was behind the genesis of the Wine Country BC’s podcasts – something to do until another opportunity arises. That’s my theory as to why blogs are so popular right now. They are something for Gen-X’s to do until they can get to do what they really want when the Boomers retire. Unfortunately, the Boomers are retiring but their shoes are being filled with the Millenials that are younger and clearly a safer long-term investment. The question now is, can I really keep things afloat by staying in the Okanagan?

Only time will tell but as things are headed towards the jobless section again this year, I’m rethinking what it takes to make a living in the wine industry here. I love talking and writing about wine. I love helping people learn about it and sharing experiences about it. Hence the outlet for me that is this very blog / website that you are reading right now. However, I’m learning that just like starting a winery, blogging (or writing) is very much like a winery – you can’t really make at any money at it and the people that are able to start it up quickly are the ones who are already generally well off anyway. I’ve seen lots of bloggers come in for free tastings and schmoozing before heading off in their BMW. Blogging is obviously not a career that would pay for such a vehicle so is is it more of a hobby for them? Maybe a pastime?

Wine, fine wine in particular, is sometimes seen as a highbrow beverage that is only appreciated by the richer classes. Certainly there is an element of that but I would argue that that is also true of other items. It used to be cellphones were only for the rich (or perpetually busy) because they were the only ones who could afford them (or needed them). Perhaps in the future, cars with gasoline engines will be only for the well-heeled. That’s not really a stretch to predict that kind of change in our world, but it’s safe to say that there will always be some form of social stratification out there for anything, including wine.

Wine is quite simply food. It is an important food culturally, nutritionally, and socially. Civilization as we know it in the western world sprang from the grapes on the vines. There’s a reason why it’s mentioned in the Bible and other similarly ancient texts. Wine production pre-dates literacy. We drink wine with others to have funny stories to tell our kids. I believe that is, in essence, the meaning of wine in a nutshell. It’s really that simple.

Blogging and podcasting have always been something that have interested me and I will continue to do so even after making my millions. Regardless of what the future holds for me, as long as there is enough fascination with the world of wine and the desire to write about it or record it, I will be posting here from wine country. As long as I have wine to drink, I will no doubt have funny stories to tell.

Cheers!

~Luke

The Oral Traditions of Wine

Orality – That which characterizes speech; a culture characterized by the primacy of speech over other forms of signification. Usually opposed to literacy, orality refers to those aspects of a culture’s way of life that are attributable to its investment in the resources of spoken language. These may include formal ways of organizing thought (myth) or knowledge (magic); or they may be associated with rhetorical and other systems for fixing and transmitting sense.”

– from Key Concepts in Communications and Culture Studies by Tim O’Sullivan et al, 1994.

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Rhys Pender, MW, at Clos du Soleil’s first vertical tasting.

Working in wine sales, I have noticed that much of what I do revolves around talking. Lots of talking. When I leave work after going “Blah blah blah blah” all day, I relish the time on the motorcycle heading home, where talking out loud is utterly useless and I can take pleasure from just shutting up. All the wineries and stores where I’ve worked have lots of things to read (back labels, magazines, books, rack cards) but I’ve noticed that people don’t seem to pay attention to those as much. Even those eager customers who carry notebooks around for their tasting notes are few and far between. People seem to make purchasing decisions based on the experience of tasting the wines and on the stories and descriptions told to them by their friends or wine shop person behind the bar.

I’ve included stories from friends as an influence here because I don’t want to put too much emphasis on the influence of the wine shop person, who has a vested financial interest in making sure that the wine is appealing. That’s their (my) job. While it is unlikely that a person selling wine can ever make someone purchase a wine that has a taste that repulses them, it is possible that that person can enhance the tasting experience itself enough to make it more pleasurable than it might be otherwise. Ever get home from wine trip and and find that the wine doesn’t really taste like you remember in the wine shop? There could be a few factors at work there (bottle variance, travel shock, etc) but the presentation (the stories of the wines / sales pitch) are a part of that experience and therefore somewhat influential on the perception of the wine at that moment.

This has been my experience especially when asking people to try two wine styles about which they have huge preconceived notions and would otherwise refuse to taste – oaked chardonnays and rosés. These are two different styles of wine that have had huge backlash over the recent decades and there are still people who prejudge the modern examples based on past experiences. Oaked chards will always be “vanilla wine with some grapes added” and rosés will always be sweet “Mateus” or “White Zin” (depending on the person’s age). I’ve noticed that how I introduce these particular styles of wine has everything to with how they will be perceived. I happen to enjoy both of those types of wines and perhaps my enthusiasm for them is somehow infectious. Who knows how effective I would be at selling those wines were I not to be as fond of those styles?

Andrea Robinson, Master Sommelier, wine writer, and Andreawine.com

Andrea Robinson, Master Sommelier, wine writer, at the Wine Bloggers Conference 2010

Preferences and tastes are individual. Everyone behind the wine bar has had different experiences with wine and with the wines that they are talking about. Most of them at least like wine and a lot of them (in BC at least) are selling wine for a casual summer job because they are retired or are students. Others enjoy learning about everything that wine has to offer and are focused entirely on every aspect of it from start to finish. Regardless of where the person behind the bar is coming from, everyone has a unique perspective that they use to tell the “story” of the wine at the bar. Because these kinds of interactions are essentially verbal only, I believe that wine sales is an intensely oral tradition rather than a written tradition. I think a big part of wine culture itself is also oral in nature and that most people have experienced wine this way. How many books on wine do most people read? Terry Theise’s Reading Between the Wines has never made the Times best seller list at any point but I think every wine lover should read it. Most people will have more experience talking about wine than reading it. Just like the fish that was THAT BIG, the stories can get a little convoluted.

There’s a game that I used to play at summer camps called Telephone. We would all sit in a line or circle and the leader would whisper a phrase to the person at the head of the line, who would then turn around and whisper that to the next person. The message would get whispered from person to person all the way through the line until the last person who would say out loud what they heard. Without fail the original message of “Swimming in the lake is fun!” would mutate into “Weasels like to bake pies!” and everyone would laugh hysterically.

Just like that camp game, the message that people hear can sometimes get muddled. Oral communication is tricky that way, especially coming out of an age where oral communication has been relatively rare. Sure, we’ve all been talking the whole time but can we all listen with the attentiveness before technology (recordings) allowed us to hear things repeated back verbatim? But that’s an article for a whole other kind of blog…

Technology and social media is bringing back a kind of oral tradition (called Secondary orality by Walter Ong) which perhaps explains some of the appeal of platforms like Twitter and Facebook. On these platforms, ‘facts’ are debatably not the same as ‘facts’ that we would read in a newspaper article or peer-reviewed published work. (Of course, what constitutes a ‘fact’ is another argument altogether.)

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Roie Manoff behind the bar at Silkscarf Winery in Summerland.

People remember stories that they hear (such as from wine shop sales people) and think that they are ‘facts’. I saw a tweet the other day from someone who had had the ‘facts’ somewhat turned-around from the ‘facts’ as I think I know it. It was a photo of a bottle of Merlot and the tweet mentioned something about the Merlot coming from the oldest vines in the Okanagan. As it happens, I used to work at the winery where that particular Merlot came from and that particular bottle was definitely not from the oldest vines in the Okanagan. That winery made two Merlots and the tweet featured the lesser priced version of the two (which was blended from across unknown number of vineyards of any possible age).

The problem isn’t with the customer getting their facts straight. Perhaps they heard them talking about the other, more expensive Merlot and got them confused. But the less than truthful information could have mutated well before that, confused in the mind of the person who happened to be telling them the story – i.e. the wine shop person who sold them the wine. Wine shop people are told to tell “the story” of the wine, which comes from the viticulturist / wine maker to the wine shop sales personnel (through any number of communications or marketing managers). Just like in that camp game of telephone, ‘the story’ can be easily and inadvertently altered at the beginning with more changes happening over the course of the summer as the same story gets told over and over again by the same person.

There is also the issue of where that ‘story’ comes from. Was it from the wine maker? Winery owner? The communications manager? PR person? Director of Sales? Wine shop manager? They all have a reason to include or exclude certain facts for various reasons. Some wine makers are secretive while others are openly candid. Who’s version of the story will be ‘the story’? Will it really impact how the customer appreciates the wine?

From my experience, it absolutely will. Anyone who has had a bad experience in a wine shop or with a particular wine will not only have trouble trying that winery’s wines again but will also have their own story to tell. I explored that recently in a post about expectations in the wine shop wherein that oral storytelling tradition has been integrated into the megaphone of social media platforms. In that case, do the ‘facts’ really even matter all that much?

Perhaps all sales, not just in the wine shop, are part of a tradition of orality. I find it fascinating how this aspect of our human nature (humans have been an oral species far longer than a literate one) is present in a culture based around an age-old beverage like wine.

Cheers from wine country!
~Luke