Restaurants turn to wine for financial relief and a fresh business model.
Beverage programs have long served as an integral part of full-service restaurant sales thanks to their healthy profit margins. Yet as operators grappled with dining room closures during the COVID-19 pandemic, many found it difficult to convert their menus to off-premises models. For restaurants that have reopened, they still have to contend with shrinking sales volume due to declines in foot traffic and limited seating capacities.
Despite these challenges, restaurants with a robust wine selection have found that such offerings provided some much-needed financial relief. Selling from an existing collection not only bolsters sales, but it also encourages restaurants to rethink their beverage programs and adjust in a way that serves customers who are still staying home.
While strategies differ, many restaurants have found that auctioning some of the finest bottles in their collections or selling them at below-market prices provides a quick cash injection. In Los Gatos, California, three-star Michelin restaurant Manresa was able to raise $40,000 to pay staff salaries from one week of rare wine sales alone (half of which came from a single wealthy patron wishing to grow his private collection).
Other restaurants across the nation are seeing similar success from this strategy. In Brooklyn, New York, Italian spot Fausto held a cellar sale, and the socially distanced line to get into the restaurant wrapped around the block.
Meanwhile, some restaurants have turned to less conventional methods to boost sales. Spruce, a Michelin-starred San Francisco restaurant, converted its dining room into a wine shop just nine days after the city rolled out one of the country’s first shelter-in-place orders.
“I sketched the idea out on the back of a napkin, showed it my sommeliers on a Tuesday, and we were selling wine on Thursday,” says Andrew Green, wine and spirits director at Spruce. “We continued to improve the displays each night after we closed for business for the first four to six weeks.”
The restaurant began by stocking only 100 cases of wine daily but has since pivoted to fully stocked displays, which feature changing selections of wine each day. While Spruce now offers food and wine through DoorDash, Green says most of the sales have come from guests who pick up or place orders in person, which allows the team to engage with those guests and curate selections for them. So far, responses have been positive, as Green says guests have been grateful for a “safe place to shop for high-quality wine with good pricing.”
But even as San Francisco slowly ventured into reopening measures, questions remained about what Spruce’s model would look like in the future. Green says how long Spruce continues operating as a wine shop will depend on how long the pandemic lasts.
“We have not made a formal decision to change our business model, and, ultimately, I was tasked with selling a set amount of inventory to bolster the balance sheets of our restaurants,” Green says. “I chose this path because all other paths would have resulted in us selling a lot of our wine for less than we paid for it, à la a fire sale.”
Though this situation is relatable for much of the industry, the pandemic has had far-reaching effects, even beyond typical in-house sales. Many wine-centric industry events have been postponed or canceled due to restrictions on travel and gatherings. While chef Charlie Palmer says his restaurants have been able to continue selling wine and cocktails through takeout channels, he was not able to hold his annual Pigs & Pinot weekend event in Healdsburg, California, this year.
Typically, Palmer and a group of renowned chefs and winemakers would gather with guests to celebrate wine and heritage pork pairings and generate interest to support the featured wineries. Additionally, proceeds from the event would be donated to charity. In the time of COVID-19, however, Palmer and his guests had to get creative. This year, they moved the event online, where Palmer features a rotating list of chefs and winemakers in a weekly tutorial series.
“The idea came out of the disappointment of not being able to have the event,” Palmer says. “The tutorial series is an opportunity to show what happens at Pigs & Pinot. We bring the food and wine right into people’s homes.”
Not only have the tutorials boosted sales at the featured wineries, but they have also helped garner charitable support for hourly restaurant workers during the COVID-19 crisis. In fact, the online events have been so well-received by fans that Palmer says they will become an ongoing and permanent fixture. Growing out of that success, Palmer has even launched a new online series called “American Artisan” to showcase products by some of his favorite makers of wine and other goods across the industry.
“We’ll give [viewers] a peek at some of the best products and destinations to put on your wish list when we can safely travel again,” Palmer says. “The goal of each episode of ‘American Artisan’ is to educate people in a casual way about wine country. Every week, [viewers] are going to learn something they didn’t know—guaranteed.”
Yet Palmer isn’t the only enterprising oenophile braving the virtual world. Manhattan wine bar La Compagnie des Vins Surnaturels started an online wine bootcamp. For the program, employees deliver three packs of wine to guests who then join an hour-long Zoom tutorial with a sommelier. Through this experience, they not only taste the bar’s selections, but also learn about them at home, similar to how they might by interacting with wine experts in-store.
While the industry still faces budgetary and operational challenges even as states allow some measure of reopening, beverage programs are helping restaurants close some of the gaps. It’s unclear what strategies will look like in the future, but it’s almost certain that wine will continue to play a larger role in strengthening restaurants, even beyond the days of COVID-19.