Recession giving restaurants dangers, opportunities
I wasn’t surprised to learn that by-the-glass wine prices in restaurants are “plummeting” in the Bay Area, as the recession takes an ever-deeper toll on wineries.
That’s what NBC News is reporting on its local website. Apparently, wineries that are gearing up for harvest, with its cash-hungry demands, are dumping unsold wine on restaurants, giving diners some of their best bargains in years.
Before the recession hit, the high price of wine in restaurants was always a sore point for diners. Restaurants argued that they had to charge high bottle and glass prices to compensate for breakage, etc. but diners didn’t buy that and frankly neither did I. In recent years, I’d seen a shift away from gouging. Some restaurants, like Dry Creek Kitchen in Healdsburg, let you bring your own wine for free, as long as it was from Sonoma County. Others reduced the price of corkage or dropped it completely, if you bought one bottle off the wine list.
Despite these innovations, you could sense restaurateurs tip-toeing around the issue of price. They didn’t want to outrage patrons, and yet they wanted to maximize their profits. Caught between a rock and a hard place, they’re now being squeezed from top and bottom by the worst recession since the 1940s. Our local wine bar, Franklin Square, now offers $1 wine tasting on Thursday nights. I don’t think this even covers Rick Mitchell’s costs, but it does let him stay connected with his customers, and vice versa, which is a valuable investment for when (if?) the recession ends.
One question raised is whether casual-dining restaurants and fine-dining restaurants are feeling the same pressure. An interesting study released last month from the Cornell University School of Hotel Administration, and titled “Wine List Characteristics Associated with Greater Wine Sales,” looked at just this issue. It found that “casual-dining restaurants seem to have downward-sloping demand curves, implying that their consumers are price sensitive and less apt to buy wines as the price per bottle increases.” This suggests that casual restaurants will make more money if they offer lower-cost wines (because they’ll sell more). However, the study also found that “no statistically significant evidence of a downward sloping demand curve was observed for fine-dining restaurants, which suggests that offering more low-cost wines would not increase their wine sales.”
But the study did not deal with the effect that the recession is having on fine-dining restaurants, which by every anecdotal account are suffering more than their casual-dining cousins. So it’s very hard for me to believe that fine-dining restaurants are not having to lower prices and resort to other means, in order to keep customers coming. Evidence? Check out this link which is on Masa’s website. (Masa’s is one of San Francisco’s toniest restaurants.) Reprinted from 7X7 Magazine, it quotes the sommelier at Waterbar (another top restaurant): “People are not ordering that second bottle. We’re seeing more corkage, and people are going straight for the value-driven wines.” Alan Murray at Masa’s, Rajat Parr at Michael Mina, Matthew Fitch at Coi and other sommeliers are pitching more affordable alternative wines to traditional icons (e.g., Wolf Family 2004 Cabernet for $160 instead of Bryant Family for $700). This is glaring evidence that even the highest of high-end restaurants are having to substitute reality for dreams.
We’re all wondering what the permanent effects of the recession will be on the wine industry and all its moving parts. I’m hoping that one residual impact will be that restaurants have more user-friendly wine pricing policies. I know they’ll complain, but I think that a restaurant that has an inexpensive, interesting wine list (as well as good food) will be stronger than one that’s equal in every respect, except that its wines are expensive.
Against this backdrop, it’s not surprising that fast-food restaurants increasingly are selling wine. Americans have lost a ton of money during the last year, trillions of dollars by all accounts. The U.S. is much poorer than it used to be. Just how much poorer remains to be seen, but this is simply not the same, self-satisfied country it was at the start of 2008. I think people will be looking for bargains and spending less money for a long, long time. Restaurants are going to have to factor that into all their equations, including wine lists, and so are the wineries that sell to them.
Restaurants struggle in uncertain times
I wouldn’t want to have a restaurant these days. Times are tough for them. Everywhere, I hear anecdotes about the hoops they’re jumping through to try to stay open — if they do stay open.
The other day I got approached by the P.R. people for The Fifth Floor, the ultra-chic San Francisco restaurant you used to have to wait forever to get reservations for. They’re now selling something called “Sommelier for a Day.” For $250 per, you get to “shadow” their Master Sommelier, Emily Wines, learning the ropes alongside her, working the dining room floor, and then, afterward, have dinner with Emily, with wines she herself chooses. (I’m not putting this down at all, and may even do it myself. It’s a great idea and sounds like a lot of fun.) I’m pointing it out to show the lengths to which restaurants are going, in order to increase revenues, get publicity, or otherwise keep things going until this economy turns around.
Then, right after I got off the phone with The Fifth Floor’s P.R. person, I came across this article from the Associated Press about a Washington State restaurant, in the heart of Walla Walla’s wine country, whose owner decided to close its doors the very same day that Gourmet Magazine gave him a glowing review. “The recession just squeezed us so much we couldn’t do it, and we had a huge space for that type of restaurant,” the owner said, in words being echoed everywhere. He added, “It’s probably going to take us two years to recover. Financially and emotionally, it devastated us.”
It’s not just here in the U.S. that upscale restaurants are closing. “Many of the best restaurants in France are being forced to tighten their belts and lower prices as recession eats into their profits,” the BBC reported yesterday.
One tactic more and more restaurants are turning to is to allow, or ease up on, their BYOB policies. A P.R. person (not the same one who called me about The Fifth Floor) recently pitched a story to me about how “more restaurants are allowing BYO. My understanding is that it’s…now becoming more welcome (to allow BYO wine).” [I’m quoting from her email to me.] A firm she told me about, goBYO.com, “surveyed more than 50,000 restaurants in the 10 major markets, and of those more than 15,000 allow BYO Wine.” She called this trend “another sales angle…for restaurants seeking methods to spark business during tough economic times.” (You might check out the goBYO website. It’s pretty cool.)
Here in Oakland, some longtime favorites, like JoJo’s, closed their doors, and in San Francisco, in March alone, “two neighborhood Thai spots, a vodka bar offering over a hundred different vodkas on Belden Place, a relatively short-lived Hawaiian place in a Japantown mall, and Bong Su, a glamorous upscale Vietnamese restaurant,” all closed, according to the SF Weekly.com. I went to Bong Su’s glamorous opening a few years ago, when times were flush, and it looked to be a keeper, in its fancy new South of Market digs. But it wasn’t…
In New York City, New York magazine recently ran an interview with a guy named Steve Kamali, a restaurant broker. The headline: “Why Three-Star Dining Is Dead.” The article said “Close to 100 substantial restaurants have already closed in 2009” in The Big Apple. Kamali said, “I do think that we’re going to continue to see closures all across the country, not just in New York.” One of the shuttered N.Y. eateries, Fleur de Sel, was Michelin-starred. It had a 55-page wine list and offered a three-course prix-fixe for $76. The online business management journal, bnet, wrote that, as bad as things are for U.S. restaurants, “it’s even worse in California and Florida,” and not just for fancy places. “The 707-unit smoothie chain Jamba Juice, based in Emeryville, Calif., recently outlined struggles in its core market of California,” bnet reported.
Bad news for foodies, but maybe the silver lining is that those places that do stay open will be more affordable and offer better deals.
Mea culpa: I have since found out that Fifth Floor has offered the Sommelier for a Day program since 2005.
California bubbly and Champagne: not the same
I might have argued, until recently, that the best California sparkling wines are equal to the best French Champagne, until Sabawun Kakar, the wine director at San Francisco’s Bubble Lounge, was kind enough to host me through a tasting of 18 French bubblies.
After all, I’ve reviewed California beauties from Schramsberg, Iron Horse, J, Roederer Estate and Gloria Ferrer — mostly bruts — and been dazzled by their authority and finesse. Last year, I gave 97 points to an Iron Horse non-vintage Joy! from magnum that was so good it made me cry. So why wouldn’t I believe California had finally achieved parity with Champagne?
Well, because I’ve been so busy over the years that I didn’t have the chance to pay proper attention to Champagne. Sabawun fixed all that, and opened my eyes to the enormous breadth and complexity of the wines of this ancient region — a breadth that California hasn’t been able to mimic.

We tasted mainly “grower-producers,” small family grapegrowers who produce their own wines, rather than sell exclusively to the big “Grande Marque” Champagne houses, like Veuve Cliquot and Taittinger. (Alder Yarrow wrote interestingly on grower-producers a few years ago, at Vinography.) The wine importer, Terry Theise, is largely credited with introducing Americans to these small producers, and he imported some of the “family fizzes” we tasted at Bubble Lounge.
My favorites were Fleury NV Carte Rouge, Andre Jacquart NV Grand Cru Blanc de Blancs, an exotic Michel Loriot NV Blanc de Noirs made entirely from Pinot Meunier, an Henri Billiot NV Brut Rosé (which Sabawun insisted we drink from a wine glass instead of a flute) and a mind-blowingly good Henri Goutorbe 2000 Cuvée Special Club that had us doing handstands. But of more interest from an intellectual point of view is why these grower-producer Champagnes blew away the Bollingers, Delamottes and Pol Rogers we also tasted.
The question concerns single vineyards versus blends, always an interesting topic whether you’re talking about sparkling wine, Pinot Noir, Cabernet Sauvignon or just about any other noble wine. The Champagnes of the big houses tend to be blends, often from scores of vineyards whose grapes are owned by independent growers who then sell them, whereas the wines from the grower-producers are their own. My thinking has gone round and round over the years about whether the best wines necessarily come from single vineyards. The idea is romantic, but the downside of a single vineyard is that you’re restricted to whatever Nature and the Vintage give you. If the wine has divots any particular year, you have to live with them; you can’t buy fruit to make up for something the wine lacks. Of course, the upside of a single-vineyard wine, as the most involved connoisseurs appreciate, is to experience a truly terroir-driven wine.
It was terroir that we tasted from the grower-producers, and it was exciting. In California, we have nothing to rival the diversity of these smaller-production wines, and we’re not likely to, given the fact that sparkling wine consumption in this country is more or less stagnant, and the number of producers — you can count the good ones on both hands — has been steady. Given the hardship of the American market, sparkling wine producers are not likely to tinker with adventurous new blends or styles; they tend to stick with their tried-and-true bruts.
(By the way, for snacks we had take-out from the little tapas restaurant, Bocadillos, next door. Our mutual friend, the P.R. pro Kimberly Charles, set down the roasted potatoes and mini-sandwiches in paper boxes, and we ate them with plastic stemware; but such is the nature of Champagne that it turned into a 4-star meal.)
I’ve gone to Bubble Lounge on and off since it opened 11 years ago, and it truly has become a San Francisco icon. Sabawun told me business has been a little more difficult this year, but an eclectic mix of older business people and Millennials still fills the sofa’ed room most nights, willingly dropping 50 bucks on a couple glasses. The lounge is in North Beach, right where Chinatown, the Financial District and the design district along Sansome Street converge, and on the window of an antique store I saw the following words, which seem to say something about all great art, including wine:
An interesting plainness is the most difficult and precious thing to achieve. — Mies van der Rohe
P.S. If you go to Wine Enthusiast’s Toast of the Town-San Francisco on March 26, look me up.
P.P.S. Don’t miss my blog tomorrow, when I’ll debut my new Wine World TV video, with my friend Wilfred Wong.
COPIA never made much sense
I know we’re still in the grieving stage of COPIA’s recent demise, when you’re supposed to remember all the good things about the late, great dearly departed. But really, can we talk? The truth is, COPIA was a drag from day one.
As a tourist attraction it just didn’t cut it. Think of some of the cultural institutions that have opened around here over the years that have truly been successes: The new DeYoung Museum. The new Academy of Sciences in Golden Gate Park. The new Asian Art Museum and Main Library, in Civic Center. The Contemporary Jewish Museum. San Francisco MOMA. All of these opened to great fanfare, and have done stellar business ever since, because they delivered — no, over-delivered on their promises.
COPIA didn’t deliver.
Granted, COPIA wasn’t in San Francisco, but even if it had been, I don’t think it would have thrived. The problem was that it just wasn’t interesting or exciting. As an art museum, it basically sucked. There’s nothing worse than an art museum that displays bad art. Every time I went to COPIA — maybe 15 times in all — I was amazed at the feeble quality of the exhibits that passed as “art.” Other places in Napa Valley, such as Clos Pegase and the Hess Collection, had great works. COPIA didn’t. I always had the feeling they tried so hard to be avant garde, they forgot that contemporary art actually has to be good.
Then there was the wine education stuff. I never could figure out why tourists would go to COPIA for a wine experience rather than to the actual wineries in Napa Valley. I guess the tourists couldn’t figure it out either, which is why not enough of them went to COPIA to keep it alive.
Julia’s Kitchen was okay, although it never achieved the critical renown of restaurants in Yountville and further upvalley. Nor was COPIA attractively or conveniently sited. It was built on the “wrong” side of the Napa River, in a humdrum area that’s only now beginning to come alive. Moreover, COPIA was notoriously difficult to get to for years, while the roads and bridges were being worked on and that whole part of town was detours and closures. I bet a whole lot of tourists got fed up with that.
In the end, a cultural destination needs to generate word of mouth, and no one I ever knew who went to COPIA was excited enough by the experience to either go back, or to tell their friends to go. COPIA wasn’t a bad place; it was just kind of boring. When you think about it, the only reason it did as well as it did was because we loved and respected Robert Mondavi and Julia Child, and wanted their vision for an American Center for Wine, Food and the Arts to thrive. It didn’t, and I’m glad that neither of them was around to see their baby fold.
COPIA R.I.P.
P.S. Tom Wark, at Fermentation, this morning included this blog among his 5 Most Intriguing New Wine Blogs of 2008. I am humbled and grateful.


