Yesterday I had a good chat with the sommelier of a local restaurant called bluehour. We were chatting about making money with by the glass pouring and he had an interesting take on it. First some facts:
1) Usually restaurants get on average 5 pours per 750ml bottles.
2) Restaurants like to mark up wines up to 4 times (especially for by the glass vs by the bottle).
3) Restaurant buy wines wholesale, sometimes with a special “by the glass price”. Let’s assume that wholesale is about 30% less than retail.
Now here is the math that most restaurant do: Buy a $9.99 retail bottle of wine ($7 wholesale), mark it up at least 4 times ($7 X 4 = $28), pour 5 glasses out of it and sell them at $6 each. Profit would be: (5 X 6) – 7 = $23 per bottle. Not bad….
My Sommelier friend was arguing that it was crazy math because a) you really rip off the customer (the customer could almost buy a whole bottle at that price) and b) you do not maximize the take home per bottle for the restaurant. Here is his math: Buy a $30 retail bottle of wine ($21 wholesale), mark it up gently 2.5 times ($21 X 2.5 = $52.5), pour five glasses out of it and sell them at $11 each. Profit would be (5 X 11) – 21= $34 per bottle. 50% better than the previous calculation. Not only you got more money per bottle but you also offered a great wine to your customers at a more reasonnable cost (you definitely could not buy a bottle retail of that $30 wine at $11).
I think he has a point….