Missing from Wine Lists: extreme value

Customers pay repeat visits to stores that carry “EXTREME VALUE ” wines. Wouldn’t restaurants reap similar benefits if they offered the equivalent?

The wine business was thrown for a loop last year when the introduction of a single brand virtually created a new price category all by itself. The category is “extreme value,” and the brand is, of course, Bronco Wine Company’s Charles Shaw line, aka “Two-Buck Chuck.”

The wines, and their pricing strategy, are the brainchild of Fred Franzia, CEO of Bronco Wines and the largest vineyard holder in America. Franzia believed that since wine competes for a “share of thirst” with other beverages (and not just those containing alcohol) such as beer, soda, juice milk and now water, it should be offered at different price levels so that a greater number of consumers can be exposed to its charms and pleasures. Why not have a glass of Chardonnay with your tuna fish sandwich or a Cabernet with your hamburger or pizza?

Sales of the Charles Shaw wines have been astounding, and now many other companies are rushing to fill America’s retail shelves with bottles that qualify for the $5-and-under extreme-value category.

So much for the retail scene. Now Franzia is turning his attention to another arena where wine meets consumer: restaurants. Franzia believes that due to “exceptional markups in restaurants” wine consumption in the United States is being hindered. “America is not going to become a wine-drinking nation without the kind of restaurant wine pricing that we find in every other wine drinking country,” he has said.

Of course any restaurateur will tell you that they make little to no profit from their food menu; the real profit center—and the reason prices for food menu items are relatively low—is in the sales of soft drinks, beer, spirits and wine. Wine markups in restaurants are typically two to three times cost. But it’s a varying scale. At the high end, markups are relatively low. For inexpensive wines, the markups are higher.

“I challenge all of these restaurants whether independent or chains to provide their patrons with wines under $10,” Franzia said recently. “It can be done.” Just as Trader Joe’s provides their consumers with Charles Shaw at $1.99, Franzia believes that restaurants should make an effort to provide wines at the equivalent, value level: $10 and under. “Trader Joe’s became a destination retailer by providing this opportunity,” says Franzia. “You’d think restaurants would want to become frequent destinations for their patrons.”

Whatever the status of America as a wine-drinking nation, there is no end of excitement in the restaurant industry from coast to coast, and top-notch wine service is becoming central to any restaurant that wants to make a claim to quality—as several articles in this issue confirm. Michael Schachner profiles Restaurant Associates and the Patina Group, the powerhouse companies from the east and west coasts, respectively. Five years ago, Joachim Splichal, the ultra-talented chef who built the Patina Group venue by venue, and Nick Valenti, who has helped nurture Restaurant Associates into the giant that it is today, joined forces, and now both groups benefit from the mutual muscle In this issue you’ll find a report by an entire well-fed team of our writers and editors, who are only too glad to recommend some new restaurants across the country. They found imaginative cuisines, bustling dining rooms and lounges, and, invariably, the growing role of wine as accompaniment.

For D.B. Castlemore’s report on the rise of quality glassware in restaurants, check out our July issue. No longer do you need to tolerate a clumsy, standard wine glass while enjoying gourmet food. Most restaurants have a cache of quality glasses and we have some suggestions on how to upgrade if you don’t find them at your table. Also in this issue, Daryna Tobey reports on our tasting panel’s evaluation of over 100 Chardonnays from Australia. You’ll find some good summer sipping and great values. Along the same lines, Melissa Clark offers suggestions for foods that go with rosé wines—which is to say, just about any food you can name. Also be sure to check out Stephen Beaumont’s report on lagers, the beer that’s been forgotten, or at least taken for granted, amid all the hoopla over microbrews and ales.

Between these articles and our Buying Guide, we present hundreds of great suggestions for the savvy wine shopper. And, as always, whether it’s a Restaurant Issue or not, we strive to offer generous helpings of food for thought.

Published on July 1, 2004

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