Abe Lincoln Warned You Not to Believe What you Read About Wine Lists and Prices Online

 He said it. He really did. While Abe Lincoln's most famous speech of November 1863 was delivered on the 19th day of that month, his Gettysburg Address simply did not measure up in clairvoyance to his speech delivered just the day before where he warned his listeners that in the 21st Century, they should not believe everything they read on the internet. In particular, and relevant to us, he told the crowd that more than 150 years later, the internet would be littered with a strange hybrid of humans known as influencers and that one of the areas on which they claimed expertise would be the pricing on restaurant wine lists.

Why do I write about this today? Why not? Well the real reason is that yesterday evening, an instagram reel by an influencer was shared with me that purported to tell you what to stay away from on wine lists.

Madame Influencer made her case. And she supported her case with ... her case. For those who need to know, she said that frequenters of restaurants should stay away from the second lowest priced wine on a wine list. Her rationale, supported of course by her rationale, was that the least expensive wine is likely swill that the restauranteur is trying to get you to buy by pricing it low despite its putrid taste, so they jack up the prices on the second lowest priced wine.

Yes, there is some logic there, but no evidence and no general understanding.

Let's backtrack a bit. 

Wine sales are widly profitable for restaurants. While practices vary, industry standard is that they will charge you, at least at the low end and middle of the price points of by the glass wines, their bottle price for you to have a single glass. While many of them have shifted to the 6 and 9 ounce pour options, that standard pour is five to the bottle or about 5.1 ounces. The rough industry norm then is to multiply that price by four to get to a bottle price. 

Rationales here are that they might overpour by a little bit, the wine in the bottle might turn if not enough people drink it and they might even be professional enough to dump a bad bottle. Oh, and they want their margins.

But let's turn to the subjective part. If you live near me, seemingly every moderately upscale wine list in the area has to have an overly abundant number of choices of Orin Swift. Now, I'm not here to comment on Dave Phinney's wines, but what I will comment on are the basic economics. If everybody wants a wine, either the prices go up or there is some concession. Which one is in play here?

More often, it's the concession. If I am a distributor, I might tell you that you can have a case of their 8 Years in the Desert, 6 bottles of their Advice from John, and 3 bottles of their Mercury Head.

You want more. 

OK, I'll sell you more, but in order to get more, you have to play ball with me. I'll double your Orin Swift allocation, but I'm going to make you take at least several bottles of Gruner Veltliner, Harslevelu, Tannat, and Listan Negro off my hands.

We agree. But now you own 6 bottles each of 4 varieties that seem as appealing as castor oil to most of your customer base (of course, my readers know better, but they are also wiser than average on these matters).

But returning to our problem, we have 24 bottles of unwanted wine that are taking up space and for which we have paid. Our servers don't know what they are or how to convince people to buy them. So we make the prices appealing. Instead of pricing my Listan Negro from the Canary Islands (yes, Listan Negro is the predominant wine grape grown in the Canary Islands) at 4 times my cost, I'm going to cut that in half because I want it to move. By the same token, because I know Orin Swift is really trendy here, I am going to increase my bottle price to 5.5 times my cost.

This is actually much closer to wine list economics. Just like everything else, it's about supply and demand. You will typically get relatively better pricing on stuff you've never heard of. 

Typically overpriced relative to restaurant cost at least around here: Chardonnay, Sauvignon Blanc, Pinot Grigio, Cabernet Sauvignon, Merlot, Malbec, and the amazing concept referred to as a red blend.

Typically steals for the consumer even if they are the second lowest priced wine on the list: shit you've never heard of from wine regions you didn't know existed.

It's true. Abe Lincoln said so. It was in his speech of November 20, 1863.