Stanford GSB
Thursday, January 14, 2016
The Cheapest Wine at the Restaurant
I heard in one of my econ classes that we should avoid the second cheapest bottle on a wine list as, in most restaurants, this is the one the restaurateur pays the least for. Knowing that customers don’t want to appear tight, owners tend to put the cheapest wine at a price slightly higher than the house wine – thus making the most profit. In most cases, the house wine will be better and cheaper. Stay savvy...
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This certainly confirms our tendency to treat wine as a status good! And on this note of protocol for selecting wine at a fine dining establishment, I would concede that the tasting of wine before it's poured may be considered a bundled, valet service of sorts for the order recipient to convey the sophistication of his or her tastes before fellow guests (with a pensive, discerning expression). Not having a sophisticated palate (yet), my tastes aren't particularly discriminating on these occasions.
ReplyDeleteInterestingly though, I wonder how socially acceptable or common it is to decline a wine pouring despite tasting it? What if the bottle was opened specifically for your order? Surely it wouldn't be acceptable to decline and not even order a substitute?
If I were a restaurant owner stocking expensive wine inventory, I would have clear policies related to customers declining the pouring of a bottle opened specifically for the order.
I have been in this situation before. It is completely acceptable to refuse the bottle if there is something fundamentally wrong with the wine (is corked, cooked, etc.). As far as declining because you don't like it...seems less acceptable.
DeleteThis post is interesting. From now no I should avoid the "second" cheapest one on the list. By the way I am just wondering this rule is really applicable to most restaurants. Just in case, I would ask them beforehand whether or not your restaurant follows the rule.
ReplyDeleteThanks Peter. If this is true it definitely confirms the tendency for most people to correlate price with quality and their preference. I've found it really interesting to learn in class that price is a function of many things (i.e. vertical integration).
ReplyDeleteI'm still enjoying my bottle of Cannonball!
I was thinking a lot about the chain of distribution this weekend when I was traveling in Utah (where liquor laws are of course especially stringent). We were lucky enough to pass a liquor store while it was open and decided to go in and purchase a bottle of Duckhorn merlot for about $50. The same wine was on the restaurant wine list that evening for $170!! Granted, this was the Jean Georges restaurant at the St. Regis Deer Valley, so I'm guessing the high price was a function of the restaurant's image, the prestige of the chef, and the overall expensive, three-star experience. But I was still shocked to see a margin that extreme. Seems like a huge amount for the restaurant to pocket just by uncorking and pouring the wine!
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