Selecting and pricing wines to maximize profit

Alcohol sales can increase revenues by about 20% for small restaurant establishments. How do you decide what wines to serve and how much to charge?

At fine dining restaurants, serving wine is an art form. Patrons want a diverse selection of premium wines from around the globe. The meal is about the entire dining experience with wine being the celebrity entertainment.

On the other hand, at casual and moderately-priced eateries, wine is more or less “just” a beverage, so investing in a stock of premium wines may not provide a good ROI. Although there are higher profit margins in more expensive wines, you are likely to sell greater volume with less expensive and fewer wine options. Industry standard markup for wines is 200-300% of retail sales price. Patrons who enjoy wine (or beer) with a meal may appreciate the affordable options enough to regularly return to your establishment. Although counterintuitive, the lower cost product can bring in more revenue in the long run.

For a modest variety, chose both a sweet and a dry red and white wine. You may also wish to include at least one rosé or other “pink” option that is popular in your area. Standard red options include Cabernet, Merlot, Syrah, Pinot Noir, and table blends. Standard white options include Chardonnay, Pinot Grigio and Riesling. Talk to your distributor to see what sells the most in your area. Opt for brands you can sell at $3-$8 per glass.