On-Premise Competition Intensifies As Restaurants Favor Smaller Wine Lists

Coming out of the pandemic, many on-premise establishments have pared back their wine lists to focus on the essentials, creating tougher competition for wine suppliers catering to the restaurant trade. John Haggai, president and CEO of Andover, Massachusetts-based Burtons Grill & Bar, says the chain had no choice when it came to cutting back. “We had over 50 wines on the list and we went down to around 16,” he says. “We stayed hyper-focused. But honestly it made us better, more aware, and more customer-focused.”

As the chain pared down its selection, Haggai says well-known California wines were put front and center. “California wines, especially in our restaurants, always sell well,” he says. “They’re known, they’re safe, they’re reliable. We couldn’t afford to waste any, because we didn’t know if we were going to be open next week. We homed in on the consumer and what we knew would sell.” By the start of this year, the Burtons Grill & Bar list remained roughly 80% tried and true, with about 20% alternative varietals and esoteric wines, he notes.

Terlato Wine Group CEO Bill Terlato says there’s no question that restaurants across the country are shrinking their wine lists. “They obviously went through a lot of financial difficulty,” he says. “I think it’s something that will evolve over time, but right now they want products that are selling, and fewer of them.”

Another factor impacting the on-premise is the high turnover in restaurant staffs. “A lot of buyers were either let go during the pandemic or they chose to do something else,” says J. Lohr Vineyards & Wines president and CEO Steve Lohr. “Now there are a lot of buyers who are quite new and don’t have a good understanding of wine and what makes it so unique. And it’s not just buyers—many of the staff are new also and may not know much about wine. Whatever a brand can do to educate serving staff will definitely help.”

Treasury Wine Estates Americas president Ben Dollard also notes the shift. “There are a lot of new people coming into the wine category at the restaurant level who have a thirst for knowledge,” he says. “I see that as a massive opportunity because it gives us a chance to tell our story.” Treasury Americas has created an online tasting tool called Tasting Room that guides servers and on-premise wine professionals on the basics of wine service.

One area of relative constancy is the consumer popularity of certain California regions and varietals. “Cabernet Sauvignon and Chardonnay remain very strong,” says Terlato. “Pinot Noir is also doing well, and Merlot is finding increased interest.” Dollard also sees the ongoing adoption of well-known varietals. Within the Treasury portfolio, he adds, that means solid demand for Napa Valley Cabernet Sauvignon and Chardonnay, and for Sauvignon Blanc—particularly in by-the-glass programs.

Kevin Bratt, concept wine director for the three-location Joe’s Seafood, Steak & Stone Crab, owned by Lettuce Entertain You Enterprises, says wine buyers are always looking for more affordable Napa Valley Cabernet options. “As we find new brands that fit into the sweet spot—let’s say $115-$175 a 750-ml. for Napa Valley Cabernet—we add them because some of the wines that were in that category before have now priced themselves out of that range,” Bratt says.

While the tighter competition has made it harder for smaller players to gain placement, established brands are focused on consolidating more share. Joe Wagner’s Copper Cane Wines & Provisions sourced about 51% of its volume on-premise prior to the pandemic. After the sharp downturn in 2020 and the rebuild over the last two years, that figure rebounded to about 45% at the end of 2022. “National accounts [tended to] stay with what was working and not make any drastic changes,” he says. “If anything, they were cutting back their list and just focusing on what worked. Now we’re still seeing growth, but I think that a lot of that has to do with buyers going with the tried and true and not really taking huge risks until everything gets more stabilized.”—Carol Ward

Tagged : Burtons Grill & Bar, Copper Cane, J. Lohr, Joe's Seafood, Steak & Stone Crab, Terlato, Treasury

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