Last week we hinted that restaurants received far more advantageous treatment by the industry as a whole than retailers.   In fact we pretty much said it.  Now we do blame the purveyors for perpetuating this whole caste system. But we also know that the catalyst for all of this is the wineries themselves.   Somewhere back in time some winery owner ‘climbed the mountain’ and saw some sort of burning shrubbery that said to him, ‘you build brands through restaurants.’ Apparently he took a number of his friends up there too and ever since then the restaurant focus has become almost ‘commandment-like’ throughout all of wine country.

In the beginning, the belief was that people would go into a restaurant and order a bottle of wine off the wine list, have it with their fine meal, presumably in the perfect setting, maybe even with a little violin in the background, and they would be swept away by the experience and become followers of those wines.   Now let’s give the old timers the benefit of the doubt.  Back in the day, there weren’t too many ways a producer could get visibility for their wine.  The internet didn’t exist.  The wine press, such as it was in those days, was limited to maybe once-a-week articles in the newspaper, and very few retailers wrote newsletters.

The volume of data covered was also substantially less.  Word of mouth among the wine cognoscenti was one way to build a brand, but it took years and was pretty exclusive to the folks that moved in those small, ‘aristocratic’ circles.  It was a lot more difficult to make an impact and the ‘players’ from the winery standpoint were actual wineries.  In short there were few avenues outside of restaurants where a label might get some exposure.  But also, there were considerably fewer brands, both domestic and imported.  Back in the 70s there were a few dozen wineries, Napa was still pretty bucolic, and the Central Coast didn’t even really exist as a ‘wine region’ in any meaningful way.  So if your winery was one of a couple dozen on a restaurant list you might get a chance to make that ‘magic’ happen and your label to blossom.

Fast forward to today.  The industry still clings to the ‘restaurants-build-brands’ thing as if it were dogma in spite of all of the changes that have occurred in the past three decades.  Back in the day, as we said, there weren’t a lot of wine reviewers and most of them put out an article once a week on the local paper, usually on a handful of wines, often highlighting a single winery who bought them lunch at a nice restaurant.  That article had a short shelf life as the paper, in all of its ephemerality, was usually gone a day or two later.

In the second half of 2015, the Wine Advocate reviewed 14,677 wines just in their three regular editions, not counting addendums or any other special publications.  The Wine Spectator boasts 336,000 reviews on their website.  So the consumer doesn’t have to wait around to go to a restaurant to find info on a single wine.  There are multitudes of reviews available 24/7 on the web and winery websites to follow up on if something strikes your fancy.  In California anyway there are sponsored tastings under a variety of banners where people can taste and discover new wines.  They don’t have to go home and find the magazine with the review either.  They can look it up on their phone while they are at a sporting event, order it, and pick it up on the way home in some cases.

So the importance of that restaurant experience is certainly diminished vis-a-vis all of the other options that are available to today’s consumer.  Still, the wineries insist, it’s the experience that makes all of the difference and the fact that consumers see their wines at higher prices in fancy-pants places lends them prestige.  OK, let’s look at that.  First, let’s say you are in a restaurant, and they have a wine list.  The majority of restaurants don’t have a full-time sommelier.  We saw an ad for a ‘restaurant manager and sommelier’ at a pretty high profile San Francisco eatery.  If they are the restaurant manager, how much time to they have for ‘sommelier-ing’? Sometimes the ‘wine expert’ in a particular venue is the person that knows slightly more than the person who hired him.  He may have been a waiter last week.  If you are reading our stuff, you’re pretty into wine and you’ve probably had more experience than most of the people that purport themselves to be sommeliers.  So how likely are you to listen to this person’s suggestions, or even ask?

Let’s go to the list itself.  Let’s say the restaurant has a decent list.  Are you going to use that setting to experiment with a label or genre you don’t know?  At three to four times the regular price?  We hear wine reps complain all the time that many restaurants just sell the ‘same old stuff’.  What would the reps have them do?  It takes a fair bit of talent and drive to have a dynamic wine program.  If you’re ‘restaurant person’ and just hand a customer a wine list, can you really expect that they are going to step out of the box to discover something new at $70, $80, or $150 per bottle?

They aren’t very likely to buy something new in that kind of setting, with or without qualified help.  They might try something they read about or tasted someplace else, but is that really the restaurant’s doing?  And if there is no sommelier (or wine steward, or last week’s waiter) on hand, who is going to suggest that new wine to a prospective client?  Some guy in shorts, named David, who is your server tonight but is only doing it while he tries to break into T.V., music, or the movies?

Ah, but then the wineries play their trump card, the object of their deepest discounts (sometimes as much as 50% less than a big retailer or even a Costco would pay).  It’s by-the-glass pours, the answer to the question ‘how can we get our wine in front of the consumer for the lowest outlay while still maintaining our brand integrity?’  Now when we had wine tasting machines at the old location, there was a logic to selling an ounce of something new because people might try an ounce of something for a couple of bucks to see if they liked it.  They wouldn’t necessarily have ‘experimented’ with a full bottle.  The logic for wine-by-the- glass is the same, except that you are actually paying near or at the cost of the bottle for that glass!

Even that would be OK, and you could order a couple of glasses of something new from ‘David’, just to see what it is about.  Hopefully you are going to get a good representation of what that wine is supposed to be.  Hopefully the restaurant has a wine preservation system, goes through wine incredibly fast, and have it at the appropriate serving temperature.  Given the realities of the market, however, there is a better than 50-50 chance that, if you are trying something that isn’t a mainstream brand or genre, it has likely been sitting ungassed for a day or two and is sitting on the bar.  So ‘David’ is going to bring you a glass of oxidized wine, probably too warm (red) or too cold (white), for about five times what it is worth.  Not the best light to put your ‘brand’ in.

The greatest argument for by-the-glass works only in a perfect scenario of selection/storage/temperature/etc..  But the odds of all of those things all happening together are slim industry wide.  Such a system works with an intriguing mix of smart selections, fair prices and fresh bottles (or preservation systems).  But all of those things happening in concert at most places, while not quite unicorns, is pretty rare.  Are all restaurants like that?  Like what? Hey, there are some enlightened restaurant wine programs out there, just not that many as a percentage of all restaurants.  Yet all restaurants get special treatment by definition.  There’s a lot more to talk about with the wine lists themselves and we will get to that next time.

Even though we have made this same case countless times over the years to the wineries and purveyors, the industry doesn’t listen.  Our main gripe is that ‘David’s’ restaurant is getting a better price for selling you warm, oxidized wine at a higher markup than we get to sell you that same bottle, though the counter-argument is that the restaurant is ‘protecting the brand’ by charging those high markups.  To us we see this is disrespectful to the retail wine customer that supports the lion’s share of the industry.  We ask purveyors all the time why restaurants that buy less and are not always prompt with payments get better service and better prices than we do.  Most of the time we just get a shrug and a ‘that’s just the way it is’.

The wine business is glacial in its changing.  Even though we tossed out tons of arguments countering those burning bush guys of the 70s, that it all starts with restaurants, the same mantra still widely exists.  Even allowing that it may have been true once (though we can argue that point, too), the world has changed a lot and that brand of thinking no longer holds up with all of the information available to people today.  One purveyor, however, gave us a different spin.  He said, “There are a lot more restaurants than good retailers.”  That we couldn’t argue.