Wine Promotions in Restaurants: Do Beverage Sales Contribute or Cannibalize?
Wansink, Brian, Cordúa y Cruz, Ed Blair, Collin Payne, and Stephanie Geiger Oneto (2006). Wine Promotions in Restaurants: Do Beverage Sales Contribute or Cannibalize? Cornell Hotel and Restaurant Administrative Quarterly, 47(4) 327–36. doi: 10.1177/001088040629465
There are many health benefits associated with drinking a glass of wine, yet restaurant wine sales significantly lag those of other alcoholic beverages. One reason for this discrepancy is that ordering wine can be financially and socially disappointing due to the number of varieties, vineyards, countries and years available, whereas beer and spirits have production, control, and brand familiarity with consumers.
There are three ways through which restaurateurs can reduce the uncertainty associated with ordering wine: by suggesting a certain wine or a food–wine pairing or by offering a low–cost tasting flight. We designed three wine promotions and implemented them in a 10–week field study in two casual neighborhood restaurants in Houston, Texas. Each promotion was introduced independently of the others in table tents located at each restaurant. Data analysis revealed that promoting wines in a table tent is effective at increasing sales, but that promoting more wines at once time increased wines sales of the promoted wines even more. Analysis also revealed that offering food–wine pairings is very effective, as they generated a 44.5% increase in sales of the target wines as well as a 21% increase in total restaurant sales. Offering a taste of one wine to customers increased sales of that wine by 18.2% and offering a flight of five wines increased sales of those wines by 47.3%. While providing a number of options in tastings or food–wine pairings can increase beverage sales, providing too many wine promotions at once can overwhelm consumers and negate this effect. Additionally, we found that 78% of the sales from promoted wines came from consumers who would have ordinarily ordered wine. Thus, to increase sales on promoted wines restaurateurs should be sure to use high–margin wines, promote wines that are mid–priced and above, and avoid margin–cutting price promotions.
Download a pre-print version of this article here.