IntoWine recently sat down with Charles Gill, CEO of WineMetrics, to discuss what is an impressive feat to anyone who loves wine, analytics, or both. WineMetrics has assembled an enormous and comprehensive database aggregating the wine lists ofrom restaurants across the US. The resulting data is useful to restaurants and of course wine distributors and producers looking for outlets to sell their wines. To the pedestrian wine drinker, the findings are simply fascinating.
WineMetrics has compiled extensive data detailing the wines that occupy wine lists in restaurants across the nation, from the Olive Garden in Dayton, Ohio to the local French bistro in Lower Manhattan. Acquiring this data must have been a laborious process. How did you go about it?
Much of it is acquired by our distributor clients but a great many restaurants feature their wine lists on their websites, which we utilize. Often we just contact the account and ask for it.
What surprised you as you started assessing the data?
I was surprised how significant portions of overall wine volume were under-represented in on-premise distribution. For example, Australian wines now outsell French wine overall in the US, yet Australia has barely one quarter of the listings of France on-premise.
With so many different themes and styles of restaurants, how do you manage to consistently compare apples to apples?
While there are a myriad of restaurant cuisines available to most consumers, we tend to focus on what we call ‘wine-oriented restaurants’ – these are higher-end casual dining to fine-dining establishments where the wine lists include at least 20 unique wines. In our sample of over 10,000 of these restaurants, over 50% serve American cuisine (Traditional, New or Regional) and nearly 20% offer Italian cuisine. Remarkably, given the massive variety of wines for restaurants to choose from, we see many of the same brands and products appearing with great frequency.
Generally speaking, where are restaurant wine directors missing the boat when it comes to choosing a wine list?
By and large, the top restaurants are fielding superb wine lists. Many of these lists have an average rating of 90 or better and it is often these establishments that initiate wine trends. So overall, restaurant wine professionals are doing a great job. The only shortcoming I’ve discovered is not offering a wide enough selection within a specific price range. Most consumers have a range of wines and producers they prefer and a price range they are comfortable with; restaurants not offering a selection to match these expectations are going to lose sales. This is the reason Winemetrics created the Wine List Analyzer which provides restaurateurs with an in-depth analysis of their current wine list and illustrates areas where the list may be under-performing.
You have the unique perspective of being able to look at restaurant wine distribution from both a macro and a micro angle. To what degree are wine enthusiasts getting access to the best, and most appropriate, wines?
Consolidation is accelerating at all levels. Suppliers (e.g. Diageo, Constellation Brands) are acquiring more producers; distributors are consolidating, forcing more brands into the portfolios of a relatively static force of wine sales people. Restaurant chain and multi-unit companies are expanding, offering, in many cases, the same wine selection in dozens of units around the country. The focus is increasingly on ‘national brands’, those that have the volume and reputation to secure placements in these larger chain accounts. Many of the limited production wineries are now represented by small, independent distributors, who tend to have special relationships with many of the fine-dining independent restaurants and upscale independent retail stores.
To their credit, many large distributors are either purchasing small distributors and running them independently or setting up premium divisions to focus on boutique wine producers. Fortunately, for the consumer, there are more and more web-based wine vendors offering a wine array of great wines from all parts of the globe. The Internet may also become the B2B conduit for small producers. So to answer your question, I believe that consumer access to the best wines, despite consolidation, has never been better.
What types of wine have been trending upward in popularity?
That’s a long list. New Zealand’s Sauvignon Blanc, Argentina’s Malbec, Spanish Albariño, Oregon Pinot Noir (as well Pinot Noir from CA, New Zealand), Washington State reds, particularly Bordeaux Blends and Syrah, Southern Italian reds, Northern Italian Whites, Austrian Gruner Veltliner, Rosés of all types and origins. Prosecco (Italian) We also see France and, to some extent, Germany making a comeback.
Conversely, which types have been trending downward?
Wine consumption in the US has been steadily increasing since 1994 and is up over 50 million cases since 2000, so nearly all categories are growing. The question is not so much which types have been decreasing but which segment are not increasing as fast as others. Certainly Merlot and Chardonnay are seeing their growth slow down on-premise. Red wine varieties are capturing much of the growth, while most white varietals are losing share on premise.
Your web site contains two tools that can be used to access your data, a Wine List Analyzer and a Wine List Creator. Tell us about these tools.
The Wine List Analyzer provides detailed analysis of a restaurant’s wine selection, comparing it with similar restaurants in its region/state. It can graphically illustrate where a wine list is missing an opportunity and identify sub-par or over/under-priced wines on its list. This is available to restaurants in any of the 18 states we cover which includes AZ, CA, CO, CT, DC, FL, IL, IN, LA, MA, MD, MO, NJ, NY (Metro), OH. OR, TX and WA.
The Wine List Creator (WLC) permits a client to create online a simple, compact list of 20 items or a complex, expansive list of more that 500 items in a matter of minutes. Like the Wine List Analyzer, it uses local information to create the lists so the user can be reasonably certain that the wine selected is available in his/her market. The WLC also as an option to utilize on wines rated 85 or better.
How could a small wine label benefit from access to your data? That is, what could they actually do with the data?
Our data is very granular. For example we can track the on-premise hierarchy of brands from South Africa even though that region comprises less than 1% of all wine list entries in most markets. We also provide quality analysis based on accumulated ratings from all major wine publications and on-premise competitive set analysis. We have packaged all of these reports in a B2B analysis tool we call Virtual Brand Manager (VBM).
How would a large wine label with national distribution benefit?
We can do the very same analysis for larger brands with VBM and have the opportunity to provide on-premise portfolio management consulting services to explore untapped opportunities in the market.
Similarly, what learnings could a restaurant -or a restaurant chain- glean from your reports?
For restaurants, the Wine List Analyzer provides the best insights into their lists performance, especially with chain restaurants which tend to have similar wine lists chain wide. This policy may not provide a chain with the necessary competitive edge in all markets. A casual-dining Italian chain’s list in St. Louis may be more than adequate where in Chicago, a highly-competitive Italian restaurant market, the list may not be competitive.
On the surface, one would think that a wine list in an Italian restaurant in Atlanta wouldn't be that different from an Italian wine list in Minneapolis. However you found significant regional differences. How would you describe these regional differences? What are the driving factors behind them? Is it an issue of consumer demand, distributor supply, or are there other factors that contribute to it?
This is a highly complex question. The short answer is that the major metro markets have the most diversity, especially when it comes to imports. They also have a larger percentage of boutique importers/distributors that provide many limited production wines. Also, highly allocated wines, even from the larger suppliers and wineries, tend to be distributed in major markets where their presence on renowned restaurant wine lists is a major element in building brand equity. So the answer is yes, it is an issue of consumer demand and distributor supply and probably less about regional differences.
Wine lists obviously vary depending on the ethnicity of the cuisine. One would never expect to find many similarities between a French restaurant's wine list and that of, say, a Mexican restaurant. Within these ethnic verticals though, what differences and similarities were distinguishable?
We’re finding that this depends greatly on the individual restaurant and where it may be located. Italian restaurants in New York are more likely to have all-Italian wine lists, where this is highly unlikely in states like California or the Pacific Northwest. Generally speaking, restaurants on the East Coast are more likely to have a higher percentage of imported wines than those on the West Coast, not just from Europe but the Pacific Rim also.
California Merlot producers were hammered in the aftermath of the Oscar winning -and Merlot bashing- film Sideways. Has there been a noticeable change in the presence of Merlot on American wine lists?
Sideways did have an impact. Pinot Noir listings exceed those of Merlot listings in our 2007 On-Premise Wine Distribution report. This is significant when you consider that Merlot is still the most widely consumed red variety.