Wine Program Management Flashcards
What are the core responsibilities of a wine program manager?
Curating and pricing a profitable wine list, maintaining inventory, adhering to legal requirements, supervising vendor relationships, training staff, and ensuring excellent guest service.
Why must a restaurant’s wine program be profitable?
No business can survive without sustained profitability. A profitable wine program helps cover labor, overhead, inventory costs, glassware, and other operational expenses.
Define markup in wine pricing.
Markup is the percentage increase between cost and selling price. For instance, a 3× markup on a $10 bottle sold at $30 yields a 200% markup (not 300%).
How is cost of goods sold (COGS) calculated?
COGS = (Starting Inventory Value + Cost of Purchases) – Ending Inventory Value. It reflects the true cost of items sold, factoring in waste, breakage, errors, etc.
What is burdened COGS?
It includes direct COGS plus other relevant costs like labor, glassware, storage, and preservation systems, giving a fuller picture of profitability.
What is gross profit, and how is profit margin determined?
Gross profit is the revenue minus the cost of a sale. Profit margin (%) = (Gross Profit / Total Revenue) × 100. It measures how much of the sale price is profit, accounting for COGS.
Why do restaurants typically have high profit margins on wine?
Wine must cover overhead costs like glassware, washing/polishing, breakage, labor, and inventory. Margins are high to offset these expenses and other business risks.
What is the average cost percentage for wine in US restaurants?
On average, wine cost is about 36% of wine sales. Many programs aim for ~33% or lower to cover losses and maintain profitability.
Compare margin vs. gross profit with an example.
A $10 cost → $30 sale yields a 66.6% margin ($20 gross profit). A $30 cost → $70 sale yields a 57% margin but $40 gross profit. The second has a lower margin but higher gross profit.
Which documents help track wine program profitability?
1) Profit and Loss (P&L) statement for overall profitability over time, 2) Balance sheet for a snapshot of financial position, 3) General ledger for every transaction in a category.
What are “control states” in wine law?
US states where the government runs the wholesale or retail sale of alcohol. Producers must sell to the state, and retailers buy from the state. Some states have government-run stores.
Explain blue laws or dry counties.
Some US locales restrict or ban alcohol sales on Sundays or entirely (dry counties). These zones often have unique or extra steps to allow alcohol service.
Why is a liquor license crucial, and what are some challenges?
Restaurants/bars need a license to legally sell alcohol. Licensing requirements differ by location, class of alcohol, and can be costly and time-consuming to navigate.
What are tied-house laws designed to prevent?
They forbid producers/distributors from exerting undue influence on retailers (like owning them or offering illegal incentives). This stops monopoly-like relationships.
Define dram shop laws.
They regulate alcohol service responsibilities. Examples include rules forbidding service to intoxicated persons or restricting after-hours sales; violating them can risk fines or loss of license.
What is the three-tier system in US alcohol sales?
Post-Prohibition structure requiring producers to sell to distributors, who then sell to retailers (stores, bars/restaurants), each tier adding costs and margins.
What does FOB price mean in wine importing?
“Free on board” cost excludes shipping from the departure port. The importer pays for transport from that point. Often used interchangeably with ex-cellar for domestic wines.
How can shipping conditions affect wine quality?
Dry transport isn’t temperature-controlled, risking heat damage. Refrigerated containers cost more but protect wine from temperature extremes, essential for long hauls.
Why are strong supplier relationships important?
Reliable vendors with the right portfolios, good service, consistent supply, and helpful account managers streamline inventory, reduce issues, and support a profitable program.
What are best practices for vendor appointments and tastings?
Schedule them (preferably outside rush hours), be prepared, know your program’s goals, keep an open mind, and follow up promptly with feedback or orders.
Why must businesses abide by 30-day terms in many states?
Mandated by tied-house laws or ABC regulations. Vendors cannot legally extend terms beyond 30 days; missing payments stops deliveries.
How can a buyer manage purchasing costs effectively?
Buy from multiple suppliers, look for volume discounts, negotiate broken-case fees, track close-outs, and focus on wines that sell quickly and offer strong margins.
Why is verifying deliveries on arrival important?
It ensures the right products and correct vintage are received, with no damaged or substituted bottles. Mistakes should be caught immediately for returns or replacements.
What does variance in inventory indicate?
Differences between theoretical stock and actual physical inventory. Causes can include theft, over-pouring, unrecorded comps, or inventory miscounts.
