Wine Up: Increased Profit Margins with a Sommelier-Driven Professional Wine Program

June 26, 2017

From business lunches and informal evening get-togethers to elegant multi-course dinners, restaurant owners and managers have long known that wine sales are prodigious profit centers. Every glass poured metaphorically mints money. It’s called “mark up,” the bottom line’s friend.

However, many restaurant patrons are inexperienced in navigating complex wine menus, especially if they list numerous vintages from varied wineries and regions. This unease can lead to decreased sales in both terms of volume sold as well as guests favoring more commonplace, lower price inventory. Enter the sommelier to save the day.

By providing extensive knowledge and a “helping hand” in selecting wines paired to specific dishes and courses, sommeliers can encourage guests to increase their orders, especially in terms of higher ticket bottles with more favorable profit margins. According to a research study by respected wine expert Christy Canterbury, Master of Wine, “sommelier presence is one of the most important positive correlations for increasing wine check average.” And beyond sommeliers themselves, having a well-trained staff can also led to increased sales. “Staff wine training is another of the most important positive correlations for increasing wine check average,” adds Canterbury. This second aspect is significant, as it signals that a sommelier does not have to be physically present to leverage wine knowledge in day-to-day, night-to-night operations. It’s the education that is key.

The reason why wine sales are so important to growing revenue and profitability goes beyond the everyday math of “sell more items, make more money.” Wine, in fact, can be essential in successful restaurant programs. According to John Laloganes, an Assistant Professor of Hospitality Management at Kendall College (and a sommelier), “food drives people but beverages keep you in business: Beverages make up 20-40 percent of a restaurant’s revenue because of their large profit margin and the low labor costs compared to food preparation.” Profits offered by wine far outpace margins gained from food service alone. “The industry standard mark-up for wine is 300-400 percent and restaurants rely on this to offset fluctuating costs of food, labor, venue and utilities,” Laloganes continues. Having a sommelier’s knowledge base at your staff’s fingertips can make all the difference when it comes to increasing profits.

Even better, the same model applies to premium craft beers and the skills of a certified cicerone. Beer sales can make profit margins effervesce with increased guest checks.

Sources: Christine Canterbury