Chapter 6: Reaching the End Consumer within a Free Market – Hospitality Sector Flashcards
key sub-sectors of the hospitality sector
bars and restaurants (which may overlap as new concepts appear).
The average price of a bottle of wine sold in the hospitality sector vs retail sector
The average price of a bottle of wine sold in the hospitality sector is often considerably higher than in the retail sector. Returning to the example of the UK, whereas hospitality sales account for only 20 per cent of wine sales by volume, they represent nearly 40 per cent of wine sales by value.[1]
Bars
Styles of bars differ greatly between, and even within, different countries. From a wine perspective, there are two main types: specialist wine bars and general.
Specialist Wine Bars: What are they?
These bars specialise in selling wine (although they may sell other alcoholic and non-alcoholic drinks). They are usually independently owned, individual wine bars or form part of a small chain. In many ways, they are very similar to specialist wine retailers – in fact, there are an increasing number of outlets that sell wine both for consumption on and off the premises (see Hybrids).
Specialist Wine Bars: Benefits to consumers & producers
Like specialist wine retailers, these bars tend to have knowledgeable, well-trained staff who can hand-sell wine to customers.
They usually seek out wines from smaller producers, often from less well-known wine regions and less common grape varieties, aiming at ‘high involvement’ consumers who are willing to pay above average prices for very good and outstanding quality wines.
Specialist bars, are, therefore, an ideal route to market for such producers. As with specialist wine retailers, some of these bars focus on particular countries or styles of wine.
For example, in Paris, bars specialising in natural wine are currently very popular.
Specialist Wine Bars: Food
Many specialist wine bars also offer food and choose some of their range specifically to match with that food. The food offering can range from artisan cheese and charcuterie platters to full three-course meals, and can reach the standard of fine dining restaurants.
Specialist Wine Bars: How they stock wine
Some bars specialise in having a small, regularly-changing selection of wine, whereas others have a wide range of wines at different price points – including, in some cases, super- premium hard-to-find wines.
These specialist bars do not usually offer big-name wine brands (except perhaps when it comes to sparkling and fortified wines) because they cannot compete on price with the larger bar chains, which have stronger purchasing power. They tend therefore to stock wines from smaller producers.
Specialist Wine Bars: Larger Chains
There are some larger chains of wine bars (e.g. Davy’s in the UK) that sell sufficiently large volumes of their most popular wines to have their own-label wines. These are usually high- quality wines and would be a good option for a medium-sized producer. Other chains of wine bars have specialised in wine bars in airport lounges (e.g. Vino Volo in the USA and Canada).
General Bars: What are they?
These bars have less of a wine focus, with wine being just one – and usually not the most important – of the drinks on offer. The range of wines available would be very limited, usually produced by the major companies and from well-known regions and grape varieties.
They tend to be inexpensive or mid-priced wines, chosen to appeal to a wide range of people and could be drunk with or without food.
In wine-producing countries, these are likely to be dominated by local wines.
General Bars: Price comparisons
In some cases, these are the same wines as those available through retail outlets. However, with the bar’s mark-up, these cost considerably more than in shops and so, to avoid consumers making direct price comparisons, some producers make brands that are sold only to the hospitality sector.
General Bars: Themes
Some bars have a specific theme (e.g. American sports bars, Irish bars or British pubs), which will influence the range of drinks on offer. For example, Irish-themed bars throughout the world tend to promote the beer Guinness, with wine having much less prominence.
Restaurants: Categories
There are many different types of restaurant. A reasonable way to categorise them would be: non-destination, casual and fine dining.
Restaurants: non-destiation restaurants
As the name suggests, someone eating at a ‘non-destination’ restaurant is not making the meal the main focus of their lunchtime or evening. Many non-destination restaurants are part of chains, although some are independently owned.
In general, the wines on offer need to appeal to a wide range of consumers and so will tend to be from well-known regions and grape varieties. They are likely to be inexpensive or mid-priced. In wine-producing countries, the range will often be dominated by local wines.
Many non-destination restaurants have a country-based theme (e.g. Italian, Spanish or Lebanese), in which case the wines would tend to be heavily drawn from the relevant country.
Restaurants: Casual Dining
This category falls between non-destination and fine dining restaurants. They can be used in a variety of situations: from quick meals (as with non-destination restaurants) to longer meals (like fine dining restaurants). These restaurants tend to be independently owned, often being individual businesses or part of a small chain.
Restaurants: Casual Dining Offerings
Casual dining offers a high quality of food and wine but without the formality of ‘fine dining’. The wines offered in such restaurants will be more in the mid-priced to premium price than those in a non-destination restaurant. The wines will have been chosen with food and wine pairing in mind, the wine list or menu often including suggested pairings.
The wine list will often offer a mixture of wines from better-known regions and varieties and less well-known ones. Staff will be trained to advise customers on which wine might suit their particular taste, price range or food choices.
