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.

By Bruce Kennedy May 7, 2013 7:17AM

Wine (copyright Carlos Davila, Photographer)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."


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52Comments
May 7, 2013 10:28AM
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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! 

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The funny thing, is, that you can buy that same bottle of wine, for 10 to 15 dollars, at a decent package store!
May 7, 2013 10:33AM
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Well, everything keeps going up except our salaries...so today it's wine , tomorrow it's milk or gas...this is nothing new.  At least this is an item you can do without (although disappointing)...milk & gas are necessities.
May 7, 2013 10:20AM
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If you are dumb enough to fall for the ripoff wine scams then the restaurant deserves your fools money. Years ago there was a rule that the restaurant should not charge more than double their cost of a bottle. Now these greedyazzed shysters have no limits. These scamsters  have had NONE of my hard earned money for wine the past ten years.
May 7, 2013 10:09AM
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Whiskey. It is often half the price, as is beer.
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well here's a simple solution: DRINK AT HOME!!!!!

May 7, 2013 11:31AM
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This is a total scam by either the restaurants and/or the wine industry. Wine crops have been at their highest peaks and quality for going on the last 5 years or so in California. There is no shortage of quality grapes. The industry is trying to make up for the slow sales during the recession or its just plain greed. My advise is don't buy wine at all at a restaurant (or bring in your own bottle) and only buy wine that is discounted at retail shops.
May 7, 2013 12:07PM
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I NEVER buy wine at a restaurant. Compare prices sometime and you'll see the bottle they charge $60 for is really $19 in the store.
May 7, 2013 11:12AM
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If Bruce Kennedy thinks wine is still good value in restaurants  he must be a member of the 1%
May 7, 2013 10:49AM
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Better yet... Do like I do and make your own wine. After your initial startup costs wine ca be made quite cheaply and from pretty much any fruit you can think of. I have mad sweet cherry, plum, white peach, yellow peach and blueberry and all have turned out most excellently!
May 7, 2013 1:46PM
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I've worked in restaurants for the past 20 years, both mid-range casual and ultra high end fine dining.  I'm a wine buyer, server, manager, host, and bartender and I believe I know the business side of the restaurant business as well as anyone.  In all that time, the conversation that cracks me up the most is the discussion of wine prices.  Most of the comments in this thread demonstrate what I've thought for quite a while.....y'all don't know what you're talking about.

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.

May 7, 2013 1:38PM
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To those of you who complain about the cost of a glass of wine: Do you have any clue how much it costs to run any business, let alone a restaurant? Do you realize that restaurant owners MAYBE make a 3-5% profit on sales? That means a whopping 18 to 30 cents a glass on a $6 glass. Hardly greedy. You need to realize how much it costs for the overhead required (let alone all the government taxes) to even open the doors every day. The vast majority of the cost of the glass of wine goes to employees, rent, utilities, taxes, loan payments and only pennies on the dollar ever make it to the owners pocket, if at all. Our first restaurant didn't make money for the first two years. Please take some time to understand why businesses charge what they do for their product or service.

May 7, 2013 11:59AM
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It is more like what is not rising (which would be your paycheck) than what is......taxes, food,gas,cost of living etc...etc...
May 7, 2013 1:00PM
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To those of you complaining:  Why do you go out to eat at all?  Your meal would also cost 90% less if you made it at home.  I will happily spend $8 or $10 on a glass of wine to go with my $15 meal because I enjoy being out and having a nice experience with friends or family.  And, no, I am not part of the 1%; I'm just someone that likes to treat myself to a nice meal once in a while.  The whole point of a restaurant is to make a profit so if you honestly think you are going to go out and get some huge bargain then you really don't understand how the business world works.    
May 7, 2013 11:33AM
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Prices are rising everywhere. Except in Obama and Bernanke land. The government (the FED) says there is practically no inflation. God Bless their lying, cheating, stealing, two-timing, cold-hearted, mean-spirited, home-wrecking, loser hearts.
May 7, 2013 12:30PM
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Totally agree that buying wine out is way overpriced.  Ballparks charge 9.25 for a beer now but people still buy them.  Restaurants have seen there liquor license fees increase,same as stadiums have. Most people won't pay more for food but will look past the beverage prices.  Pretty sure the state and local governments know this.  Can you say hidden tax on the consumer?
May 7, 2013 12:28PM
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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.

Nov 21, 2013 6:02PM
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Simply don't buy wine. I checked prices in the UK and other places in Europe, their prices are still reasonable. In the U.S. even the grocery store charges 3 x the norm. I won't buy it, period. Perhaps if enough people do this they will get the message.
May 19, 2013 2:00AM
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An overview of the best wines from U.S. and their value, can be obtained on http://www.wine-stocks.com/vineyards/region/index/t/ae6fbe35/item/US-California , $ 6 for a glass of wine appears cheap. Wines, traded on the wines auctions, often achieved crazy prices, it seems - soon - good wine will be avaiable only for the rich.
May 7, 2013 1:48PM
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I saw on tv, a book that says you can get rid of wasps with wine, and it seems to me that every time sells increase on an item , prices go up, it could be that a lot more people that don't even drink wine may be buying to get rid of wasps so the price is going up. of course if anyone is like me, they will stop paying higher prices for the stuff and just call an ecterminator.
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