Wine Markup in Dallas Restaurants: Alfonso Cevola’s Point of View

Wine markup in restaurants. It’s a hot national topic. How much is too much; how little is not enough. Corkage fees. Bring your own. Oh, where will the madness stop.

Today Alfonso Cevola, Italian Wine Director at Glazer’s, makes some interesting observations on his blog, On the Wine Trail in Italy.

Wine lists. Working with several clients over the last few weeks, and really finding some very different opinions. But more and more I am seeing restaurant people rethinking the way they serve wine in their places. Less popular is buying a wine for $17 and reselling it for $65. The wave I have been seeing, in Houston, in Dallas and Austin, is that same wine on a blackboard for $39. You know at $39 a party of four will buy two bottles. At $65 they might nurse that bottle of wine. So the establishment sells one bottle and had $48 in gross profit. Selling two bottle for $39 and they have $44 to work with. A smaller profit? Yes. A happier clientele? Most assuredly. And most likely to return sooner. This is a wave that is coming from San Francisco, from Southern California, New York, and Texas is right there, too, with these ideas. This is exciting stuff for the wine producers back in Italy who have a storeroom full of wine right now.

I’ve noticed lower wine prices in restaurants lately. I paid a little over $30 retail for a 2005 Arzuaga Crianza Ribera del Duero (Spain) and noticed it on the wine list (same vintage) at Maximo for $65.

11 comments on “Wine Markup in Dallas Restaurants: Alfonso Cevola’s Point of View

  1. What is really amazing about Maximo’s price is that:

    1) they are a club and cannot buy directly from Glazer’s (a wholesaler) so must pay anywhere from 10-30% more purchasing it from a retailer licenced to sell to a club (unlike their competition 1/2 mile north in wet Addison).

    2) Out of that $65 sales price, the restaurant is only getting $56, the State of Texas is getting $9. If they did not have a Mixed Beverage permit (which allows them to sell margaritas, martinis, etc), they would keep the entire $65 and be able to charge 8.25% sales tax on top of the $65 instead.

    In order to satisfy all the guests in a group’s personal tastes, we now offer over 40 wines by the glass on our (Sevy’s Grill) menu. That way everyone can enjoy their favorite flavors without having to purchase multiple bottles.

    Crazy, isn’t it.

  2. Plan C: Do BYOB with a $10 corkage. Much more profitable. No storage, no purchasing management, no market research, no spoilage, no shrinkage, focus on what you do best (food), more repeat customers.

  3. We’ve seen virtually every restaurant on our site completely overhaul their wine lists to make them more pocketbook friendly or, as Amy said, offer a lot more by the glass. The idea of lower price point + more volume = similar profit is a pretty basic premise that I’m glad has caught on (albeit by necessity in a lot of cases).

    I don’t think corkage fees are the answer. Worzel makes a good point but doesn’t factor in retaining great wait staff (which Sevy’s has). 2 bottles of $50 wine = a $20-ish tip. 2 bottles at $10 corkage = $4. Sure its good for the consumer but hurts the waiter who’s there to make a living and in turn hurts the restaurant when they lose a valuable piece of man power.

  4. When will Alfonso learn? I have had enough of this clown going on message boards complaining on how his clients are not conducting business how he wants them to. It is no business for an employee of a national wine distributor to post his views on how a client of theirs is to conduct their business. This post solidifies Glazers Wholesale as a two faced company. They sweet talk their customers (restaurants, stores) in to buying their product, and then stab them in the back when they do not buy enough because of Glazer’s view that the reason their wine is not moving is because markups are too high. I am not for or against this argument. However, my concern is that Alfonso Cevola needs to removed IMMEDIATELY from his post at Glazers’s as the Italian Wine Guy for making inappropriate comments about wine buyers in an attempt to defame their integrity by slandering their actions. He has no business to talk about his clients, whether right or wrong. Whole Foods’ chairman was ousted years back for making comments on message boards that were none of his business, and now we will see a local face suffer the same fate.

  5. A lot of people did their part this past weekend by purchasing Italian wine at a 20% discount at Jimmy’s. Fantastic deals were had.
    Amy – Thank you for your insight on how the restaurant biz works. The bottom line for many people is that we buy what we feel are nice wines, all for under $20 a bottle, many under $15, and stay home and cook up a restaurant quality meal. Maybe not as good as Sevy’s but still better than many area spots.
    And pairing menus should also be considered by more area restaurants. Went to Bijoux two weekends ago and had a wonderful meal. Five courses, each paired with a reasonable pour of wine. And well worth the $30 charge for wine, even though none of the wines served retailed for over $20.

  6. Sounds like a disgruntled employee above. Thanks Amy for always giving out good information. Worzel, I like your idea. Ahh, that would be sweet.

  7. Right on WineChick..or they are currently employed by one of the competitors, trying to stir the pot….

  8. Since when do moderators allow anonymous commentators to spew vitriol irresponsibly in comment threads?

    @Dumb AC don’t be such a coward and reveal your identity and more importantly wake up and smell the Viura and act like an adult: the blogosphere is for an open exchange of ideas and opinions and collegiality and common courtesy are required attributes for admission.

    Having address anonymous’s rudeness and puerile behavior, I have to note that I have been seeing the exact same thing as Alfonso: restaurateurs showing some restraint in pricing are thriving while the hubris of 300-400% mark up is driving many into the ground. I work on the broker side of things and believe wholeheartedly that – in the Obama spirit — we all need to make some sacrifices so that we all can get ahead.

    However you may see things, chapeau bas to D for fostering healthy dialog!

    Sincerely,

    Jeremy Parzen
    (http://dobianchi.wordpress.com)

  9. Dear DumbAC… Nice try, but on 2 major points you are entirely wrong.

    1) John MacKay was not ousted from Whole Foods. He is still in charge.

    2) The blog is entirely the personal blog of Alfonso Cevola and nowhere is his emplyer mentioned in that post or any others.

    You don’t like it, don’t read it. You don’t like Whole Foods and MacKay, shop at 7-11. And do some research before spouting uninformed nonsense, too.

  10. Alamo City Grille has the best prices I’ve found – Cain Concept 05 Cab and Jordan 05 Alexander Cab $69, Santa Margherita 07 Pinot Grigio $36, Sonoma Cutrer 07 Chard $34, Liberty School North Coast 06 Cab $27…..these prices have made me a regular, not to mention their great food as well!

  11. Dumb AC wrote:

    “Whole Foods’ chairman was ousted years back for making comments on message boards that were none of his business, and now we will see a local face suffer the same fate.”

    That is incorrect. He was censured for leaving ANONYMOUS comments in a forum. It was primarily the misrepresentation of himself as a consumer that drew the censure — not the content of his remarks.