In a recently conducted survey on our website at Winestyle.biz, we asked the wine and restaurant industries to complete and answer truthfully a few questions about wine listing fees. The results of this survey are below and divided into various categories.
Wineries have their say: -
Of all the responses received a staggering 74% of them pay listing fees to various establishments with the majority of the fees going to restaurants and the rest divided between liquor outlets for inserts in catalogues and display space. One comment received which we thought deserves a big cheer, is that the listing fee is paid to the sales representative.
Wineries are mostly charged per wine listed and are paid to the various establishments predominantly in the form of cash, stock and advertising on a yearly basis and negotiations are discussed with the member of staff in charge of designing the wine list. It is a concern that only 16% of negotiations are with the General Manager and even less at 7% is with the Owner of the business.
Generally speaking, they are striving to ensure that service staffs employed by these establishments have the product knowledge of the wine by offering training sessions (a free service) and incentives (cost to winery).
The big question asked and answered: - 73% of the wineries have NOT seen a marked increase in sales since paying for a listing fee.
Restaurants have their say: -
We were not surprised that the restaurant industry were not forthcoming in completing the survey (reasons could include: - fearful, nervous, apprehensive....perhaps!)
43% of the restaurants responded that they receive listing fees, which are charged for per wine listed. Payment is equal in the form of cash and stock at the inception of the list. None of the restaurateurs discussed the fees with the owner of the winery and negotiations are with the representative of the farm.
The representative performs the majority of the product knowledge training and a staff member with training skills conducts 29% of training in-house. On the up side, 71% of restaurateurs create incentives for staff to sell and up-sell all wines listed.
The Costs Involved: -
Apart from the survey, we did receive information from a winery via our contact page (who will remain anonymous) on some of the costs. For the year 2010 listing fees at restaurants amounted to R52, 000, catalogue inserts at retail outlets like Makro and Ultra Liquor etc R110, 000 (which does not include end row displays and in-store promotions). Some restaurant chains charge R1, 300 per wine, but then you are listed at all the stores in the chain. Up to 7% discount to the distributor who has the wine on their portfolio, which does not guarantee listings. Think about it, re-read and you do the Mathematics!
Our Opinion (everyone is entitled):-
The most discouraging part of the restaurant survey was that they were NOT prepared to outsource the design of the wine list OR outsource a training company at their expense to perform basic wine training! It is usually left up to the floor manager (who has a lot of other duties), distributor (with usually 60% of their portfolio represented) to compile and train the list. Yet, they receive fees and have mark ups of up to 300% on the wine list.
To those who do not pay or receive listing fees, design and compile your own lists based on the merit of the wine, see training as an investment, we commend you! May you create many memorable dining experiences for your patrons! Comments from all parties via the online survey are posted below with names omitted.
With loads of cash, stock and discounts being given and received, does the small business owner, consumer or guest care? Yes, we think so .........
NIKKI DUMAS