How to profit from wine

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Related tags: Wine

Wine has become increasingly important to pubs as a source of profit. Here, Graham Threader, sales director of Waverley Wines & Spirits, looks at...

Wine has become increasingly important to pubs as a source of profit. Here, Graham Threader, sales director of Waverley Wines & Spirits, looks at ways in which pubs can maximize the sales potential of wine.

Wine is a profitable category for licensees and there are a number of well known factors behind this;

  • On-trade wine volumes are rising and will continue to rise
  • Consumer behaviour is better understood and therefore better anticipated, not least because of their buying habits in the off-trade
  • Eating out is now a commonplace event and the partnership between wine and food is well known.

The competitive pressures within the on trade do however, mean that to get the most out of the wine opportunity, some form of business review is necessary. One way to do this is to enlist the services of a wine wholesaler who should be able to provide the specialist advice and insight in order to maximise the wine opportunity.

There are four specific key areas which should be covered:

Wine range

Does the wine range on offer meet the needs of the customers in the outlet? Establishing the correct range should consider such factors as:

  • the food on offer
  • type of customer
  • customer preference for country & grape variety.

Customer sophistication has moved on significantly and "house wine" is arguably an obsolete term given the number of excellent value for money entry point varietal wines currently available.

Pricing

Customers demand value, and traditional methods such as achieving a set percentage for gross profit can establish pricing which is unattractive for consumers.

Increasingly a combination of cash margin and percentage gross profit is being adopted within the on trade, which delivers profit for the outlet and value for the consumer.

Price point sophistication is likely to become more and more relevant to the on trade in the future.

Visibility

Making wine more visible in the outlet does help wine sales. Back bar displays, fridge facings, chalkboards and wine lists all help establish the presence of wine for the consumer. Communicating the wine offer makes it easier for the consumer to choose wine.

Training

Product storage, temperature and handling are all key points which can reassure consumers that quality is an important part of the offer in the outlet. For outlets with an extensive wine offer staff product knowledge can be a key benefit in helping consumers choose wine.

Like most things the recipe for wine success is relatively straightforward. The challenge, however, remains to ensure the opportunity is maximised.

Consider the points above - they are relatively simple to implement and the rewards can be unlimited.

Related topics: Wine, Spirits & Cocktails

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