The Shape of Things to Come:
Restaurant Wine Sales Post-COVID

The United States is the largest wine market in the world. This has been a long time coming. Of course, our position as the #1 wine market in the world in linked to our population: at about 330 million people, we are the 3rd most populous country in the world. But our growing consumption per capita is what really excites wine industry leaders.

Though we are #1 in volume of wine sold, but we are still only #15 in consumption per capita. But that’s way better than where we were in the middle of the last century. In 1947, US consumed 3.17 liters per person annually. By 2018 that figure was over 11 liters per person*. We are still quite a ride from countries like France: in 1947 they were boasting 141 liters per capita. It is now just under 40 liters per capita, and decreasing (while we are increasing).

But not only are we consuming more, in the last decade or so we are consuming better. By that Geek isn’t referring just to the overall premiumization in wine sales, i.e. the general trend towards drinking higher priced wines, but also to the very wide range of wines from all over the world, from grapes like Nerello Mascalese and Timorasso, rather than just Chardonnay & Cabernet. And it is overwhelmingly restaurants that have been exposing American consumers to these esoteric—sometimes eccentric—wines. Now however, due to several factors, Geek fears we will be seeing fewer of these ‘discovery wines’ being offered.

First, while discussing re-opening strategies with dozens of Michigan restaurateurs, they are almost unanimous in their plans to shrink their wine lists. The logic is that if they will have lower sales due to reduced seating capacity, they need to reduce their inventory costs. Makes sense, but it means fewer choices. Next, add in the fact that most French and Spanish wines are still carrying the 25% additional tariff imposed on them last Fall. So, a Provence rosé that wholesaled for $160 a case last year would now be about $200 to $210 today. This means the bottle cost exits a price point that is practical for restaurants to offer. Guests will pay $12-$15 for a glass of rose; these same guests would be much less inclined to pay $16 to $20. Hence these restaurateurs will go with one of the tried and true brands from America to get the bottle cost they need. Note Geek isn’t implying these ‘tried and true’ wines are less good, they just don’t shall we say, push the boundaries and expand guests’ horizons—something many diners enjoy. On the tried and true reference, that is the other consideration: in uncertain economic times, consumers tend to play it safe. Rather than try an unknown wine from an esoteric grape—which they may not like—they stick with things they know; wines we refer to as comfort wines. Indeed, sales of brands like Kendall Jackson are thru the roof.

The good news is restaurants are reopening, so at least we can socialize again. And Geek is quite confident that slowly but surely, those restaurateurs that have prided themselves on their curated wine lists will put their noses back to work and start finding us those weird and wonderful wines again.

We’re here to help you grow your business!

*The Wine Institute

2 responses to “The Shape of Things to Come: Restaurant Wine Sales Post-COVID

Posted by Jeanie Branch

Is Great Lakes Wine & Spirits a walk in store? I was a long time customer at Champane’s Fine Wines and hoping you are a walk in store.
Thank you!

Posted on July 18, 2020 at 9:07 AM

Posted by Brewminations

Hi Jeanie,

We are a Michigan-only wine & spirits wholesaler, we only sell to Michigan licensees.

Cheers,
GLWAS

Posted on July 20, 2020 at 9:50 AM

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