A No-Whine Policy Restaurant

e-mail

Tim Fish
About Me
My Main Blog Page
Archive

Most Recent Posts:
May 15, 2013 Keeping It Real in Mendocino
May 8, 2013 From Farm to Table, Except for Wine
May 1, 2013 Are We Losing that Wonder about Wine?
Apr 24, 2013 A Spanish Red Value that Puts California to Shame

See Also:
Featured Blogs
Complete Blog Index

3rd Corner concept succeeds at keeping wine prices low

Posted: Feb 16, 2011 10:00am ET

Griping about the high cost of wine in restaurants is a hobby for some people. If there were any money in it, I know a few people who could go pro.

Ed Moore isn't one of those guys. Instead of complaining, he's doing something about it. Grab a table at his bistro, the 3rd Corner, and a bottle of wine sells for retail plus $5. Before you say he's doomed to failure, know this: Moore recently opened a 3rd Corner in Palm Desert, the third outlet of his Southern California restaurant/wine shop in five years.

The 3rd Corner experience isn't for everyone. It's a retail shop that happens to serve food—good food. Tables are scattered around the stacks of wine, and servers spend their spare time tagging bottles with price stickers. I've been to the original, which opened in Ocean Beach in 2006, as well as the Encinitas shop that opened two years later, and I was in geek heaven just roaming the shelves before taking a seat.

It has been a few months since my last visit, and the selection at each outlet changes frequently, but there are usually more than 600 different labels on sale. At the Palm Desert store, right now you might find Shafer Cabernet Sauvignon One Point Five 2007 for $65.35 ($70 suggested retail), MacPhail Pinot Noir Toulouse Vineyard 2007 for $40.60 ($50), Woodward Canyon Artist Series Cabernet 2007 for $35.50 ($49) and super value Zolo Torrontes 2010 at $10.30 ($11).

"People are tired of buying a wine at Costco for 10 bucks and then seeing it for $45 at a restaurant," Moore said. "They're fed up with the markup on wine at restaurants."

The stores maintain a modest stock of older vintage wines, but 90 percent are recent releases. There's no wine list available, except for a page of 20 or so wines by the glass, which is OK by me, since I like to explore and bring the bottle back to the table, where it's opened by the server. Moore's wine philosophy is simple: "We're looking for wines that out-perform at the price point."

The food menu, as you might expect, is wine-friendly, with both whites and reds in mind. You might have grilled fish tacos ($12) at Encinitas, a charcuterie plate ($10) or duck confit with white bean cassoulet ($16) at Ocean Beach and truffle risotto with wild mushrooms ($15) in Palm Desert.

"We're not trying to be the French Laundry or anything like that," Moore said. Maybe so, but I still clearly remember the mahimahi with panko and jalapeño-lime aioli I had a few years ago in Ocean Beach, even though I can no longer recall the name of the saucy Albariño I had with it.

It's tempting to ask, "If 3rdCorner can do this, why can't more restaurants?" But it's more complicated than that. I've known too many chefs, their sacrifices and failures. The high markup on wine is easy profit for some, but a necessity for others.

And yet like many of you, when faced with those markups, I can't always afford to buy the wine that I want with lunch or dinner. There must be other restaurants that have wine pricing policies similar to 3rd Corner. Have others succeeded or failed with similar strategies? Do you think it's a concept that will catch on?

As for 3rd Corner, I'm thinking Moore needs to open an outlet in Northern California. Something a little closer to home, Ed?

Member comments 34 comment(s)

Brian Loring — Lompoc, CA — February 16, 2011 12:13pm ET

Great blog, Tim! I too wonder why more restaurants don't try lowering their prices on wine.

When I see the time, effort, and money spent on the freshest and best food ingredients - hiring the best trained and professional staff - creating exactly the right ambiance to tie it all together.... I'm then confused when the chef/owner "forces" people to order less than great bottles of wine due to ridiculous markups. Too me, it's almost the equivalent of serving the meal on paper plates.

Wine is an integral part of the meal to many people. Why not create an environment wherein people can enjoy the best wines possible with their meal? I know I'd skip bringing my own wine if I knew the wine list had good selections and was priced more fairly. And I'd (gladly) end up spending more money.

Dry Creek Vineyard — Healdsburg — February 16, 2011 12:16pm ET

It's a great concept and one that would be warmly welcomed in Sonoma County.

Robert Larsen — Santa Rosa — February 16, 2011 12:22pm ET

Love this concept Tim. In fact, while in San Diego recently, Robert Whitley suggested this spot, but I landed elsewhere. REGRET! Another trend I've heard of is locals nights, where a restaurant offers great prices on wine AND food. Certainly something needs to happen to get people out eating again. Great piece!

Todd Shreve — Cincinnati, OH — February 16, 2011 12:34pm ET

If you think of the fact that, as with almost all restaurants, bills are paid with food and money is made on booze. What Moore is actually doing is bringing more people into his retail store by serving food. Let's not get a retail shop and a restaurant confused. It happens too often.

Mike Officer — Santa Rosa, CA — February 16, 2011 12:43pm ET

I love this concept and wish there were more places that did this. First time I encountered ordering wine this way was on a trip to South Australia about 12 years ago. Restaurants like Tatcham's near Clare, Salopian Inn in McLaren Vale, and Victory Hotel in Sellicks Beach all had underground cellars with bottles attractively displayed for guests to browse. You'd find the bottle you wanted to drink and bring it back to your table. Markups over retail were nominal I recall.

Stephanie A Hubbell — winter — February 16, 2011 1:29pm ET

Mike and Brian,
This is a slippery slope! I think many restaurants do focus on wine prices as a means of making money.Some have to offset labor,rent,and high food costs.Should their landlords make the rent less?Why don't servers just work for tips?Seafood costs in the most of the country is outragous!Or what if wineries and distributors took less?Brian weren't you in the restaurant business?Love both your wines!

Chris A Elerick — Orlando, FL — February 16, 2011 2:44pm ET

there is a restaurant in maitland, fl (very near orlando) called antonio's. it has an upscale restaurant on the second floor, and a more casual restaurant downstairs. the casual restaurant functions as a restaurant, a wine store, and a gourmet italian grocer. if you eat at the casual restaurant, you can pick out a bottle of wine and drink it with your meal for an additional surcharge (i think it's either $10 or $15). their retail prices are not the lowest in town, but they're competitive. either way, it's a breath of fresh air.

Homer Cox — Warrenton, VA — February 16, 2011 3:03pm ET

"People are tired of buying a wine at Costco for 10 bucks and then seeing it for $45 at a restaurant," Moore said. "They're fed up with the markup on wine at restaurants."
====================================================
Very true. I have MacMurray Ranch pinot that I paid $14 for at Wegman's and lists for $48 at a seafood restaurant we visit. We drink beer when we go there.

Brian Loring — Lompoc, CA — February 16, 2011 3:50pm ET

Stephanie,

I never was in the restaurant biz - so I don't know everything that goes into making a profit operating one. I do know that it must be incredibly difficult given how many restaurants fail. So view my comments within that context.

But as Homer points out above, often restaurants lose out on bigger sales due to their wine pricing. Whether someone decides to order beer instead, order the lowest priced wine, or bring their own and pay corkage, it seems to me that there might be a better answer. And one that is more respectful of the effort that was put into making the best food possible.

Maybe I'm wrong, but didn't the idea of 3x wholesale pricing have to do in part to the fact that restaurants used to cellar wine? What restaurants do that any more? Doesn't the wine inventory turn over much more quickly these days? Maybe I'm missing the mark here - but it seems to me that more people would buy more and better (more expensive) wines if the mark-ups were changed. It would probably result in a lower percentage profit on overall sales, but possibly lead to more overall dollars of profit. AND the customer would have a much better experience, which would hopefully result in more return visits - which I think is the real key to owning a successful restaurant. Like I said, maybe I'm missing some really important point here.

As far as wineries lowering prices - you're right in a lot of cases. Prices have become too high for many wines. I'd like to think we, personally, are doing everything we can to keep prices fair and based upon our true costs. And wineries do take a big hit on price to get wines into restaurants - because we sell the wine to a distributor for HALF of its suggested retail price, which is a QUARTER of its "normal" 3x wholesale price on wine lists.

I do applaud those restaurants that have figured out a way to be more wine consumer friendly. Passion Fish in Monterey CA is a great example. As are numerous other places I've visited all across the country. Keep up the good work guys!!

Tim Fish — Santa Rosa, CA — February 16, 2011 4:07pm ET

Thanks for all the comments so far.

As Brian says, it seems to me there's a way to meet half way - have lower markups on wine and make up for it in volume.

Still, a delicate balance to be sure.

Adrian Bryksa — Calgary, Alberta, Canada — February 16, 2011 5:57pm ET

Great article on a touchy subject. I am in total agreement that consumers are fed up with being charged 2 to 3 times retail for a bottle in a restaurant. Restaurants need to wake up and quickly learn that their archaic model leveraging fat margins off liquor is dying. Unless you have a cellar of rare vintages or one offs and a clientele willing to absorb the price of said wines, consumers are going to look to your competitors that give them options at reasonable prices.

If I was running a restaurant, I would think a full dining room of people drinking wine they brought themselves for example would be a better scenario than an empty dining room accompanied by well stocked, high margin wine cellar. In tough economic times, giving a consumer a reason to choose and come back is more valuable than juicing them for a bottle once and having them leave feeling negative and never returning.

Brendan McGuigan — Mendocino, CA, USA — February 16, 2011 6:23pm ET

I operate a wine list at the Ravens' Restaurant at the Stanford Inn in Mendocino, California. Last year I moved our 140+ wine list to retail + $10 (except for our cheaper wines, which are retail + $5).

I took this action because of my own dislike of high-percentage restaurant wine markups. I dislike actively pushing consumers away from experimenting with higher-end wines, because percentage-based mark-ups punish consumers for buying more expensive wines on the list. For me it was a fairness issue, but since we've made the shift the business end has paid off enormously.

Wine sales have improved drastically (and were already strong). But the biggest benefit was entirely unforeseen. We specialize in Mendocino County wines (our local producers), and especially boutique Pinot Noir from the Anderson Valley.

Many of these wines retail for $50-$100 a bottle, and traditional restaurant markups price them well out of what most customers can afford (and in many cases the restaurants just don't carry their wines, since to have that markup they would end up with a wine too expensive for their list).

Since switching to a retail + $10 model, we've seen a huge surge of support from producers. We are actively encouraging consumers to try these more boutique wines they can't easily find elsewhere, which turns people on to their wines, which gets them wine club members and downstream sales. As a result, our relationships with winemakers have strengthened, and in many cases our discounts have deepened considerably – further improving our bottom line. Effectively lowering the prices of our higher-end wines also gives us room to play with more exciting wines in our BTG program, which further ingratiates us to our diners and the winemakers.

Changing over also allowed us to open a wine shop and easily integrate it into our list, since our markup ($10) and our corkage ($10) are the same. We also offer other incentives, such as waived corkage on wines brought in from local wineries.

Certainly this model isn't for everyone – and some restaurants may have a captive enough audience that they can continue to charge exorbitant markups and see no ill effects. But for us it has paid off in spades, and I feel great about giving people the opportunity to try wines they otherwise wouldn't taste – which ultimately is the goal of my list.

Jamie Sherman — Sacramento — February 16, 2011 6:48pm ET

We could definitely use more wine friendly restaurants. 5 bucks might not be feasible for some restaurants but how about something more reasonable then 3-4 times cost. I recently had a wonderful dinner at the French Laundry but was aghast when I looked at the wine list of 4-5x or even more markup. Ended up getting wine by the glass. Result: 4 glasses of moderately pleasurable wine = 100 dollars. Yikes. Should have paid the 75 dollar corkage fee!

Dominic M Dela Rosa — NJ — February 16, 2011 7:19pm ET

Brendan - I applaud your pricing policy and have written your establishment as a place to stay and visit in the future. It's such a win-win strategy. I wouldn't mind paying $20 + retail in all honesty.

Mark Lyon — Sonoma, CA; USA — February 16, 2011 8:56pm ET

This is a great idea to get middle and working class turned onto wine and going out! I also hope it catches on to bring that body of folks who are also struggling in the downturn and families with kids on a shoestring budget. Going out and having wine shouldn't be an enjoyment only for the elite! My only question is making it family friendly? Kids get grape juice?

Don Rauba — Schaumburg, IL — February 16, 2011 10:22pm ET

Yes, Yes, Yes! If only there was a 3rd corner here in Illinois. That kind of pricing model makes me WANT to be there as often as I can afford. A $5-10 markup or corkage is every wine geek's dream! I'm also in agreement with all of Brian Loring's points... I don't think restaurants merit 2x-3x bottle price, having brought the majority of bottles in within the last 6 months: that's not cellaring, that's just retail shelf stock, and retail doesn't make that kind of margin. What better solution to a "wine glut" than to turn the current model toward a volume model, not scathing profit on a minimal number of bottles.

Brendan McGuigan — Mendocino, CA, USA — February 16, 2011 10:40pm ET

Mark - grape juice is just the ticket! Here we're blessed with two amazing juices from Navarro Vineyards; a non-alcoholic Gewürztraminer juice, and a non-alcoholic Pinot Noir juice. We serve them in fancy glasses too, so the little ones (and teetotalers!) don't feel left out.

Michael C Thompson — Destin, FL — February 17, 2011 6:05am ET

I'm almost afraid to weigh in on this topic with such esteemed premier vintners like Brian Loring. But as a serious daily consumer of wine, I have to say this is a daily topic discussed as I travel all over the world. Certainly the costs of running a dining establishment (or any other business in America for that matter) make it very difficult to keep consumer prices reasonable. However, many restaurants make it with no alcohol sales at all. So there is a middle ground. No matter how well off financially you may be, nobody wants to get ripped off and then be expected to add another 20% on top of that. When I look at a list with 2 to 5X prices and know I own it in my cellar, it is very difficult to pair the wine I would really like to have with a fabulous meal. In addition, you also price out a new generation of individuals who just cannot afford those prices. Granted I know people who go to the wine list and order the most expensive bottle on the list just because ( or they used to before the economy changed). And the new wealth in China has run Bourdeaux prices through the roof, but there is still plenty of great wine in the world to share that real people can afford. So thanks to Brian Loring for making fabulous wines we can all afford, and restaurants like Vintij Wine Boutique in Destin, FL for offering them for retail plus $10 while serving amazing food. It shows that it can be done.

Ted Hudgins — Naples, FL — February 17, 2011 8:37am ET

I teach a wine course in our local University's hospitality management program and we spend a good hour or 2 discussing markups, pricing strategies, etc. and there's no clear winner. I really like the idea of retail + a few bucks to cover glassware breakage, etc. especailly when it helps drive more business to the restaurant. Of course it doesn't work for everyone, but if you can find the right balance between cost per square foot and overall profit, its a winner. If only there was something like that near Naples...

Gary Stoyan — Sherman Oaks, CA — February 17, 2011 11:10am ET

4-5x or even more markup or a $75.00 corkage at French Laundry?? Talk about holding you hostsge. What a joke! No meal is worth getting that ripped off for! Remember, it's just a meal.

Mike Officer — Santa Rosa, CA — February 17, 2011 12:06pm ET

Just to be clear Stephanie, I'm not advocating that all restaurants adopt this model. It obviously won't work for everyone. Just wish there were a few more that did, like one of my favorites in Pacific Grove called Passionfish. Markups aren't much over retail and they have a killer wine list. Usually my wife and I order one bottle when we go out. But at Passionfish, the prices are so reasonable that we typically order two, taking home a half to two-thirds of a bottle to enjoy later that night or the next evening. Looking around at other tables, we don't seem to be the only ones doing this!

Stephen Stewart — new mexico — February 17, 2011 12:11pm ET

In Flagstaff Arizona, they have a place there called the wine loft.Here they offer wines at retail plus $7 dollars.Its not a restaurant as such,but you can take your own food to enjoy with your wine ,plus they have great cheese.These are the types of establishments are would rather hangout at.Not the rip off joints!

Homer Cox — Warrenton, VA — February 17, 2011 12:25pm ET

At least there are restaurants that have somewhat accurate wine lists on their websites so you should know what you are in for before you arrive. One of our favorites is in Great Falls, VA which does not list their wines on their site. I order wine there that I am not familiar with and it would be nice to research before hand.

Stephanie A Hubbell — winter — February 17, 2011 12:58pm ET

This topic got everyone fired up!I think that wine prices are over the top myself,but blaming restaurants only is a unfair look at the wine world as a whole.That type of thinking brings me to my life long idea.In many countries across the world people have to serve time in their military,I think before college everyone in the U.S. should have to spent 4 months working in a restaurant.It would be very enlightening to for alot of folks.Great comments all around.

Brian Loring — Lompoc, CA — February 17, 2011 5:14pm ET

Stephanie,

Please don't think I don't respect and admire the effort, creativity, and investment it takes to run a successful restaurant. My goal isn't to belittle or criticize - but rather to encourage restaurants to provide a better wine experience for their customers. Which would hopefully provide more profit to compensate for all the hard work already put into creating and presenting the food. I'm looking for the win-win scenario :)

Tim Fish — Santa Rosa, CA — February 17, 2011 6:17pm ET

Great discussion and good ideas. Thanks all.

Matilde Parente — Indian Wells, California, United States — February 19, 2011 3:16pm ET

Tim, so your readers know, the Palm Desert location is gorgeous, was formerly a very popular restaurant so it's more like a retail shop inside a restaurant than the other way around. Plus, Chef Matt Smith turns out great food (you won't forget his pate or flatbreads, among other dishes). We're looking forward to a special tasting they're doing for us next month with The Girlfriend Factor - and we're thankful to have them here in our desert.

Jeffrey Ghi — New York — February 20, 2011 4:04am ET

I must admit, that I personally as a consumer, could care less about how hard it is to run a restaurant.

It's clearly a very tough business and therefore I'm not in it as I would probably fail miserably. Also as a consumer, if i see 4-5x markup I go straight to the 7$ pint of beer instead.

I've certainly have no shied away from ordering 200$+ bottles from restaurants but only if the mark up is 1.5x.

On the bright side with these high mark ups is that I've learned to cook better at home.

Todd Shreve — Cincinnati, OH — February 20, 2011 4:18pm ET

Jeffrey, what do you think the markup on your $7 pint of beer is? Just saying.....

Homer Cox — Warrenton, VA — February 20, 2011 7:39pm ET

Not speaking for Jeffrey, but there couldn't be much of a markup for a very good $7 pint of beer.

Stewart Lancaster — beaver,pa — February 21, 2011 2:59pm ET

Redfish, a restaurant in Hilton Head offers wine that can be bought to take home or have with dinner and the corkage is $10. It is always on my list when we vacation there.

Leonard & Terry Korn — Cathedral City, California, USA — February 22, 2011 7:46pm ET

Agree with Matilde. The food at the Palm Desert location is great, especially the flatbread pizza with duck confit, brie and carmelized onions. On Saturdays you can taste 10 wines for $10, and have a prix fix lunch for $15 to go along (or order from the menu). Last one we had was a great little salad, short rib and chorizo sandwich on a ciabatta roll, and two homemade chocolate chip cookies with ice cream in between. We frequently go in and pick out a bottle in the retail shop, take it into the restuarant for a $5 corkage fee and select food to go with the wine. The wine prices are extremely reasonable and the selection is great. This concept is wonderful and 3rd Corner does it perfectly.

Jeffrey Ghi — New York — February 23, 2011 9:39am ET

Fact is, my true mark up for a 7$ pint of beer is probably at WORST case, 6$. Probably less for a good tripple or ipa.

even a "reasonable" mark up for a bottle of good wine is clearly more then 6$, unless the restaurant is serving yellow tail.

John Case — Seattle — February 24, 2011 1:06am ET

I don't think I have bought a bottle of wine in a restaurant in my home city in 5+ years, instead I always (always) bring from home and happily pay the $15-25 corkage. As a result we drink better wine that is nearing or at maturity to go with fantastic local food.

I'd like to thank all the restaurant owners in Seattle for overcharging on their lists. I drink much better wine because of it.

Would you like to comment?

Want to join or start a discussion? Become a WineSpectator.com member and you can!

To protect the quality of our conversations, only members may submit comments. To learn more about member benefits, take our site tour.

exploring wine with tim fish