South Africans drink a lot less wine that one might think. Only about 10% of alcohol consumed is wine of some kind. Of that wine consumed, only about 50% of it is sold in bottles, the rest is sold in packaging like box or tetra-pack. The point of these stats is that there is plenty of room for growth in the premium wine sector in South Africa.
Restaurants are probably the single best marketing channel for wine brands. Diners get to experience wine in a relaxed environment, with good food and in the company of friends. The positive environment will generally result in a good impression of the wine, especially if the waiter or sommelier can share the story of the wine.
Unfortunately, while there are some restaurants that do create a good impression of the wines they sell, there are many that are sabotaging the wine industry.
There are a few ways in which they sabotage our wine industry:
1. High prices
The mark-ups on wine in many restaurants in Cape Town are ridiculous. How much money should a person have to pay to enjoy a glass or a bottle of wine in a restaurant? What is a fair mark-up? It’s not uncommon these days, for the cheapest wine by the glass to be in the vicinity of R60. At 4 glasses per bottle, that bottle of wine is being sold at R240 and probably didn’t cost more than R60.
Restaurants get their wine at ‘trade’ prices, which is less than a member of the public would pay in the bottle store. Yet when you see the prices on wine lists, they are many multiple of what you would pay in a bottle store.
There are two impacts on the wine industry from this practice. One is that less wine is sold. When you’re paying ridiculous prices, you nurse one bottle instead of enjoying two. The second impact is that people are reluctant to explore new wines. When the prices are high, they can’t risk trying a bottle of wine in case they don’t like it. Ordering a second bottle would be too expensive. So people stick to the wines they know or have heard about, so smaller brands struggle to get exposure.
There are legitimate expenses in serving wines. If a restaurant is incurring these expenses, it stands to reason that they will need to charge extra for their wines.
Examples of these expenses are:
Wine storage
How many times have you asked for a specific wine only to be told they don’t have any left? Many restaurants in Cape Town don’t keep much stock because they know the estates will deliver same day or next day. They also move the stock before they even have to pay for it because they have credit terms with the suppliers. So Cape Town restaurants are saving both money and space.
Depth of wine list
Some restaurants take pride in stocking unusual wines and unusual vintages. They will attend wine auctions and have to pay in advance for wines they may only sell years later. They will need to store these wines appropriately too. They will also stock unusual varietals which only get ordered occasionally, this means they have paid for the wine long before it is sold and they have stored it, and maybe chilled it too. Additionally an interesting wine list would usually have been developed by a consultant, which would also be an investment.
Stemware
Drinking wine out of fine stemware enhances the experience. But how many restaurants are prepared to invest in decent glasses? Every restaurateur knows that they will probably lose several glasses a day to breakage. If you are not incurring this cost, why are you charging me so much for my wine?
Sommelier/wine steward
Having a well-trained sommelier or wine steward to assist patrons with their decision regarding which wine to select, makes the overall experience so much better. The patron doesn’t have to worry with reading through the whole wine list and stressing about making the correct choice. The wine will match the preferences of the patron and it will go with the food, thanks to the input of the sommelier. But sommeliers and wine stewards come at a price.
Wide selection of wine by the glass
Normally, restaurants have just a few wines by the glass. The reason is that there is added stock related admin when having to manage multiple open bottles and those bottles if not used in time will have to be thrown away. That additional wastage could justify higher prices on the wine list.
Other expenses
Does the restaurant serve generous glasses of wine? Are there decent decanters for wines that ought to be decanted? Is there a large selection of white wines requiring increased fridge space?
When I walk into a restaurant and many or all of these elements form part of the wine offering, I don’t mind paying higher prices. If they are not, I see no way to justify those prices and I feel ripped off.
2. Bad / ‘bought’ wine lists
There are so many fantastic wines in South Africa and a restaurant would be the perfect opportunity for me to familiarise myself with some of them. A wide selection of wines, with a sommelier who knows what they are talking about would be a perfect scenario. Sadly, there are so many boring wine lists which just list big name wines that everyone knows already.
Worse than that though, are the wine lists which are ‘bought’. In other words the estates must pay listing fees in order to be listed. Sometimes to fudge things a little, the listing fee is paid in ‘upgrades’ to the restaurant and presented as ‘marketing’. When listings are paid for the smaller producers can’t compete and the patron suffers with a boring wine list of big brands.
The cheek of this is that after this restaurant has made a substantial amount of money from the listing fees, they still charge huge mark-ups on the wine!
3. Untrained staff
Wine estates are more than happy to do tasting for restaurant staff and educate them about their brand. But it obviously requires the restaurant to facilitate that. Ideally all restaurants would have a sommelier or wine steward to assist the patron with their wine choice, but in the absence of such an individual it would be great if the wait staff could provide at least some input. This would ensure the patron makes a good wine selection and has an optimal experience. The alternative is a stressful situation where the patron tries to guess which wine to order and is either not happy with the choice or it does not support the food properly.
Those are the 3 ways that some Cape Town restaurants are sabotaging our local wine industry.
Can you think of others? Do you think the wine mark-ups are too high? Share your thoughts in the comment section below.
Dax Villanueva has been blogging about food and wine at Relax with Dax for more than a decade. He was also a judge for the Top 100 Wine List Awards for several years.