Last week I wrote about the concept of the Overton Window and speculated about what it might be able to tell us about the constantly evolving wine market. This week I follow up with an interesting study that finds a kind of “Overton” effect in restaurant wine programs and suggests that many restaurants may be leaving money on the table by the way they bind themselves to a particular narrow wine “window.”
The Backstory
Briefly, the Overton Window is a concept taken from the world of political analysis. It refers to the range of public policy options that are deemed generally acceptable at any particular moment. Political success, according to this theory, is all about either embracing the window to gain public support or finding ways to shift it in the direction you favor.
Financial Times columnist Tim Hayward applied the Overton Window concept to restaurant food. He noted that many creative chefs find themselves constrained by the customer Overton Window and the need to have “safety food” options like hamburgers, simple fish and chicken dishes, etc. so that customers feel comfortable coming to the restaurant.
If you choose to ignore the window conventions, you risk losing customers and ultimately your job. Hayward speculated that the most successful chefs stick to the window, but work on the edges to express creativity without leaving their customers behind.
I had more to say about this, of course, including some comments about giant hairballs, so you might want to read last week’s column if you haven’t already done so.
Wine Versus Beer and Spirits
The Overton Window is a new concept for me, but learning about it instantly reminded me of research that my friend James Davis did for his Master of Wine thesis, “Understanding consumer attitudes to large wine-brands as a purchasing cue in the United Kingdom (UK) multiple on-trade: a comparison of value and premium multiple outlets.”
The thesis is suitably complicated and probes many questions. I am going to simply (and probably over-simplify) and focus on just a couple of the results.
Davis wanted to understand the difference between wine programs in value restaurant chains (such as Wetherspoon’s and Harvester in the UK) and premium restaurant chains (such as Wagamama and Carluccio’s) and while he did not use the concept of the Overton Window, I think you will probably see why I think it applies.
Davis noted that when it comes to popular brands of beer and spirits, consumers expect to find them in both value and premium restaurants. The beer and spirits lists of the two types of restaurants aren’t identical by any means, but popular brands that are available in the shops are likely to be found in both types of establishments. This is consistent with the concept of staying within the consumer comfort and acceptance window.
Davis noted that the conventional wisdom is that wine is different from beer and spirits when it comes to popular brands. Widely-distributed wines like Hardy’s and Jacob’s Creek are likely to be found in the value outlets, but are not typically found in the premium segment. In other words, the restaurant wine windows are assumed to be much different. His research of the chains’ wine lists generally confirmed this finding, indicating that the restaurants treated wine a bit different from beer and spirits in terms of the types and range of brands on offer.
So, if you are following me so far, it seems that restaurants may be using their wine lists to communicate their identities (as value versus premium) more than they do with beer and spirits. Interesting, but is wine really so different from beer, spirits and food? Are the value and premium wine windows so very different?
And the Survey Says …
Davis then surveyed consumers and he found that many of them would have ordered wine at the premium restaurants if there had been a popular brand on the list. In other words, the windows in the two types of establishments may not be so distinct as conventional wisdom suggest.
Perhaps restaurant wine should be a little more like restaurant beer and spirits and not try to create its own special window? To quote from Davis’s thesis: “Premium outlets that do not list any large wine-brands are missing out on sales according to the findings of the consumer survey and also the wine-list review.”
This seems to me to be consistent with Tim Hayward’s hypothesis about restaurant food. Consumers want those safety options and you ignore them at your peril. Given that a widely available “safety wines” might be pretty popular (think Kim Crawford Marlborough Sauvignon Blanc, for example, or Mondavi Napa Fume Blanc) I am not sure about the logic of avoiding them entirely, even if you want to construct a list that probes the creative boundaries or defines an image.
How Different is Wine?
As I said before, Davis explores more topics and provides more analysis, but this is where I will stop. My purpose is simple: maybe we should re-examine what we think we know about what works best for restaurant wine.
I’m not recommending that fine dining establishments limit their wine lists to what a consumer can find a Kroger’s or Tesco, just suggesting that broadening the list to include more popular (and probably cheaper) wines that fall squarely within the generally accepted wine window might improve wine sales while making customers happy, too.
If a restaurant is willing to offer a gourmet hamburger to give nervous customers something to hold on to, maybe there should be more similar wine choices available. Many do this, of course, but sometimes it seems like all the attention is on other parts of the wine list.
I have written many case studies of different industries over the years and one thing I have found is that each sector confidently believes that it is different from the rest. And of course important differences do exist. But it is wise not to ignore potential lessons from other product categories, especially when consumers see them as part of the same experience as they are likely to consider restaurant food and beverage choices.
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A quick note about limitations. Davis’s study is obviously limited to those value and premium dining multiples that he studied in the UK and the consumers he surveyed there. Use caution in generalizing to other countries and other types of dining establishments.
Also please note (as if it isn’t obvious) that my concern here is increasing wine sales and the restaurants may be more interested in other things. Perhaps there is more profit (or faster table turnover) with beer or cocktail sales.
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No dia 19/04/2016, às 10:05, The Wine Economist escreveu:
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Mike – interesting (as always). Two major deltas between beer vs. wine are brand prevalence and pricing. Take the top 10 beer brands, and you’ve probably got 80% of the market – and most of them are within 15% price-wise. But the top 10 wine brands – first of all, hard to define (Gallo/Bronco/KJ?) and the price points ((80% of all wine sold is <$10). So take the super-premium segment, and now you've got hundreds of small players without cache to the general public. That's been the Chard secret of KJ, SonomaC, and Rombauer – and you can list all the other varietals and brand identities. Whole different game than beer. Methinks while there is value in looking at beer vs. wine, it is a case of apples vs. oranges. And radically different consumer viewpoints…
Good point! Thanks for writing, Joel.
If the premise that restaurants could increase sales by offering safety choices is correct (I agree) it doesn’t necessarily follow that the (only) way to do that is offer familiar supermarket wines. Re-formatting the wine list might do. Too many wine lists are indecipherable. For simplicity imagine something like sections called ‘solid value wines’ and ‘premium experience wines’ with different price points. Anything to help guide consumers who are not experts, are not familiar with the list, and are reluctant for many reasons to ask will be an improvement.
I agree, Tom. Smart strategy.
The problems I see here are 2:
If a middle of the road restaurant wants to offer safe wines, then I would assume margins would be tighter as customers that are comfortable with certain brands would probably be more apt to know the retail cost of that wine. The restaurant would have to juggle actually selling a glass/bottle of wine they might not have while keeping it profitable compared to other wines/beverages on list.
Finer restaurants tend to attract more adventurous eaters and, probably, wine drinkers. While a hamburger can be a “safe” choice for this type of restaurant not wanting to alienate the cost/price is a lot less transparent than a the cost of a supermarket super brand. If I were to see such a wine in a fine restaurant I would have to revise my concept of “fine”. Snobbish? Possibly, but restaurants or, any service providers, can’t make everybody happy all of the time.
I agree with you, Stefano, especially abut the transparency issue. One comment on last week’s column noted that margins on food and wine can be the same, but people don’t seem as aware of food margins as wine margins. Thanks!
I would argue that most customers know the prices of the name brand beer and spirits but restaurants do not hesitate to continue to promote them. Wine is the one alcoholic segment that seems to be most challenging to get past the restaurant gatekeepers. Why is that?
Yes, surveys can be a tedious exercise, and I sincerely hope Mr. Davis’s efforts will earn him his MW! I am not surprised to read that many would-be customers say that they “would have ordered wine” if there were familiar or less expensive brands on certain wine lists. If you ask someone a straight-up question, they’ll give a straight-up answer.
Yet anyone who has operated both high-end restaurants and value oriented restaurants would tell you that customers do not go to high-end restaurants looking for everyday “comfort” wines, and they don’t go to casual, value restaurants looking for Lafite, Musigny, or something esoteric or cutting-edge.
Despite the results, some of Mr. Davis’ thesis questions are simply moot. I was in the restaurant business for 28 years; and if there’s one thing I’ve learned, it’s that guests adjust their buying habits according to their expectations. It’s the same reason why you generally do *not* find a run-of-the-mill cheeseburger or Taco Tuesdays in multi-star white tablecloth restaurants driven by innovative cuisine; and why you don’t find farm-to-table gourmet dishes in fast-food restaurants. Certain things, you can’t do even if you tried.
Ergo: it is not true that top rated, innovative restaurants are leaving money on the table by not offering larger offerings of familiar or value brands. In most cases, you might see a sprinkling of this or that, but only because they see only a sprinkling of guests who even want these kinds of wines. Generally speaking, customers are not stupid, and neither are top restaurants. There is a symbiotic relationship involved here to which this survey doesn’t quite seem to wrap itself around.
But it is something that most successful restaurateurs would tell you: that it’s extremely difficult, if not impossible, to run a be-all/end-all wine program, where you can successfully sell wines appealing to all tastes. This usually doesn’t make a lot of sense. You simply end up carrying useless inventory that eventually needs to be dumped. The way it actually works is that it is always best for restaurants to find their niche, and then excel in it. That’s what customers seem to like best. And if they continuously prove it through what they actually buy, is this really wrong?
James Davis’s thesis throws up some interesting points. I think it’s key, however, that it’s not so much the consumer as the restaurant/on-trade premise owner (who whoever’s in charge of buying) that’s the obstacle.
Their awareness of what’s on the retail shelves is acute, and they avoid duplication like the plague. This even extends to an entire winery’s output.
Case in point; I used to sell Yalumba, which frequently got the “isn’t that something one rather sees on the supermarket shelves?” comment thrown at it, despite the tiers of quality/price within their product range. Thus a premium restaurant wasn’t interested in The Signature/Virgilius/Hand-picked range simply because the sub-£10 Y-Series was in the local convenience store.
Then there’s the average wine consumers’ familiarity with a regional style over a particular brand/winery. So any old Chablis/Marlborough Sauvignon Blanc/Rioja will do. In fact, I’m sure a lot of consumers think “Marlborough” IS a winery.
And then there’s the unexplained anomaly of Champagne. There restaurants are happy to have the same brands (Veuve Clicquot, Moet & Chandon, Bollinger etc) on the list, heavily marked up, but knowing that even your local garage sells them for a fraction of the price.
Finally, not sure about Harvester, but Weatherspoons is known for operating at retail margins, so can get away with selling brands for a little bit more than they’re offered at retail.
But your premise, that if something in the ‘window’ were to be offered it might improve wine sales (if only be halting the deferring to an alternative drink like beer) is probably bang on the nail.
Trouble is on-trade ‘nails’ tend to take a lot of hammering, and are too rusty to budge much.
Many great points here — thanks. And I love the hammer and nail comment.
No problem Mike.
By the way; did you know the story as to why Weatherspoon’s came to be so named?
Founder Tim Martin had a teacher at school who’d told his parents he’d amount to nothing.
That teacher was called Weatherspoon.
Knowing the teacher would see his own name all over the country, he named the company after him.
Just to rub it in. All owned by the pupil that would come to nothing.
(cited in Dave Trott’s “Predatory Thinking”)
Very funny! Thanks for sharing that.
Mike
I believe Damien and Randy are correct. Everyone who’s run a restaurant and looked at the numbers can tell you that making people comfortable is paramount.
However, what they want is different. We have all sorts of comments on Trip Advisor from the very useful (did you know that Americans consider it weird not to be handed the check upon saying they don’t want anything more?) to the less so. For instance we’ve had people comment on our (so called premium) paper napkins by saying “a restaurant of this caliber should have cloth napkins”. We are (or consider ourselves to be) a brasserie, for us it’d be weird to use cloth napkins. Actually, when the restaurant opened it had white table cloths, but a lot of people said “it looks too high class for me/for tonight/etc” so we dropped them. People immediately came more often and comments tended to go in the direction of “it’s so cosy in here”. The style of the food, service and wine list were all the same as before (prices the same as well).
As for the Overton Window I’d say it very much exists. I know of similar establishments that do not sell ripassos as they think the category is crap (so do I), but if they have guests who look for it – why not? Here the Overton Window doesn’t consititute familiar brands (luckily), but categories of wine, Chablis, Sancerre, German Riesling, Chianti, Côtes-du-Rhône, Prosecco, Valpolicella, Barbera and Ripasso. You can drop some of them, but not all. I’d be a moron to drop barbera, but I wouldn’t have the cheapest, most commonly found one at the local shop. Quite a few would probably buy it, but they’ll buy any barbera on the list provided it’s not too expencive, and if you have the worst, most scoffed at barbera on your list people with more wine knowledge (and snobbery, one might argue) would look at the list and assume you don’t know the first thing about wine. Which would lead them to either not come or not buy premium wines.
As for Champagne; the large brands were never that big here as we have a ban on alcohol advertising, we can have any Champagne. I use Tarlant Brut Zero as the house Champagne.
Great series of articles and one of the most enlightening and civil comment sections on the web.
One important “value-creating” factor in restaurants that hasn’t been hit on in this conversation is the element of service. A restaurant’s menu and wine program shouldn’t be a two-dimensional offer that only exists on paper. Your staff should bring these selections to life.
The level of service and wine education a server or sommelier offers their table can create understanding and comfort in lieu of familiarity. To the point of others in the comment section, many drinkers respond to familiar varietals and wine regions in the absence of familiarity with a specific label or producer, a great staff will find a way to connect a guest to the list.
Good points were also made on menu organization, and the economics of wine mark-ups. Both are important when considering building a solid wine program.
But a discussion built around casual chains and fine dining establishments doesn’t address the needs and budgets of most restaurants. Chains have purchasing leverage that most restaurant’s can’t afford. And fine dining establishments have the ability to mark-up wine to create better margins that make up for food costs. Most restaurants don’t have this ability either.
Again, I come back to service and educating guests as a way that all restaurants can create and highlight value, even if they promote a niche list.
While I understand the point of the article, I find it disappointing to see most restaurants wine lists offering the same old tired wines at three times the bottle price. That shows no imagination and in many cases a wine list prepared by a distributor…for free? Then of course there is the outrageous markup on sparkling wines…even prosecco…presumably on the idea that you will buy them if you are celebrating something
My son-in-law is a chef. I suggested once that he sell one wine by the glass…and only by the glass…that is a great value and less than the others. He said they tried it (this was an upscale restaurant), and no one would order it so they gave up on the idea. People didn’t want to appear cheap when they were taking guests to dinner.
Years ago, in San Francisco I was in a restaurant that offered a chardonnay only by the glass at $13. The going price then was about $8, so I had to try it. It was Cambria Julia’s Vineyard Chardonnay. I thought it was fantastic but too expensive by the bottle. This had been an experiment by Cambria to see if price influenced taste and perhaps it did. I just know I really liked it. Of course, you can buy it anywhere in the $14 range – for a bottle. It is my house chard.
Lastly, when travelling in Europe you see wines in restaurants at or near the market price in a wine shop. It is appalling to pay huge markup’s for average, non-descript wines. I understand the pricing and that the markup in food covers the overhead while the wine and bar provide the profit, it is just that the consumer is being horribly shortchanged. I suggest checking if there is a corkage fee and bringing a special bottle of your own, explain that when you arrive, and most importantly offer the server a taste (if there is any leftover I leave that for the staff). Frequently, I have had the corkage waived even though I didn’t expect it. But please: don’t bring several bottles and don’t bring them off the shelf of a store…that is bad form!