When choosing what route you want to go with your wine pricing strategy, there will be many questions you want to ask yourself…
- How savvy are your guests about the pricing of your wines before mark up?
- Are you offering something rare and therefore able to add a mark up for obscurity?
- Do you have margins to make up for in your food cost?
There will be many judgement calls you have to make based on what you offer and what you understand about your guests. The goal is to find the balance between offering a fair deal to generate return business and ensuring a sustainable profit for your business.
Here are 4 effective wine pricing strategies:
- 100% Mark Up Across The Board
The ultimate appeal of this strategy is the ease. A twenty dollar bottle becomes forty. Many restaurants will choose to mark up more than 100%, or less, depending on what their guests are willing to support.
For example, high-end establishments can often charge as high as 200% mark up whereas guests of more casual restaurants, like a pub or fast service spot, may experience sticker shock.
- Slide The Scales
Your lowest priced bottle has the highest margins and your most expensive bottle has the lowest. A very good reason for choosing this strategy is that it doesn’t punish people for liking costly wines. The ultimate goal is to encourage those types of guests to frequent your restaurant. On one occasion I have seen a restaurant mark their highest priced wine up by only five dollars and this resulted in a semi-viral marketing technique for them. Everyone was talking about the fact you could drink a flossy Champagne for the same price as you would on your own couch.
- The Pinot Grigio Tax
If you know your guests will automatically order a certain varietal – typically Pinot Grigio or Chardonnay for whites. Malbec, or Cabernet Sauvignon for reds – choose to make the most profit off those fast-moving bottles. If you have something special or eccentric, charge less for those.
Again, this fosters an environment for the foodie influencers to return and as the connoisseur of their friend groups, to talk about your restaurant as a destination for wine.
- All Wines Were Created Equal
Charge exactly the same for everything and choose wines within a ten dollar price variance. This is one of the most rarely chosen strategies but there are several benefits. Because it is so unusually seen this creates a talking point about your restaurant. Unlike any other method, you will discover what your guests most want without price being a driving factor.
What pricing strategies do you most enjoy when dining out? Have you seen any other creative options not mentioned here? If so, let us know in the comments; we would love to hear from you!