restaurateurs enjoy higher sales with lower …...4 • november 21, 2005 restaurateurs enjoy higher...

4 • November 21, 2005

Restaurateurs enjoy higher saleswith lower markups on bottled wineBv Carolvn WalkuDBy Carolyn Walkup

Wine-loving restaurateurs willingto take chances are lowering tra-ditional markups on their bottledwines in attempts to sell morewine, and several are succeedingbeyond expectations.

Morels, an American Bistro, inBingham Farms, Mich., has dou-bled wine sales and attracted amore youthful and lucrative clien-tele since Madeline Triffon, mastersommelier and beverage director

for the Matt Prentice RestaurantGroup, revised its pricing policylast summer All wines now are 50percent above wholesale, ratherthan the industry norm of doubleor triple that amount.

"Most of the wines we've tast-ed that were sincerely excitingwould often be too high for whatthe average consumer wouldspend," Triffon said. "We wantedto turn people on to these wines."

Master sommelier Madeline Triffon of Morels in Bingham Farms, Mich.,has tallied a doubling of wine sales since lowering maritups.

Morels owner Matthew Pren-tice said the resulting profits arebeing compounded by a surpris-ingly high volume of cocktail andbeer sales at the suburban Detroitrestaurant, which also have dou-bled since the wine-markup strat-egy took effect. He attributes thatphenomenon to the taste manyyounger customers have for thosebeverages before their meals.

One of Prentice's goals was toattract a younger crowd to Morels,where "gray hair was scaringaway young people," he said. Theolder guests continue to dine onthe early side, while more youngadults are coming in a bit later.

Michigan's new "doggy bag"law, which allows restaurant cus-tomers to take home opened winebottles that have been resealed,also has boosted wine sales, Triffonsaid. She observes many couplesnow buying two bottles instead ofone with their dinner and takingunconsumed wine home.

Morels started the new policyafter being open for 16 years, butseveral other restaurants haveexploited low markups since theirinceptions within the past fewyears. Chef-restaurateur CharliePalmer's 3-year-old Kitchen 22 inNew York's Flatiron district andKitchen 82 on Manhattan'sUpper West Side price bottledwine at either $25 or $35."The idea is to be casual neigh-borhood restaurants with really

(See RESTAURATEURS, page 82)

n

Smith & Wollensky last year opened a unit in a registered nationallandmark castle that once housed Massachusetts' militia.

Landmark buildingslure chain investorsBy Erica Duecy

Expensive real estate, lack of park-ing and architectural-preservationrules have long challenged upscaleoperators that sought to openrestaurants in heavily developedcities such as Boston, New Yorkand Philadelphia.

Now some restaurant groups,such as Ruth's Chris Steak House,Smith & Wollensky and McCor-mick & Schmick's, are re-evaluat-ing their real estate options andopening in historical landmarkproperties, often incurring mil-lions in additional build-out costsalong the way

At the same time, brokers andlandlords of landmark propertiessay they increasingly are seekingnational restaurant brands as

tenants because the chains haveample capital to fund buildingrenovations.

In Boston, Ruth's Chris openedearlier this month at Old CityHall, an 1865 national landmarkbuilding, at an estimated cost ofmore than $3 million.

Also in Boston, Smith & Wol-lensky late last year opened in avintage 1891 registered nationallandmark castle that once housedMassachusetts' militia. The res-taurant build-out ofthe four-storyformer Armory of the First Corpsof Cadets ran more than $10 mil-lion — double what the chain hadexpected, according to AlanStillman, chief executive and

(See LANDMARK, page 83)

Salt content looms as possible next big health issue for operatorsBy Brooke Barrier

While trans fats have been a grow-ing health concern for the U.S,restaurant industry in the pastyear, sodium is moving toward cen-ter stage as the next hot topic.

Already, sodium content isunder fire in the United Kingdom,and such chains as KFC andBurger King are looking into waysto reduce salt in food items soldthere. And with high blood pres-sure in Americans — especiallychildren — on the rise and thenumber of deaths attributed to thecondition jumping 56.6 percentfrom 1992 to 2002, according tothe American Heart Association,sodium consumption is movingonto the radars of more restaurantoperators,

"Currently, restaurants aremore concerned with trans fat,total fat and calories, and sodium

is coming below these issues,"said Sheila Cohn, director ofnutrition policy at the NationalRestaurant Association. But, sheadded, "I think the concern aboutsodium is coming. A lot of foodmanufacturers are already mak-ing changes in the sauces andsoups they make."

Salt has long been a friend ofthe food industry because of itswide use as a preservative and aseasoning. However, most expertsagree that Americans consume fartoo much of it in both packagedand restaurant foods.

Excessive salt consumptionhas been linked to such healthrisks as high blood pressure, orhypertension, according to theAmerican Heart Association,based in Chicago.

Currently, about 65 million

One way operators can reduce saHis by offering more Items that arenaturally low in sodium, such asMcDonakl's Fruit and Walnut Salad.

Americans have high blood pres-sure, and 30 percent of them donot know they have it, said Milton

Stokes, R.D., spokesman for theAmerican Dietetic Association.The so-called "silent killer" hasbeen shown to increase risk ofstroke, heart attack, kidney fail-ure and congestive heart failure.Although the cause of high bloodpressure for about 95 percent ofcases is unknown, it can be affect-ed by many lifestyle factors,including excessive salt consump-tion. Stokes said.

Salt is undoubtedly a trickytopic, experts note, especiallybecause some sodium is neededfor good health.

"Sodium isn't entirely a badguy," Stokes explained. "We needsodium for maintaining fluid bal-ance and for muscle functions."

According to the Salt Institute,based in Alexandria, Va.,Americans consume 3,500 mil-

ligrams of sodium a day on aver-age, with men consuming greateramounts than women. TheNational Academy of Sciencessuggests that adults should eat atleast 500 milligrams of sodium aday and, according to theAmerican Heart Association, nomore than 2,300 milligrams, orabout 1 teaspoon.

"It's been demonstrated thatdecreasing sodium is much betterfor lowering hypertension thantaking medication with sideeffects," said Jan Dodds, a repre-sentative from the Society forNutrition Education who wasrecently appointed to the advisoryboard of the American Council onFitness and Nutrition. "So what-ever restaurants can do to fosterthat will be an advantage."

(See NEXT, page 26)

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82 •November 21, 2005 NATION'S RESTAURANT NEWS

Restaurateurs uncork higher sales by lowering wine markups(Continued from page 4)nice wines," said Monica Smith,general manager at Kitchen 22.

Getting case discounts on winepurchases enables the Palmerrestaurants to sell bottles at thoseprices and still make a profit. Theirwholesale cost ranges from $7 to$11 per bottle. Smith said. Wines

by the glass sell for either $7 or $9.That pricing has resulted in

higher bottled wine sales to small-er parties, and sales of second bot-tles are common. Smith said.Wine represents about 23 percentof total sales at Kitchen 22 andKitchen 82, she said.

New York also recently enact-

ed a law allowing restaurantguests to take home resealed bot-tles of wine, and her guests nowdo so often. Smith added.

Mermaid Inn, a casual, 80-seat. New England-style seafoodrestaurant in New York's EastVillage, marks up all wines at $15over cost, said co-owner Jimmy

Bradley. The policy has workedvery well for the two-and-a-half-year-old restaurant, which contin-uously changes its 35-bottle list.

"It's a lower-market concept ina neighborhood that appreciatesfunky ideas," Bradley said. "It cre-ates interest and enthusiasm."

Bottles are priced from about

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$30 to $100, and many MermaidInn customers buy second bottles,he said. Many competitors sell thesame bottles for at least twice theprice, Bradley claimed.

Other establishments offerreduced wine prices on a slowernight of the week. One suchrestaurant is Nacional 27, aLatin-flavored operation inChicago run by Lettuce EntertainYou Enterprises. The restaurant's

Operators also haveboosted trafficdramatically on

slower nights by waivingcorkage fees on diners'own prized bottles.

weekly Wine Down Wednesdayspromotion features five-coursetasting menus paired with winesfor $44. On other nights the samemenu and wines are $69.

Since starting Wine DownWednesdays a few months ago,overall wine sales have increasedfrom 10 percent to 13 percent ofsales, said Adam Seger, generalmanager at Nacional 27.

An unexpected benefit hasbeen higher sales of tasting menuspaired with wines on nights otherthan Wednesdays, Seger said.Chef-partner Randy Zweiban pre-pares the same tasting menu thathe introduces on Wednesdaysthroughout the following week.

"We have to do really creativebuying to make it work," Seger said.Sometimes winemakers, importersand wine shops donate wines for theevening to gain exposure for theirlesser-known wines, he said.

Nacional 27 also featuresweekly Industry Mondays nights,when it offers some 50 bottledwines at retail prices plus $1 tocustomers who work in therestaurant industry or who aremembers of gourmet groups.

Other restaurants nationwide,particularly those in the fine-dining realm, have boosted diningtraffic dramatically on slowernights by waiving corkage fees onbottles their customers bring in.Those fees typically vary from $10to $30 per bottle on other nights.

Wine collectors who appreciatethe economical opportunity to savortheir prize vintages with outstand-ing cuisine and luxurious appoint-ments routinely order second bot-tles from the restaurants'wine listson BYOB nights, operators say.That more than offsets the corkagefee waivers, they add. •

cwalkup@nrn. com

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