Wine prices are rising at US restaurants
By the bottle or glass, vino is costing more when you dine out -- at both high-end bistros and family-style eateries.
Is it another tale of supply and demand, or is there more to the recent jump in wine prices at your local eatery?
A study by Restaurant Sciences, a Massachusetts firm that tracks food and beverage sales across North America, looked at average prices of wine sold at U.S. restaurants between October 2012 and this past March.
Sales of wine by the glass, bottle or carafe can be a substantial part of a restaurant's bottom line. And the Restaurant Sciences study, which sampled data from more than 5,000 U.S. establishments, found wine brought in more than $289 million during the six-month period in question. (That figure is just a portion of wine's impact on the overall restaurant industry, however. It excludes wine sales at bars, nightclubs, hotel bars and restaurants, fast-food joints or concession stands.)
What's interesting is how different restaurant sectors have been changing their prices -- and by how much.
The study reports that, on average, midprice, casual-dining restaurants raised the costs of their vino by a little less than 2%. High-end, "white tablecloth" establishments -- think Ruth's Chris Steak House (RUTH) -- posted an average 5.35% increase. But the biggest jump was found at affordable family dining venues, where the price of wine served climbed an average of nearly 8.4% in six months.
"We're seeing more and more wine lists with nothing under $40 for a bottle," Michael Whiteman, the president of Baum/Whiteman International Restaurant Consultants, told the Los Angeles Times. "And that's a bargain, considering what you'll pay for four wines by the glass."
Several major factors are raising the price of wine at restaurants. The global wine industry is, like a lot of businesses, recovering from the worst of the recession -- when it cut back on production and let go of workers skilled in grape growing and picking, and management. Global wine production dropped 6.1% last year to its lowest point in nearly four decades -- after weather conditions worldwide damaged grapes.
At the same time, wine has become more popular around the world as middle-class consumers in emerging economies develop a taste for the grape. In the U.S., consumption of table wines reached 749 million gallons last year, or about 2.73 gallons per U.S. resident of legal drinking age.
Chuck Ellis, the president of Restaurant Sciences, points to three reasons behind the uptick in wine prices at both the high and low ends of the restaurant industry. The cost of wholesale wine is rising, he says, but additionally, consumers are getting adventurous and trying different brands and varietal choices. And third, more restaurant operators are increasing prices overall.
"In retrospect, it is more remarkable that the big midprice casual dining segment has held the line so well in the face of these pressures," Ellis said in an email to MSN Money. "But this is the most competitive segment of the full-service restaurant industry, and right now, consumers are benefiting from that."
When wine reached $6 a glass I was done purchasing it out. There are really great bottles of wine for $10 and up. Barefoot makes a great Moscato! I used to purchase wine in Germany for 1 euro, in furniture stores! and they too were awesome! We are producing some great wines here in the US so don't be afraid to buy a cheap bottle when you see it for $6 or $7. Buy yourself some cheese and crackers and a bottle of wine and spend less than the price of two glasses out in a restaurant and you can enjoy the goodies for two nights!
well here's a simple solution: DRINK AT HOME!!!!!
I'm amazed by how fixated the average joe is on wine prices in restaurants. I rarely hear complaints about the price of food, beer, liquor, soda, or coffee; but when it comes to wine, watch out for the freak out! These other items have every bit the same mark-up as wine, but no one makes a peep. Why? Again, you don't know what you're talking about. Most people have no idea what it costs to operate a full service restaurant or just how low the profit margin is compared to other businesses. The average person simply sees a full dining room and assumes the restaurant is making money hand over fist. NOT TRUE! The busiest places you frequent are lucky to be clearing 5% when the smoke clears, and that mark is often chewed up with never ending maintenance costs. The restaurant business is not a money maker....rather it's like farming, a way of life.
So, back to wine. It's true that restaurant mark-up on wine is high, just like everything else on the menu. It's also true that one can purchase a $15 bottle in a retail store that a restaurant would charge $9/glass to serve. Lets examine the difference, shall we? Both establishments are paying about $10 for this bottle. Both businesses must purchase an annual sales license. Both business pay rent, and insurance, and so on. That's where the similarity ends however. The restaurant has the following additional costs that retail stores do not: 4-6 times the overall labor cost, glassware which must be washed in a machine that must be purchased and serviced, waste from any unsold wine left in the bottle, an inventory of several cases for glass pours compared to several bottles at a retail store, over-pours from less than stellar staff, and breakage of the previously mentioned glassware. Before you get your undies in a bundle the next time you complain about "retail vs. restaurant" while dining, you may want to consider these factors.
On a final note.....Dining out is a luxury, not a right. It's expensive and it should be. Comparing wine prices in restaurants to those at a retail store is a fools game for people who simply want everything to be cheaper. Being served and cooked for is not cheap and it never will be.....if you don't like it, stay home and cook for yourself while drinking a retail purchased bottle. It seems to me that most of you want the champagne service for the beer price, and that my friends, is just stupid.
I've seen wine prices at more per glass than the whole bottle costs. Which is ridiculous. Many of these restaurants think they need to have an extensive wine list when the average wine drinker can't recognize half of the labels. Keep the costs down! Have a few varieties that the regular wine drinker would enjoy and sell more!! The price of the wine does not always insure the quality or drinkability of the wine.
We have wine parties where everyone brings a bottle of wine that costs less than 10.00. We pair them with foods and try them all. Write down the ones we like for the future. That way we can try different wines without the huge price. And can find something affordable.
I do so enjoy a glass of wine with dinner but restaurants are going over the top with the prices and are discouraging patrons. Only those with big wallets and egos buy the expensive stuff for impression.
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