UNCORK THE POSSIBILITIES
Ways to Invigorate Your Wine Program for the Coming Year
By Frank Paredes
The wine world seems to be inundated with bad news these days. There is decline in consumption driven by consumers drinking less, lifestyle changes, price increases, and President Trump’s imposition of tariffs driving up the cost of imported wine. Increasing distributor consolidation is making entry into the market progressively more difficult for new wine producers. Wine importers and distributors are awash in excess inventory of wine. In the last 12 months, roughly 90% of the volume of wine sold is from the United States (70%), Italy (10%), and New Zealand (10%). On-premise sales for still and sparkling wine represent 20% of all wine sales. In the same period, wine consumption in restaurants, hotels, and bars declined by -2% compared to the same period last year. Retail declined by -5%.[1]
THE PREMIUMIZATION OF THE WINE LIST
American restaurateurs are finding ways to reinvigorate their wine programs to enhance their diners’ experience. They are making more curated selections focused on smaller production luxury wines, domestic and imported. Consumers may be drinking less, but they are selecting higher-quality wines. Authenticity over conformity is becoming a driving force in buyers’ decision-making. This is coming at the expense of the large production mass market wines. Many restaurateurs are still offering a handful of “safe wines”: well-recognized brand names, to appeal to brand-loyal customers. Wine lists are being built to increase turnover and drive profitability, with more premium wines driving the change.
SMALLER WINE LISTS PLAY A LARGER ROLE
The days of the biblical-sized wine list may be limited to establishments that have been operating for a long time, especially in regions with a strong wine tradition, often building up extensive, historic wine cellars. As restaurateurs deal with the pains of increased rent, inflation driving up the cost of goods, the challenges of hiring and maintaining staff. They need to be smarter with their operating capital. This is leading to smaller wine lists that are often tailored to their menu. Restaurants are taking the time to better train their staff on these smaller lists and as a result the customer
NEIGHBORHOOD RESTAURANTS TIME TO SHINE
Tony Morello, Director of On-Premise Sales, M.S. Walker, sees the independently owned neighborhood restaurants taking a larger share of the consumer’s dining budget. The neighborhood restaurant offers the customer a more intimate and personal connection with the staff and, very often, the owners who are there every day to greet their clients. Morello pointed out that a handful of these restaurants have adopted a “sliding scale” markup that offers luxury still and sparkling wines at or below retail pricing to enhance the dining experience and encourage experimentation. This sliding scale is far below the normal restaurant markup. The traditional rule of thumb for restaurant wine mark-ups is four times the bottle cost. These offerings allow the restaurant to net a tidy profit from the sale.
THE WINE STYLES GAINING FAVOR
As restaurateurs look to enhance their clients’ dining experience, they look beyond the standard offerings of Chardonnay and Cabernet Sauvignon. Here are some of the wine styles gaining favor across the United States. Crisp and aromatic white wines like Vinho Verde, Sancerre, Pinot Grigio, and Alvarinho/Albariño are growing in popularity because they are lower in alcohol, refreshing, and pair well with lighter meals. Organic and sustainable wines are driven by environmental concerns and wines made using organic and sustainable practices are increasingly in demand. Low-alcohol and alcohol-free wines are increasing in quality, and some consumers are opting for these versions of their favorite styles. Lesser-known varietals and regions are enjoying a growing appreciation for wines from underrepresented regions like Portugal’s Douro Valley, New York’s Finger Lakes, Lebanon or Georgia, and for less common grapes such as Touriga Nacional and Rkatsiteli.
The wine industry is facing significant challenges, from declining consumption and rising costs to increased distributor consolidation and changing consumer preferences. However, American restaurateurs are responding with innovation by curating premium wine lists, focusing on authenticity, and training staff to provide a more personalized experience. Smaller, thoughtfully selected wine lists and neighborhood restaurants with creative pricing strategies are helping to drive profitability and customer engagement. Meanwhile, evolving wine styles – such as crisp whites, organic and sustainable options, and lesser-known varietals – are capturing the interest of today’s diners. By embracing these trends and adapting to shifts in the marketplace, wine programs can remain vibrant and relevant in the coming year.
FRANK PAREDES founded Wine Sense, a consulting agency that helps wineries navigate the U.S. three-tier alcohol system, offering tailored strategies for importer selection, brand development, marketing, and market representation in 2024, leveraging over 25 years of experience in retail, wholesale, and wine imports. Winesenseamerica.com.
