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Wine Bottle Prices: How to Price a Bottle of Wine in a Restaurant

December 19, 2019
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Scott
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It’s an open secret. Everyone knows wine is marked up massively in bars and restaurants. It’s common to see a $20 bottle of wine at the liquor store. Then see that same bottle of wine on a restaurant’s wine list for $60. It’s one of the easiest ways to increase your bar’s profit.

And that makes pricing your bottles of wine a delicate exercise. Because people are aware of restaurant wine markup, they’re suspicious of high prices. And rightfully so. Who wants to pay 400% more for something? But, the fact that we’re even having this conversation means they’re willing to pay 200% or 300% more.

How do you decide on the best wine bottle price for your wine price list?

           
  1. First, do a little soul searching. What kind of restaurant or bar you are will tell you how to price your wines.
  2. Then, determine which bottles on your wine list get which markup.
  3. And finally, be flexible and commit to dynamic pricing.

What’s the Right Wine Bottle Price for Your Bar?

Make some observations about your concept and clientele. You’ll get a good idea of how to price a bottle of wine in a restaurant. That’s because it will determine the flexibility you have when setting your markups.

What Kind of Concept Are You?

Wine has an aura around it—and the wine industry is a growing one. People associate it with elegance, finesse, and culture. That may not be what wine means to you. But those associations play a part 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 that many people experience wine through the prism of their own expectations.

That’s why a destination restaurant can get away with marking up their wine bottle prices higher than a steakhouse. A steakhouse can mark up bottles higher than a trattoria, who can, in turn, mark up more than a fast-casual spot.

If you’re delivering on the public’s expectations of wine and wine service, they’ll pay for it. So think about your concept and the pricing flexibility it gives you.

Are You Committed to Wine?

Some bars are sufficiently focused on wine and all of its associated commitments to charge a premium for it. Ask yourself these questions:

           
  • Do you spend a lot of time curating your wine list, hunting interesting vintages from unique vineyards that complement your food menu?
  • Are your servers and bartenders thoroughly trained on the wine list and its food pairing options?
  • Do you expect servers and bartenders to learn and perform full wine service, including how to decant wine or what does a wine aerator do? (Here's a breakdown of wine aerators vs decanters if you're in the market).
  • Have you invested in quality glassware, with specific glasses for different varietals?
  • Do you employ a wine expert or encourage staff to earn various levels of sommelier certification?

If you spend time, energy, and money on your wine program, then you’re justified in marking up your wine bottle prices to reflect that (and charging commensurate corkage fees).

How Does Your Clientele Behave?

Next, think about how your clientele interacts with your business. Namely, how much they spend and when they visit.

If your customers are spending $20 per person, they’re probably not excited for an expensive wine list. Alternately, if they’re spending $50 per person, they’re likely in the market for a wine pairing, and all-ears on a wine sales pitch.

Set Your Wine Bottle Price by Determining Your Markup Percentage

What is the Average Markup on a Bottle of Wine?

Bars and restaurants mark up wine bottle prices 200% to 400% above wine bottle cost, or what they pay for them.

Where your bar or restaurant falls in that range depends on your answers to the self-discovery questions in the first section. It also depends on the type of wine you sell, and what your competitors are charging.

Concept and Clientele

Casual concepts with customers that spend under $30 per person may have a tough time marking wine up over 300%. Stay between 200–300% on your markup and you won’t risk wine lists closing and eyes rolling at your ambitious prices. A casual concept may have better luck with a wine by the glass program.

But let's say your concept is on the formal side, you’ve invested in your wine program, and people are spending over $30 per person. You can get away with marking your wine up in the 300–400% range.

Type of Wine

If a wine comes from a fashionable region or generally appears more luxurious or sophisticated, people will pay more for it. It’s just like a formal restaurant concept having a longer leash on markup percentage than a casual one. Having wines with the right image and delivering on customer expectations gives you even more flexibility with your restaurant wine markups.

For example, red wines are more associated with quality and food pairing than whites. People will pay more for reds. The same goes for wines from trendy appellations with high-end reputations: Tuscany, Bordeaux, Burgundy, etc. If it feels upscale, people are willing to pay.

Consider this the next time you’re determining the price of your new Super Tuscan.

Competitor Pricing

The last thing to consider is how much competitors in your area charge. Restaurant wine markup is based on the wine bottle cost: the price the bar pays to the vendor for the bottle of wine. Your competitor is probably not paying the same thing as you. They could be using a different vendor or have an advantageous relationship with that vendor. They could be ordering way more than you and getting a bulk discount. There are a lot of factors, so don’t assume your competitors’ prices should be your prices.

But.

There is one useful thing you can glean from your competitors’ wine bottle price list. It’s how much people are willing to pay for a bottle of wine. You may not know the markup or the profit margin for each bottle of wine, but you’ll know what bottles are selling.

How? By paying attention to wines that are front-and-center on the wine list. Or the wines that have been on their wine list for a while. Then you’ll avoid underpricing by knowing what people consider an acceptable price for certain bottles of wine.

Embrace Dynamic Pricing

No menu—for food, drink, or anything else—is going to be perfectly priced. There are too many variables involved with how to price a bottle of wine in a restaurant for a one-size-fits-all solution. Seasonality, cost of goods, and consumer trends will always change your supply, demand, and profit margin.

Optimal wine list pricing is flexible wine list pricing, then. The bars and restaurants making the most money are the most agile ones. They collect and analyze menu data and react to it. They focus on menu engineering by leaning into popular products, capitalizing on trends, and reducing prices on slow-movers.

And that’s exactly what BinWise Pro helps beverage programs do. As a beverage inventory management solution, BinWise tracks everything you sell—and at what price. Having this perpetual inventory shows you exactly how alcohol pricing impacts alcohol sales. And that’s just one way BinWise helps bars boost profitability.

Book a demo and we’ll walk you through exactly how BinWise will help you spend less time to make more money.