Wine buyer extraordinaire Christine Parkinson explains how a small, flat-price wine list can keep everyone happy, from ordinary punters and wine-lovers through to demanding bean-counters
How do you make a tiny wine list stand out? What if the price point is low, the gross profit (GP) target is fixed, and everything has to work with Thai food? Is it really possible to keep all your customers happy, even the ones who know their wines? These were the questions we faced at Busaba, our group of three fast-paced, casual dining, Thai eateries in central London.
At Busaba, the wines are printed on a small menu card alongside food and other drinks, and sell at around £15-£16. In the past, sales were dominated by a Pinot Grigio, a basic Rioja and a Pinot Grigio Blush, and the other wines on the list were deliberately cheaper. It was an ultra-basic, no-frills wine list. But we decided that, no-frills or not, it looked rather down-market and six months ago we set about revamping it.
On bigger wine lists it makes sense to position Pinot Grigio at a premium level. For many customers it’s the default choice, and there’s no point making it the cheapest bottle. More adventurous drinkers will hardly notice it anyway.
But on a tiny list the opposite is true. With space for only three white wines, no one can ignore Pinot Grigio.
The fixed price format
lets people choose
exactly what they
want without feeling
extravagant or mean
Originally, we had put Pinot Grigio into the premium slot but making it the most-expensive white just looked exploitative. And for a customer wanting a more interesting wine, it was hardly reassuring that the only other options were the cheapies. To add value in any meaningful way we had to make the list work for everyone.
The breakthrough came when we thought about the sales mix. With such a small list, having three wines that dominate the sales is actually a bonus. It means you can be very confident about achieving your target GP, because it’s almost entirely driven by these best sellers. With the profit taken care of, you are free to list other wines at a lower GP if you want. At the budget end of the market, spending 90p more on the cost of a wine can make a world of difference to the quality, so this is a great opportunity to improve your list.
Our key decision was to set a single, ‘flat’, selling price for all the wines (apart from fizz). This price was chosen so that the best sellers would achieve just above our target GP. With the best sellers taking care of the GP, the other wines could be more expensive. A zippy Sauvignon Blanc filled the second white slot, and we found a lovely Alsace Riesling, which was delightful with Busaba food. Any wine lover seeing this on the list would know it was a bargain.
By applying the same logic to the reds and rosés we ended up with a lovely Chianti and a crisp Touraine pink as our ‘premium’ wines. In each case we could only include these lower-margin wines because the ‘best-seller’ was taking care of our GP.
Customer response to the new format has been really good. Inexperienced drinkers are comfortable with Pinot Grigio and Rioja; wine lovers are happy to find something more serious for the same money. The fixed price format is a talking point, and lets people choose exactly what they want without feeling extravagant or mean. The printed list is neat and eye-catching, and it’s simple for staff. Just as importantly, the numbers have worked out too: GP has actually gone up and sales remain strong.
Wine professionals tend to despise Pinot Grigio and the other ‘old favourites’, but in a situation like this they can be your best friend. Flat pricing is a technique that would work for any small list where a handful of wines are dominating the sales.
HOW TO MAKE A FLAT PRICE WORK:
- Identify the best selling wine in each section of your list (red, white, rosé), typically:
Whites: Pinot Grigio, Sauvignon Blanc or Chablis.
Reds: Rioja, Merlot or St Emilion.
- Set a selling price for these ‘best sellers’. They should achieve about 1% higher than your target GP.
- Make sure your ‘best sellers’ are good enough quality to sell at this price.
- Select your other wines. They can be a bit more pricey, so look for something interesting.
HOW MANY SUPPLIERS?
- It’s unrealistic to think a single supplier is enough, however small your list. Most suppliers don’t have enough wines at a particular price point to allow regular changes to your list.
- Competition is good. Over time you’ll get a better deal if you have more than one supplier.
- Quality varies, so taste similar wines from different suppliers and pick the best one.
- Busaba is currently using Boutinot, Enotria and Ellis of Richmond. Three suppliers for a 12-wine list!
Editorial feature from Imbibe Magazine – September / October 2009