Wine financials - you do the math!

In my last blog post, I talk about the mark-ups that restaurants place on wine.  I do not begrudge a restaurant making a profit on wine or other alcohol as it is often the difference between a restaurant succeeding or being forced to close their doors.  But the restaurant needs to fair and competitive.  Most restauranteurs tell me a typical wine list price should be about 220% - 250% the price of what you can buy the bottle for retail.  And I am comfortable with this.  But as I mentioned, I will not frequent restaurants that charge over 350% of the typical retail price per bottle.

Wine Math

Here are a few other tips on what to pay for wine and how to use wine with the right financial outcomes.


Buying very expensive wine

In general don't!  During my life, I expect that I have purchased over 5,000 bottles of wine.  I have never paid more than $1,000 per bottle.  In fact, only twice have I paid between $500 - $1,000 per bottle and that was for (1) a 1971 Penfolds Grange, and (2) a full bottle of a 1971 Chateau D'Yquem - both birth year wines for my wife's 40th birthday party.

I have spent over $200 per bottle about 40 times, including the two bottles mentioned above, another 8 or so Grange, a dozen 2005 Bordeaux's, some excellent Montrachets, and a few special bottles of Napa Valley wines.  And every other bottle of wine I have purchased has been less than $100.  Therefore, I have spent more than $100 per bottle for less than 1% of the wine I have purchased.

There are excellent bottles of wine well under $50 per bottle.  I have had some truly outstanding wines for $10 - $20 per bottle.  And most people cannot tell the difference or in fact, actually like more the cheaper wines because they are more open and ready to drink, and the taste is something they are more used to.  Be hesitant to spend over $30 - $40 per bottle unless you really know your wines.


Doing BYO (Bring Your Own)

I love BYO and you save a fortune!  I have often brought great wine for a special occasion in a restaurant and saved thousands of dollars.  Plus I can pick out exactly what wines I want from my cellar.  For some of my birthday functions I have brought between $500 - $800 worth of wine and buying the equivalent wine in the restaurant would have cost me $2,500 - $3,500.  That is a great savings!

Expect to pay up to $25 per bottle or $25 per head for corkage.  While this may add $150 to the cost of the meal, it is still far cheaper than spending $3,000 for the wine!  The corkage fee is very reasonable and includes them decanting the wine, pouring it for you, replacing and using their best glassware, and clearing and cleaning the glassware.  I usually also bring a nice bottle along to gift the sommelier or owner also to let them know I appreciate being able to BYO.

Many restaurants, including Tetsuya's allow you to do this.  Or just ask and many restaurants will be glad to provide this service for you even if it is not listed as a service.  BYO means a bill for a great night out that would be half of what it otherwise would be and most restaurants are glad to just have your food business.


Buy aged wine instead of current vintages

There is a glut of wine on the market - more people are selling than buying.  Therefore, aged (and ready to drink) wines can be had for about the same cost as current vintages.  Why spend $500 for a bottle of current vintage Grange when you can get the 1981 or the 1985 for the same price or just a little more.  You would need to cellar the 2007 Grange for at least 20 years, while you could drink the 1981 or 1985 immediately!

Cellaring a bottle of wine usually cost between $2 - $3 annually.  Therefore, if you need to cellar a bottle for ten years, it will cost you $20 - $30 per bottle in addition to what you paid for it!  There is so much aged wine available that it does not make sense to buy a current vintage when you can get an aged and ready to drink bottle for the same amount or even cheaper than the current vintage.  Someone else has paid for the storage and care and you do not have to!  Nor do you have to wait a decade or more to drink it!

If you can get a great bottle of vintage wine for less than 25% more than the current vintage, you are getting a steal.


Cooking with wine

My wife makes a great beef stroganoff.  She also makes great risotto and a few other dishes that require 100 ml of white wine.  With the beef stroganoff, we often have an aged Chadonnay like a Montrachet.  A year ago, we had the bottle open and were enjoying a glass of $150 Montrachet while cooking, and indiscriminately used 100 ml of the Montrachet as part of our beef stroganoff recipe.  It was decadent and delicious, but certainly did not materially make the beef stroganoff any better.  It also meant I had one less small glass of a great wine to drink!  It also added $20 to the cost of our tray of beef stroganoff!

When we made beef stroganoff last weekend, we drank the same bottle of wine, but I opened a bottle of 2005 Kelman Semillon to be used for cooking.  This is a nice wine which I got for free as a land-owner in their cooperative vineyard.  The bottle is worth $18 at the cellar door, and therefore only added about $2.40 to the cost of the beef stroganoff.

An open bottle of wine will only last a few days for drinking purposes, but will last several weeks if you are using it for cooking.  Therefore, we try to make several meals over a few weeks which require wine as part of the recipe and open a cheaper bottle of wine for the cooking.  And the 2005 Kelman Semillon is a very good wine for the money and I am now enjoying a glass while writing this blog!  Using an $18 bottle of wine for several meals and several glasses in between is a far better approach than using 100 ml of $150 bottle of wine for cooking!

We also keep about a dozen bottles of both white and red wine we know is no longer good for drinking but can still be used as a marinate or for cooking as need be.  The last few batches of Coq au vin we made used a 1989 Lindemans St George Cabernet Sauvignon for marinating!  While past due for drinking, it was still great as a marinate.


Hopefully this 'wine math' made sense and was useful and helps you get far better drinking mileage out of your wine buying and consumption.  Enjoy!


Steve Shipley

Twitter: @shipleyaust
My other blog (on business, tech, world issues):  Steve Shouts Out!

deVine is divine for food and wine!

I have only referred to a few restaurants in SAZ in the Cellar.  While I am willing and even excited to try new places, I feel most comfortable going to where I know I will get great food, great wine and great service.  In that regard, I go to Fish on the Rocks (29 Kent Street, Millers Point) quite a bit because they have great food and I can ensure I am having great wine because they are a BYO (Bring Your Own wine).  They are also licensed for wine and beer, but there is nothing more satisfying and fool-proof than taking wine from your own cellar!

I have also raved about Jay Huxley's cooking and Jay has just opened (on Thursday, 28 February) a new restaurant at 108 Pacific Highway in Roseville.  Hux's Dining is also a BYO and licensed.  And The Cut Bar and Grill (16 Argyle Street in The Rocks) is my favorite steakhouse and meets all the criteria.  They have a great and good-valued wine list along with great food and service and while they are not a BYO, if I asked ahead (and because I bring a lot of food business to them), they will let me do a BYO for special occasions.  I don't take advantage of this, but really appreciate that they provide me the option when I want to do a truly special dinner with special wines.

I hate and avoid restaurants which have over a 300% (and sometimes far north of 500%!) mark-up on wine over what I can buy it for retail or from the cellar door.  As nice as the food and view is from Cafe Sydney on top of Customs House and overlooking Circular Quay, I only go there at the insistence of foreign friends who marvel at the view.  A number of their wines cost two to three times what the same wine at Lord Nelson Restaurant in Millers Point does.  And I was at The Malaya at Kings Wharf a few weeks ago and they were charging $50 for a bottle of wine I paid $8 for retail!

I simply will not go to restaurants that screw you on the wine and those restaurants have lost all of my business over the last decade.  I don't care if it is for business or personally, I want good value and refuse to do business with businesses that do not provide good ongoing value.  Restaurants I will frequent include Fish on the Rocks, The Cut Bar and Grill, Hux's Dining, and Lord Nelson for four of my favorite outings around Sydney.

A typical guideline is that a restauranter should charge about 220% of what they paid for the wine to cover the cost, labor of serving and cleaning glasses, breakage, the 'insurance' risk of have a corked bottle, etc.  And I am comfortable with that.  I am glad to pay up to 250% of the price I could have bought the wine for at retail.  But I simply will not frequent or pay for wine that is over a 300% mark-up.

One of my very favorite restaurants is deVine at 30 Market Street (corner of Market Street and Clarence Street) in Sydney.  This is a magnificent restaurant, with the lowest mark-up I have ever found on wine.  I rarely pay 50% more for a bottle at deVine than I do retail.  And the service is magnificent, being both friendly and attentive.  There is always one, if not both owners, Terence and Andre, on the premises to take care of you.

Their wine knowledge is superb.  (I also value sommeliers like Terence and Andre at deVine and Gustavo at The Cut Bar and Grill who know far more about wine than I do.  Surprisingly, the 'wine person at most restaurants does not.)   And they have a wide range of domestic and foreign wines to choose from.  In addition to a great and often changing wine list, the owners at deVine have a collection of private wines from their own cellar and for the right occasion, they may recommend trying one of those.  I have never been disappointed (in fact - quite the opposite - I have been greatly pleased) with each and every time this has occurred, and I don't remember ever paying more than $100 for a rare and truly great find!  Again, I am not sure they would do this for anyone, but once they quickly understood my interest and appreciation of good wine, it just became part of their superb service proposition!

The location, ambiance, service, quality, value and just about everything else is divine at deVine.  Make sure to try them out if you have not already.

When choosing a restaurant, I look for the following things:

• great food
• diverse wine list
• average wine mark-up no larger than 250%
• great service
• ability (if I prove to be a good customer) to do BYO and pay corkage (usually about $10 - $25 per bottle is reasonable at a good restaurant and for a very good bottle of wine this is a steal!)
• occasional food or wine choice 'not on the menu'
• ownership or senior operational management is on the premises
• location helps if it is spur of the moment or I am pressed for time

The restaurants I have featured here meet those criteria.  Make sure to frequent them, and avoid the ones that are more interested in their profit than your experience and pleasure, regardless of how iconic they may be!


Steve Shipley

Twitter: @shipleyaust
My other blog (on business, tech, world issues):  Steve Shouts Out!

My losing article in wine writing competition

Late last year, I decided to enter the Gourmet Traveler (GT) Wine magazine wine writing competition.  I was originally quite excited about it, but spent far less time to get an article out than I had planned.  My work commitments were high and most of my creative energy was going in that direction.  I knew the article could be improved and in the final week before the deadline, I was undecided about entering or not (as I knew I would not have the time or energy to improved the article furhter or write another one).  However, I felt if I did not enter, there was no way I could win, so I forwarded my submission.  Yesterday, I was informed the award was given to another.

Even had I been extremely pleased with my submission, I felt there was only a limited chance of winning.  Many previous winners have been sommeliers, wine makers, vingerons, etc. and I was an immature wine enthusiast!  Yet, my article did match most, if not all, of the characteristics they asked each writer to aspire to.  It was useful to go through the experience.

My losing article still provides some good advice about purchasing wine and I think you will find it interesting, even though it has not been judged to be of magazine quality.  Here it is and I hope you enjoy!

Buy – don’t be sold – your wine

We love convenience, especially as the pace of life seems to be speeding up.  We eat meals out so as not to have to cook them ourselves, or even shop for the ingredients to prepare them.  We have people clean for us, do our laundry, and some will shop at Aldi because they trust the premise that Aldi has made high quality, good-valued product choices for us, so we do not have to take the time to research or make those choices ourselves – just pick up bread, milk, chocolate, and even wine without regard to brand.

That convenience has extended to our buying of wine.  Winery loyalty programs tell us “not to worry mate”, just sign up and we will send you your wine of choice every year, regardless if it is a good vintage or not.  Or even easier, we will send you a mixed six-pack every six months.  You can stop by Wine Selector in Australian domestic airports, sample several, and if you like these wines, then trust them to send you wines in the future at price points they believe deliver good value to you.  Because many of us are unsure or intimidated in our wine knowledge, we let and even appreciate the wine sellers selling us what they think is best for us.

Buyers and sellers of wine have different purposes, which can be at odds with each other.  As buyers, we want to get great wine at a great price, have wine we can drink right away or lay down until the wine is more optimally drinkable.  Sellers of wine need to clear inventory and create cash flow every year.  Each vintage, they try to produce the best wine they can and be able to sell it at a price buyers can afford, but more often than not, this proves difficult due to challenging climatic or market conditions.

I have bought a lot of wine over the years and in review, have realized I have been suckered into buying decent wine which I was convinced by the cellar door manager was great wine at a great price.  But now that I have been able to taste and compare more wines, I have come to realize that wine varies greatly in quality vintage to vintage, vineyard to vineyard and wine maker to wine maker, but varies little in price.  For example, the 1996 and 1998 Coonawarra Cabernet Sauvignons are far better than 1997 Coonawarra Cabernet Sauvignons, yet the price upon release was about the same for most brands.

I have rarely purchased wine without tasting it first.  Through experience, I have come to know what I like in a wine.  But even if I have not tasted a wine, I can feel reasonably sure I am buying great wines at a great price, if I look at three features of a wine that make it better (or worse) valued than other wines:

• Vintage (year the grapes were grown  
• Where the grapes were sourced (often called terroir, or at least a component of terroir)
•  The wine maker (not the brand, but the actual individual) 

Yes, it may be easier to let the wineries or distributors ‘sell’ you, but they are often pushing what wines are in inventory, regardless of vintage, and touting the brand, not the wine maker.  By combining a bit of knowledge regarding vintages, the source of grapes and who the wine maker is, you can consistently buy great wine at a great price. 

Steve Shipley

Twitter: @shipleyaust
My other blog (on business, tech, world issues):  Steve Shouts Out!

Do you suffer from palate fatigue?

Is is possible to have ruined your palate and not be able to discern the taste and quality of the wines you are tasting?  The answer is a resounding, "Yes."

Several years ago, we spent ten straight days at The Hunter Valley and we tasted a lot of wine.  I was quite enamored by the 2007 Hunter Valley Shiraz' (and I still am) and we tasted a lot of them, in addition to expanding our search for some more aged Semillons and some good Australian Verdelhos.  We were relentless in our pursuit.

However, by Day 7 onwards, I really was not liking much of what I was drinking, and thought some of the wines were down-right tainted.  The combination of sampling wines every morning and afternoon and having wine with all dinners and most lunches, I had simply overloaded and ruined my palate!  We may have sampled over 300 wines during that trip!

It was only two to four months later that when trying some of the same wines, that I realized how great a few of them I thought tainted were.  In particular, I had passed over the 2006 Seppelts St Peters Shiraz (not all wines we were tasting were Hunter Valley Shiraz BTW!) as not being suitable, but when I tasted it again several months later, I realized how spectacular a wine this is.  I could not believe this and several other wines I had rated as insufferable only a few months earlier.

Not that I need to worry about this, but people who exercise regularly find they still need to take at least a day off every week to allow their muscles to recover and build.  And the same is true with wine tasting.  During our ten day trip to the Hunter, I had accumulated so much tannin on the inside of my cheeks and had saturated my palate so thoroughly that I could not discern readily one taste from another.  My palate had been ruined from excessive tasting.  Fortunately, it came right once again.

I drink a glass or two of wine almost daily.  I love drinking wine for several reasons, including that I love the taste, I love the experience of drinking a good glass of wine with a good meal and sharing a glass with friends, and I also find it lifts my spirits and attitude and helps me think, write and do other mental and emotional activities better.  But if I do not take a break of a day or two every now and then, I get to the point where I notice my palate is not working at 100%.  And this will diminish your wine tasting experience.

This is a rare situation where I am writing this blog without having a glass of wine to inspire me!  And I am planning to be wine-free for a couple more days.  By doing this over the last few weeks, I have noticed my palate is functioning better and I have been able to discern far better the characteristics and quality of the wines I have been drinking.  Last night, I attended a members dinner for one of the wineries in The Hunter Valley.  They had 55 wines to sample, but I only tried about a dozen.  By not having any wine the day before and by limiting my selection, I was able to better taste and appreciate the differences and quality of each of the wines I sampled, and was far more confident in my selections (I actually did not buy any, but was confident in my assessment in passing in on them.)

Wine judges have the (enviable!) task of having to judge many wines in a given session.  However, even with spitting out all the wine, they still can suffer palate fatigue which is why they don't judge more than a maximum of 60 - 80 wines for session.  And they keep their palates in shape and prepare for each judging by ensuring their palate is in optimal shape.  (They also make sure no mint toothpaste, lipstick or other impediments curtail their ability to taste.)

I have found my wine drinking experiences have benefited from following a few rules:

• Take off a day or two per week from drinking any wine or other alcohol to rest and detox your palate
• Every month or two, take a break of at least three to five days without drinking anything (or limit it to a glass during that time if you feel the need to imbibe)
• If you are going to enjoy a great bottle or two of wine, make sure to not drink for a day or two beforehand, so your palate is in optimal shape to enjoy that truly great bottle
• If you are going to taste or drink four to five glasses or more in any day, mix it up by having some whites and some reds and of different grapes, and follow that with a day of not drinking

I never get drunk while drinking wine.  I drink wine in a controlled manner for the taste and enjoyment and to be able to share the experience with others.  Yet, I still control my approach to wine drinking to get the most out of the experience.  If you are suffering from palate fatigue, give it a rest for a day or two!


Steve Shipley
Twitter: @shipleyaust
My other blog (on business, tech, world issues):  Steve Shouts Out!

Is Australia a great wine producing nation or not?

Australia is justifiably proud of its wine producing industry and has gained attention and success on a global scale.  I love Australian wines.  They are built to last, and there are regions for growing grapes that rival European terrain, and the hills of Napa Valley.  Five years ago, I drank 95% Australian wine, with the other 5% being a smattering from Europe and the Americas.  I also used to drink 90% red, but now drink about 70% red and 30% white.  In a recent post on Rieslings, I mention how the Riesling grape helped me transition to more whites.

I have also noticed another change over the last decade, that being that I used to enjoy red wines when they were the biggest, most robust and alcoholic.  I now prefer - more often than not - a more refined, elegant red wine.  I am starting to appreciate red wine blends using more secondary grapes, and more red and white wines from Europe.

In general, it is probably fair to say that my wine tastes are maturing and becoming more diverse.  Part of this has been through the minor study of how grapes are grown, wine is made and wine reviews in general.  But most my education has come from drinking and comparing a wider variety of wine.  I have become much more discerning of the grape used and the impact of soil and vineyard management techniques on various grapes (most prominent influence is on Riesling and Pinot Noir, but all grapes are influenced by the soil and climate they are grown in).  The influence of soil and climate makes up a big part of what is called terroir.  But terroir also has less noticeable and scientifically proven influences through the culture of the area, its accumulated history, and the small influences collectively made over the vines and wine making techniques for thousands of years.  And this is where I am starting to question if Australia is one of the best wine producing regions or not.  While some vines are 150 years old and represent the place where the grapes are grown, Australia is more known for the tastes of the grapes themselves and the wine making techniques used.

I am reading Roger Scruton's book entitled I Drink Therefore I am: A Philosopher's Guide to Wine.  It is available in both electronic and printed form.  I am greatly enjoying the book, finding it not just a good and enjoyable read, but also quite educational on both wine and philosophy.  Scruton is a marvelously entertaining and articulate writer.  He is also very sure of his opinions and without a doubt, believes that French wines are without peer, followed by some wines from Napa Valley.  He is also a fan of Italian wines and supportive of Spanish and some South American wines.

But when he starts discussing Australian and New Zealand wines, he quickly downplays the impact of Australian wines and spends most of his time in the region praising New Zealand wines and wine making.  One of his major criticisms is that Australian wines do not reflect a place, they reflect the taste of the grape and the wine making techniques.  He is also critical of how quickly the wine growing and wine making industries have grown and the mass popularity of the wine having repudiated the individual variety that is necessary to make great wines.

Scruton believes that a sense of place is critical in making good wines and I think he is onto something.  You can mechanically churn out excellent wines if you use great grapes and great wine making techniques.  But think how much better wines are if the grapes come from vines that have been in the same location for thousands of years (vines never get that old, but the relationship being the soil and the vine types have existed for that long in many European locations).  The soil, the vine and the grape know how to embrace each other.  And think of the collective history and culture of the place where the grapes are grown.  Even if you have not visited those places, you have a sense of what they are about, and drinking wine from a place evokes memories and a sense of a deeper culture and appreciation of the wine.  And even if you are completely ignorant to a place, you still can taste the nuances of how the culture has defined the grapes and the wine making.

I have tasted some truly unique and excellent second growths or non-categorized wines from these European regions that have evoked great pleasure.  You do not need to buy Grand Cru wines from these regions to experience great wine.

I have tasted some excellent Australia wines and will continue to enjoy them for the rest of my wine drinking days.  They are great wines.  But the very best wines I have had come from France, Italy or Napa Valley.  Australia can be proud of its wine making industry and its wine heritage, but as a New World country that mass produces wines and has large vineyards of similar tasting grapes, you are unlikely to produce wines of the stratospheric quality that you would from a very small single vineyard parcel in Montrachet, Nuit St George, Mosel, Piedmont or Alsace.

In particular, I understand the nuances of some of the best vineyards in The Hunter Valley and can select some truly outstanding wines of unique character from that Australian wine region.  I am anxious to spend much more time in the other major regions to be able to do similar.  By being selective and narrowing my focus to a few wine makers with excellent small parcel vineyards and leveraging the cumulative history and culture of the region and the family of wine makers, I am hoping to be able to continue to buy Australian and get the very best wine it has on offer.

But is Australia in the Top 3 best wine making countries in the world - certainly not.  Is it in the Top 5?  Maybe and if not, it is getting closer.  The joy in all this is that I will continue on the journey of sampling many more Australian and foreign wines and also now have an excuse to sample both side-by-side, which is something I have not done much of before!


Steve Shipley
Twitter: @shipleyaust
My other blog (on business, tech, world issues):  Steve Shouts Out!