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Wine Markups at Restaurants Are All Over the Place. Here's How to Parse Them.

Finding value on a wine list can be like hunting for lost ruins in the Amazon. Unless you know a few simple shortcuts.

SLIDESHOW

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Value Fluctuation
Same wines, wildly divergent prices.

Ridge Lytton Springs 2014

$64 at Liholiho Yacht Club
$76 at Mourad
$98 at Gary Danko

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Jacques Selosse Initial Blanc de Blancs Grand Cru

$205 at Zuni Café
$326 at Foreign Cinema
$350 at Quince
$390 at RN74

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Peay Vineyards “Les Titans” Sonoma Coast Syrah 2013

$80 at Piccino
$106 at Foreign Cinema
$120 at Quince
$129 at Gary Danko

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Uncertain times like these often lead to a decline in profligacy and a search for value. But San Francisco has an odd relationship with value, whether it’s $2,500 one-bedroom apartments (grab it!) or $8 avocado toast (is that organic?). This is also true when it comes to restaurant wine lists. To most of the country, a “value” wine might just be cheap. Here, the answer is more complicated.

Most wines on restaurant wine lists are priced by a simple formula: The wine director takes the wholesale price, multiplies by a usually confidential number somewhere around three, and voilà, $67 for that Sancerre.

What make ordering wine in restaurants rewarding for the oenophile, and sometimes intimidating for the civilian, are the exceptions to that formula. And there are many. The same wine can bring very different prices in different San Francisco restaurants, and it can’t all be chalked up to formula variations. In February, for example, a Peay Vineyards “Les Titans” Sonoma Coast Syrah 2013 was $80 at Piccino, $106 at Foreign Cinema, $120 at Quince, and $129 at Gary Danko.

This makes your personal definition of value important: Is a wine a good value because it’s cheaper in one restaurant than another? For me, “value” usually means “compared to the retail price,” because I could always drink the same wine at home. Using that definition, you rarely find value pricing on the cheapest wine on the list, or, despite the long-standing meme, the second cheapest. The reason? Restaurants need to make a minimum amount on each bottle, and that drives up the relative markup on inexpensive wines. If you go to a place like 1760 in Russian Hill, you’ll actually find value in the most expensive wines because there’s no percentage markup at all. Instead, as wine director Gianpaolo Paterlini explains, “We add $40 to $60 to our cost across the board. So a wine that costs me $100 will be around $150.”

That said, prices at the high end vary even more, perhaps because some restaurants figure anyone who can afford very expensive wine isn’t price conscious. At Quince, a bottle of 2002 Salon champagne costs $665 more than it does at Foreign Cinema. But is Foreign Cinema’s $560 bottle of Salon a value when it sells in stores for less than $400? Some would say that it is, and rush right over to drink it.

My single best piece of advice for finding good value is to look at the restaurant’s wine list online and compare its prices to the retail prices on Wine-Searcher. Yes, it’s a lot of work. And no, there is no easier way—but you can at least do it in the comfort of your home or office, without making your dining companions wait for an hour before you order.

For more advice, I spoke to wine directors around the Bay Area. From those conversations, and from scouring wine lists posted online, a few principles emerged.

1. There are very few values on famous brands—like the top names in Burgundy—and wines from famous regions like Napa Valley. It’s much easier to find value by going further afield.
There is more than one reason for this. For one thing, discounted wine in restaurants often stems from a discount the wine director got from a distributor. That’s unlikely with wine that’s in demand.

“If you say you really like Russian River pinot noir, you’re going to have a markup,” says Shannon Tucker, wine director at Foreign Cinema. “On the other hand, there are some Italian white wines, and they tend to be underappreciated: I tend to like some of the wines from Alto Adige that go well with our climate. Same with the Loire reds”—such as the menu’s $36 Domaine du Bel Air “Jour de Soif” Bourgueil 2014, which retails for about $18. “Generally,” Tucker adds, “I’ll mark up something less if I want people to try it.”

2. Many wine lists have hidden gems that the wine director is particularly passionate about.
Building a wine list for a restaurant is mostly business, as wine directors will get fired if they don’t contribute to the overall profits. But there is some leeway for wine directors to bring in personal favorites, and they can’t afford to have them gather dust because that contributes to inventory cost. That said, those wines aren’t always highlighted, because “the somms sometimes keep those things up their sleeve,” explains Andrew Green, the Bacchus Group’s wine and spirits director. “You want to have those arrows in your quiver to surprise and delight and make people happy.” 

So how do you find that gem? If you’re at Rich Table, “there’s a little somm-favorite page that’s not online that we update every week,” says wine director Dominique Henderson. “If I have a natural wine from the Languedoc, I might lose a few dollars and try to make that up on cabernet.”

Otherwise, you can always ask. But instead of asking what’s the best value on the list, which might earn you little more than the sommelier’s scorn, ask what the sommelier is most excited about.

3. Because of the way retail prices for well-known wines constantly escalate, older wines are often better values than younger wines.
Unfortunately, the fast-changing nature of San Francisco’s restaurant scene means that we don’t have places where wines purchased decades before are still available at reasonable prices. Few restaurants have a large cellar, much less a large old cellar.

Nonetheless, it’s possible to find a well-aged, reasonably priced wine on local wine lists. Restaurants don’t necessarily have storage, but distributors do. And while it’s not necessarily common, some distributors have been known to carry back stock that isn’t marked up too heavily.

“I charge based on the cost of the wine,” says Paul Einbund, owner and wine buyer of the Morris. “That’s why back vintages are often less expensive than current ones.”

Paterlini, also wine director at Acquerello, recommends seeking “orphan” older vintages. Wine directors are loath to break up a vertical (a collection of different vintages from the same producer) by selling the last wine from one of the vintages on the list. But if an older wine is not in a vertical, Paterlini says, “I rarely raise the price on those kinds of wines.”

4. Many restaurants charge a markup penalty for champagne.
“The reason is because they can ask for the price,” says Perbacco co-owner and wine director Umberto Gibin. “But I don’t think they sell very much.” Gibin tries to keep his own prices relatively affordable, even if that means taking home a bit less; he much prefers passing along bargains if he can.

Perhaps you can use the restaurant markup penalty as an excuse to drink more champagne at home. In uncertain times, we all need more champagne. At least I know I do.

 

Originally published in the April issue of San Francisco

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