Article

To wine or not to wine

Serving wine may be a venture worth looking into. Several fast casuals are boosting dinner sales with the alcoholic beverage.

May 7, 2006

Fast-casual restaurants are on E&J Gallo's radar. After inclusion on menus at Cosi and Mama Fu's, the winery sees opportunity in other fast-casual concepts.

 

Fritz Lance, vice president of E&J Gallo, said the company has observed Panera's success for the past four years. Panera does not sell wine and the company has not indicated it will, but Lance believes the fast-casual demographic is perfect for the wine manufacturer.

 

"We are building proposals to demonstrate how wine can enhance Panera's sales and profits," Lance said.

Research indicates it behooves Panera to adopt wine because more people drink wine today than ever before. According to the National Restaurant Association, 63 percent of full-service restaurants expect customers to buy more wine in 2006 than two years ago.

 

Marshall Goldman, vice president of WineandRecipes.com, said selling to fast casuals may be the next trend for wineries.

 

"Today's market is at the lower end of the price scale. These may be the very wines that consumers in fast-casual restaurants desire — and are willing to pay for," he said.

 

Lance said E&J Gallo has built a wine portfolio that can satisfy a customer "who is coming to a Cosi at lunch and wants to enjoy a glass of California White Zinfandel served from a 187ml single-serve package or a guest who is entertaining a group of clients and selects a hand-crafted Brunello from Italy."

 

Works for PJ's

 

Selling wine has worked for PJ's Coffee and Wine bar. PJ's check average is $4.50 at breakfast and lunch, but that jumps to $10 in the evening, when more wine is sold. Randy Hollingsworth, vice president for PJ's, said when PJ's rolled out the wine bar in 2004, the wine sales goal was 15 percent of total sales. But as Hollingsworth learned, wine quickly became a popular attraction in the evening.  Wine represents 20 percent of PJ's sales system-wide and 33 percent of sales at one store.

 

PJ's Coffee and Wine Bar sees a boost in average ticket during the evening because of wine specials.

Elissa Meadow, president of Solar Harvest, said her independent Beverly Hills restaurant had to offer wine to compete with the full-service restaurants.

 

"People like to conduct business lunches or dinners here," Meadow said. "If we don't serve wine or beer, they might go to a more upscale fine-dining restaurant."

 

Both Hollingsworth and Meadow agree that including wine on a fast-casual menu must be looked at on a geographical basis. But Hollingsworth said the U.S. wine-drinker segment is quickly expanding. According to Impact Databank, total consumer dollar purchases for wine increased 60 percent in 2004 while beer fell 5 percent.

 

But selling wine, beer or spirits means obtaining a liquor license, which can be costly, time-consuming and frustrating. Lance said restaurants need to seriously look at the potential return on investment before adding alcohol to the menu.

 

"Acquiring a license will vary market to market and the cost to add a wine license may outweigh the sales driven through wine," Lance said.