"Wine is the only artwork you can drink." - Luis Fernando Olaverri

Introduction:

It’s an open secret: Virtually everyone knows wine is marked up massively in most bars and restaurants.

It’s not uncommon to see a $20 bottle of wine at the liquor store. Then visit the same bottle of wine on a restaurant’s wine list for $60.

It’s one of the easiest ways to increase restaurant sales and bar profitability. And after you’ve gone through the trouble of getting a liquor license, you must learn how to increase profits from those licensed rights.

And that makes pricing your bottles of wine a light exercise. Because people know restaurant wine markup, they’re also suspicious of high prices.

There are a few things to consider when hammering out your wine bottle price strategy. You definitely need to consider profit. But you also need to think about what you can get away with.

This involves doing some studies and research about your concept and clientele. Then you’ll get a good idea of how to price a bottle of wine in your restaurant. The reason is that it will determine your flexibility when setting markups.

Concept:

The wine industry has an ambiance around it. Several people associate it with elegance, finesse, and culture. These associations are crucial in how much the average person is willing to pay for a bottle of wine. Wine even tastes better when it costs more. It’s clear, then: Many people experience wine from the perspective of their expectations. That’s why how you present the wine—and yourself matters. So think about your concept, the flexibility surrounding the pricing, and the feeling it gives you. You need to ask yourself some questions. Which include:

1. Do you spend enough time piloting your wine menu or digital wine list? Hunting for exciting vintages from unique vineyards that complement your food menu? Does your restaurant marketing plan include a lot of wine-focused promotions or a seasonal, limited-time offer?

2. Are your servers and bartenders expertly trained on the wine list and its food pairing options?

3. Have you invested in quality glassware, with specific glasses for different varieties?

4. Do you employ a wine expert or typically encourage staff to earn various levels of sommelier certification?

5. Do you expect servers and bartenders to learn and deliver full wine service? This includes how to decant wine or what does a wine aerator do?

If you spend enough time, energy, and money on your wine program, then you’re justified in marking up your wine bottle prices to show that exclusively. And you are charging commensurate corkage fees.

Casual concepts with customers that spend under $30 per person may have a tough time marking wine up over 300%. Casual restaurants should probably stay between 200–300% on their restaurant wine markup.

A casual concept may bring in more money with a wine-by-the-glass program.

But let’s say your concept is on the official brink. You’ve invested in your wine program, and people spend over $30 per person. Upscale ideas can get away with routinely marking their wine up in the 300–400% range. A destination restaurant can get away with marking their wine bottle prices more than a steakhouse. A steakhouse can mark up bottles higher than a trattoria; who can mark up more than a casual spot. If you’re delivering on your patron’s wine and wine service expectations, they’ll pay for it. There’s a fair bit of psychological pricing you can leverage when it comes to this.

CLIENT-BASE

Furthermore, consider how your clientele interacts with your business and how they flow. Look into how much they spend, when they visit, and what they order whenever they come around. This goes hand-in-hand with the concept, but it’s worth considering independently. If your customers spend $20 per person, they’re probably not excited about an expensive wine list. If they’re ordering sandwiches, they’re probably not looking for vino. But if they’re spending $50 individually or buying grilled meat, they’re likely in the market for a wine pairing. And all-ears on a wine sales pitch. It’s pretty simple because you already know these people. Put yourself in their shoes. Can they put $75 on bottles of wine?

COMPETITOR PRICING

The last thing to consider is how much competitors in your business area charge. Restaurant wine markup is based on the wine bottle cost: the price the bar pays the vendor for the bottle. Your competitor is probably not paying the same price as you. They may use a different vendor or have a beneficial relationship with that vendor. They could be ordering way more than you and getting a considerable discount. There are a lot of factors, so do not assume your competitors’ prices should be your prices. But; There is one helpful thing you can get from your competitors’ wine bottle price list. It’s how much people are willing to pay for a bottle of wine. You may not have an idea of the markup or the profit margin for each bottle of wine, but you’ll know what bottles are selling. How? By paying rapt attention to wines that are front-and-center on the wine list. Or the wines that have been on their wine list for a long time. Then you can avoid underpricing by knowing what people consider an acceptable price for certain bottles of wine. You should also try to match their bar promotions, like implementing happy hour ideas to prevent losing customers. Ensure that you know what happy hour and the best times.

THE TYPE OF WINE

People are always willing to pay more for a wine from a fashionable region. Or one that generally appears more luxurious or sophisticated. It’s just like a formal restaurant concept having a longer leash on markup percentage than a casual one. You may even charge more for unique types like gluten-free wine brands. Have wines with the right image. Ones that give you even more flexibility with your restaurant wine markups. For instance, red wines are more associated with quality and food pairing than whites. People will pay more for red wines. The same goes for wines from trendy appellations with high-end reputations: Tuscany, Bordeaux, Burgundy, etc. If it is sophisticated, people are willing to pay. Put this into consideration whenever you are determining the price of your wines.

PAIRING OPTIONS

You may have a fantastic and all-time fascinating concept, but is your menu designed with wine in mind? If it’s not, that’s fine. Wine is not inconsistent. It pairs well with many things. But some wine pairs excellently with specific dishes. If you put such consideration into your menu, wine pricing is another feather on your cap. You can push markup a little higher if you’re selling a pairing experience. That’s why a food and wine pairing menu is excellently profitable.

WINE-BY-GLASS PRICING

Another strategy for wine pricing can factor in how you’d price wine by the glass. You can price a bottle of wine just the same as its constituent glass—if they were sold separately. For instance, you have a wine for $10 a glass. There are roughly 5 glasses of wine in the most common wine bottle size: the 750ml wine bottle. This strategy would price your bottle at $50, then. Typically, bottles are a bit cheaper than the add-up of their glasses, but some restaurants do this successfully. Don’t immediately jump to the conclusion that people don’t are willing to buy your wine if it doesn’t sell well. And I don’t think that wines that sell well are optimally priced. Seasonality, cost of goods sold, and consumer trends will continuously change your demand, supply, and profit margin. Wine pricing is dynamic. On your first try, you won’t get optimal pricing for the most significant profit. You must try out different markup percentages, compare that to revenue, and calculate your gross profit. Only then can you be sure a price is worth sticking with. Pricing a menu can be complex. Flexible wine pricing is what the best wine lists do. And it starts with consistent data collection and analysis. They collect and analyze menu data and react to it. They adjust based on the cost of wine or to cover the lower margins provided by food. Food cost notoriously gulps the profits. They focus on menu engineering by leveraging popular products, capitalizing on trends, and reducing prices on slow-movers.

In conclusion

Building and executing strategies that work best for your business is the only thing that will fuel your growth. You may only see a positive shift when your goal is definitive, and a plan is on point. But this may take a lot of time and effort and can be a risk to save yourself time and set forth efficient strategies; our agency is here to help you render the best results.

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