By Larry and Adam Mogelonsky
If you’ve spoken to us before or we’ve broken bread together, then you know that the two of us are wine nuts. Not only does the beverage never cease to amaze in its production and regional variations, but we write about it for hotels because we see it as a great way for any restaurant to boost revenues.
This running column has been all about wine, but alas this age-old alcohol is only a subset of the overall F&B program for any hotel property.
After all, a wine strategy is part of a bigger picture – the F&B program – and it must serve the role of generating profit. As well, wine, like all things sold, must serve the less quantifiable goal of heightening guest satisfaction – both customers to a dining outlet and as a reason to stay at or return to the hotel. It makes little sense to build an extensive wine selection – or for that matter contemplate any wine purchase – without first consulting the restaurant manager, the F&B director and, in some cases, the GM. Altogether, a solid plan must define the parameters for how these beverages are positioned within the property, ensuring consistency with the overall brand approach.
As the craziness of the travel recovery summer comes to a close, perhaps it’s time to rethink your wine strategy for the autumn and for profit-generating results well in 2023. Here are nine broad territories to consider for the development of a lucrative plan.
1. Target audience. The wine selection must be tailored to the hotel guest or locals depending on what markets the brand is hoping to inroads with. Often, though, the interests of those seeking leisure accommodations, event planners and other restaurant-only patrons do not align.
2. Catering. Per the previous hint of group guests, it’s not uncommon to have two different wine lists. One is built for by-the-glass and prestigious bottle sales with reasonable markups while the other is designed for the tonnage of weddings, reunions and corporate retreats. Different needs call for different arrangements with suppliers. As well, note that events are often booked many months in advance, so you need to be able to present wines that can be finalized 30 days out.
3. Theme. As the vast majority of customers choose based on type of cuisine first, the wine must be congruent with the food the restaurant offers and not the other way around. Theme is not just about expectation management – for instance, people expecting a good glass of chianti at a low-key Italian joint – but about maximizing the experience and making memories. Beyond matching to the country, a fish restaurant will typically have more whites versus a steakhouse more reds, and then you must consider wine styles and grape varietals.
4. Local influences. Hotels must show deference to the community, both for support and to help build a unique experience. Are there any wineries nearby and, significantly, are any of them worthy of more than a token local inclusion?
5. Pricing. You start with costs then broadly define a markup coefficient. From there you examine prices based on past sales and market psychology for variable markups. There should also be a standard process for regular reassessments to maximize sales versus profit per bottle. As it concerns premium selections, would you consider adding a limited quantity of high-priced bottles onto the list for special occasions like champagne celebrations?
6. Private labels. Would you consider stocking a house red and house white? If so, what’s your price point and can you achieve a three-times markup? What are your cashflow requirements to guide order quantities?
7. Inventory. Storage costs and available space are important considerations as are revenue forecasts and turnover. Establish an appropriate dollar value for the total wine inventory along with a complete analysis of the number of labels housed. Part of this element is also the availability of supply in terms of working with reliable suppliers or wine merchants. Understand their terms and conditions, minimum order quantities and reordering speeds.
8. Wine list presentation. What’s the menu design? How many by-the-glass options are you including? How do you print your wine list and how easy is it to update? For example, guests don’t like it when the stated vintage year is 2018 and the server appears with a 2019 bottle.
9. Cashflow. It’s often said that the success of every business hinges on this and the same is true for any alcohol where there’s an upfront cost. Wine merchants are typically cash on delivery and you may need to purchase many more cases of wine in order to take advantage of better pricing or vintage availability. The rub is that these outflows don’t usually coincide with peak hotel occupancy or other periods of high restaurant volume.
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Editor’s note: To discuss business challenges or speaking engagements please contact Larry or Adam directly.