In Vino Veritas - Using Data Analytics To Increase Sales on High-Margin Menu Items

Posted by David Pettit on Sep 11, 2017 3:00:23 PM

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“In wine there is truth,” a timeless phrase that suggests an adult beverage can bring out the genuine “truth” in a person or situation. Little did I know that when I took a few friends up on a casual dinner, we’d run right into the true irony of this phrase.

A Bottle For The Table

Our dinner plans landed us in a large national chain restaurant that specializes in Italian food – a place that I’ve grown very fond of due to their great table service. After being seated, I quickly scanned the wine list to order a bottle for the table. I decided on a $36.00 bottle of chardonnay, which for three people felt like a very reasonable price.

When the server returned to our table, the fun started. “Do you mind opening this bottle, I am afraid of hurting my hand?” This was our server asking me (or someone at the table) to open the bottle of wine – not asking another server, not asking the onsite manager, asking us! It was almost comical that he followed up this request by placing the corkscrew on the table almost to say, “Have at it, folks. Roll up those sleeves and get uncorkin’!”

I’m someone who usually rolls with the punches, so I begrudgingly obliged and tried to move past this awkward encounter. After a glass (or two), I realized that the underlying problem was that our server was probably never properly trained on wine service. He never once came over to refill our glasses, because you could tell he was very uncomfortable with pouring, handling and talking about wine which led to us only ordering one bottle…even though we wanted a second.

Getting To The Bottom (Of The Glass)

Simple math gets me to the real dramatics of this story – this chain has 200 restaurants nationally, which equates to about 4000 servers. I searched the retail cost of the bottle, and it came in at $10.00 and was now selling for $36.00; that’s a $26.00 gross margin. If half of your servers are not good at selling or serving wine, what are you missing out on? And how do you analyze that from an enterprise level? 

In the case of this chain, I’d first start by running reports that only focus on wine sales by server; this would tell me which servers by location are weak at selling wine. And much like the case of our server, I’d run reports on wine sales by server and then cross-reference with tip percentage by server. If only one bottle of wine is being sold and then we see a low tip percentage tied to the check, there could be a correlation. I could use this data to then remediate the problem by reeducating those servers via video training or possibly even work out a deal with my wine suppliers to provide onsite training to my lowest performing servers or locations.

But Dave, we are only talking about $26.00 here, right? Let’s say we identify our bottom 50% of servers across the chain and then we proactively reeducate them on proper wine etiquette, this could enable the popular Italian restaurant chain to potentially sell an additional two bottles of wine per server per week.

Back Of The Napkin Analysis

  • 2000 servers X 2 bottles per week = 4000 bottles per week of new sales
  • 4000 bottles X $26.00 gross margin = $52,000 per week revenue increase
  • $52,000 X 52 weeks in a year = $2,704,000

Almost $3 million in opportunity just by focusing on the unseen data points surrounding a high margin product. These numbers might actually be low, but you can see the point that I am making and hopefully, I opened server’s eyes to the money his lackluster wine skills were figuratively leaving on the table.

David Pettit is Vice President of Sales at Agilence. To learn more about Agilence's data analytics solutions for restaurant organizations, visit our 20/20 RestaurantTM product page.

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