Beer and liquor. These are the products that typically generate the largest volume of sales in most bars. As a result, many bars focus their efforts on building these facets of their business. However, it would be a mistake to neglect your wine sales entirely. When done properly, a wines by the glass program can be a profitable revenue stream for your bar.
As much as it may seem blasphemous to say this, there are some people out there who simply don’t like beer (the horror!). If you want these people to patronize your bar, you’ll need to offer them some other options that they like. While many of these people will choose a tasty liquor drink from your menu, the fact remains that some people just prefer wine.
The best indication of how much wine you’ll sell next month is how much wine you sold this month. By assessing your current volume of wine sales, you can use this information to make smart decisions regarding the number and selection of wines you offer.
In addition, as you redesign your wine program over time, you’ll be able to more effectively see the impact of your efforts if you have a stronger grasp on your current wine sales volume.
You’ll need to assess the following aspects of your current wine sales:
On the other hand, if you sell 70 glasses of your house cabernet every week, you may want to consider adding a second cabernet option at a slightly higher price point. Since you have such a high volume of cabernet sales, you can potentially upsell some of these customers to the higher priced option, increasing your profit margin on these glasses.
2. Determine the length of your wine season – For most bars, rotating your wine list every 6 months is sufficient, but if you’re a high end bar, you may want to consider rotating your wine list every 3 months. Regardless of the length of your season, you should avoid changing out wines in the middle of your season unless it’s truly necessary.
3. Price points – You’ll need to decide how many wines you’ll carry in each price point. In most instances, carrying 1-2 low priced options and 1-2 mid-priced options each for red and white wine will be ideal. You only want to offer high price point options if your wine sales justify having these options on your menu.
Once you reach this point in the process, you should be able to make a reasonable estimate as to how much of each wine you’re going to sell. It’s important to know your expected sales volume for each wine so that you can negotiate better deals on cases with your wine distributors. Be realistic in these estimates. Otherwise, you’ll end up with more wine than you need.
To calculate these expected sales volumes:
Once you’ve completed this planning, you need to do some research into the wines that you’re going to offer. It’s crucial that you do a thorough job in the first 3 steps of this process so that you can create a very specific plan to present to your wine distributors. That way, you’ll dictate the conversation and won’t fall into the trap of letting your distributors try and sell you on extra varieties that you don’t need.
Speak to your wine distributors on the phone first to explain your plan for the wines by the glass program you’re creating. Ask them to come to your bar and bring some wines for you to evaluate. Be very specific with your wine distributors regarding the types and price points of the wines you want them to show you. This will help them to pitch you the right wines for your program.
When your wine distributors visit your bar with options for you to consider:
Scope discounts – Sometimes, you’ll get a better price on the wines you purchase from a particular distributor if you order at least 4 or more wines from them.
At this point, you’re ready to determine which selections of wines to carry and which distributors to purchase them from. Whenever you negotiate special deals with a distributor, make sure the terms of these deals are put in writing.
Often, you should be able to get these deals without having to purchase every case up-front. If you’re going to get a deal on 20 cases over a 6 month period and you want to purchase them monthly so that you don’t overrun your storeroom, make sure that this arrangement is guaranteed in writing. This will prevent the distributor from trying to increase the price half way through your season.
In general, you want to keep your wine program consistent for the entire season. That being said, don’t be afraid to make any adjustments that are necessary as you evaluate the success of your program. However, always let the program run for a while before making any changes.
One potential adjustment you may need to make is replacing an out of stock wine. If the cabernet you’re carrying is no longer available from the distributor, simply replace it with something comparable.
The other adjustments that should be made involve selections that don’t sell well. However, it’s generally best to wait until the end of your season to replace the poorly selling wine since maintaining a consistent menu is crucial to the success of your wine program.
At this point, you’re in a strong position to build a thriving wine program. All the information you gather during your current season will help you when you evaluate options for your next season.
If wine reps try to pitch you on new products in the middle of your season, explain that you have a program set in place for the next few months and that they should come back when you’re ready to evaluate wines for your next season. This will help you dictate your buying schedule, and it’ll reduce the number of meetings you need to have with wine distributors.
To schedule a free consultation regarding your wine program or to find out how we can streamline your inventory processes and help you maximize profits, please contact Bar-i today. We serve clients nationwide from our offices in Denver, Colorado.
