Restaurants Selling Off Their Wine Cellars Face a Catch-22

Restaurant wine bottles
Alamy

As restaurants across the country aim to survive the extended coronavirus shutdown, some have turned to their wine collections as potential sources of income.

Most states have loosened liquor laws to allow off-premise sales by restaurants and bars. Enterprising restaurateurs are selling their collections directly to consumers via flat discounts, wine clubs, consigners and auctions.

For restaurants with deep cellars, selling wine inventory that amounts to several hundred thousand dollars presents a Catch-22. Wine collections can take years to curate and contribute enormously to the identity and profitability of a restaurant.

When things return to some semblance of normalcy, a restaurant lucky enough to reopen may find itself without the rare and pricey bottles that once attracted guests. If restaurateurs don’t sell them, however, their businesses might not survive.

'Writing a New Business Plan in a Day': Bars and Restaurants Reckon with Coronavirus Pandemic

In Los Gatos, California, Manresa Wine Director Jim Rollston marked his entire list down to reflect retail prices. He kept very rare wines well below the “open market” prices, reached out to regular customers that were collectors and posted about the change on social media.

“Within minutes of our first Instagram post, I had collectors asking about certain wines—Keller, Comte Liger-Belair, Coche-Dury, DRC—and one regular spent just under $20,000 in one go,” says Rollston. “It would take about 30 days of takeout wine sales to equal what we were able to do in three days at the high end, but remember, these kinds of sales are one-offs and not sustainable.”

In Brooklyn, New York, Four Horsemen has one of the country’s largest and deepest collections of hard-to-find natural wines. Recently, it cut wine-list prices as much as 50% to sell to-go bottles directly to consumers.

Its co-owner/wine director, Justin Chearno, asked people to e-mail him directly for the full list and personal recommendations. He says that he sold several thousand dollars of wine in the first 24 hours.

“Right away, we were approached by people asking about the rarest wines on the list: Accomasso and Canonica Barolo, older vintage Yvon Metras, very serious and specific things,” says Chearno. “We sold out of all the [Jura producers] Bruyère Houillon in two hours.”

Pennsylvania law limits off-premise wine sales by restaurants to four bottles per transaction. Philadelphia’s Vetri Cucina debuted a flat 35% discount off the list price of its wines in mid-March. As of last week, it had sold about $20,000 worth of wine, despite the four-bottle per-person limit.

“A few customers are buying thousands at a time, in separate four-bottle transactions,” says wine director Bobby Domenick. “We’re hoping this will help us be able to reopen, and also keep staff health insurance and some of the salaries going.”

At Atlanta’s Empire State South, wine director Steven Grubbs had to first adhere to Georgia law which only allows wine to be taken out if it’s opened, recorked and put in a sealed bag.

But when the law changed to allow to-go sales in Atlanta on March 20, Grubbs put together “mystery six-packs” at various price levels.

“I’ve been able to balance out not only the damage to inventory, but also what’s a reasonable assortment for someone to have on hand in a week,” says Grubbs. “Sure, a person might want to buy all the Dujac I have, but there’s more tragedy there than them buying a six-pack of varied, retail-priced, and entirely ready-to-drink wines, some of which they could certainly never find at retail. It still scratches their itch for the special stuff.”

Wine Retailers Focus on Delivery and Gratitude as Coronavirus Transforms Business

Four Horsemen has essentially transitioned into a wine shop until further notice, with an online store [nextdoorspacebk.com] that will soon feature about 75% of its inventory.

But “this isn’t a fire sale,” says Chearno. “We’re holding on to a lot of the really obscure wines, because we want to still have a wine list that’s different when we reopen.”

Rollston agrees. “I’ve moved to protect some selections so I can reopen, which is the goal.”

Still, wine is meant to be consumed, and there’s a supply chain that’s hurting now as well.

“I’ll definitely reopen with a way smaller program, and that’s ok—lighter, nimbler and all that,” says Grubbs. “And I’m betting all my reps can’t wait to not hear me use the ‘inventory is too fat’ excuse anymore.”

Chearno says that customers will be eager to try the new 2019 vintages when they reopen.

“If we sell now, we get to reorder from our friends who are distributors who are having a hard time now, help our sales reps and pay our vendors,” he says. “I know restaurants are reluctant to sell wines at a non-restaurant price, especially limited quantities, but there’s always more wine.”

Published on April 9, 2020
Topics: Latest News