Restaurants, Wine, and Hospitalians w/ Richard Hanauer, Lettuce Entertain You

XChateau Wine Podcast

As the wine director and partner of the Lettuce Entertain You restaurant group, Richard Hanauer oversees ~100 restaurants' wine programs. Seeing beverage sales grow from single digits to ~20% of sales, Richard discusses the role beverage plays in restaurants, sommeliers, the elements of good wine programs, and his newest wine country themed concept, Oakville Grill & Cellar.

Detailed Show Notes:

Lettuce Entertain You ("LEY")

• ~100 restaurants in Chicago/IL, CA, NV, FL, TX, VA, DC
• Partitions of different culinary groups

Beverage impact on sales - can be 0% - 50% of sales

• Fine dining and wine sales used to have a positive correlation
• More casual concepts w/high-end beverage programs (e.g., luxury whiskey w/ casual BBQ)
• LEY - Wine was single digit of sales, now high teens-20% over the last 20 years
• The volume of sales driven through by the glass ("BTG") programs (e.g., RPM Seafood sells 4-5x Pinot Grigio vs. Sancerre, which is 2x the price)
• Wine program drives return visits vs. initial visits - people come back for the person who recommended the bottle

Definition of a good wine program

• Used to be verticals of great traditional producers
• Now, more about how the wine program fits into the restaurant (e.g., Piedmont wines w/ Piedmont food)
• Need good stemware; not great stemware
• Wines at the right temperature and match the menu

Role of the Sommelier

• Operations - wine binning/storage, ordering, tasting, building wine menus
• When not involved in wine, they should be "hospitalians," helping with everything else
• Best somms build relationships with wineries (get access to unique wines) and guests (getting them into the right bottle, not the most expensive -> brings customers back)
• Average fine dining ratios - 24 tables, 1 somm per 12 tables

Somm turnover

• Pre-Covid - average tenure 18 months
• Re-training takes 6-12 months
• LEY - tries to retain employees, treats them well w/ 401k, benefits, opportunities to grow career w/in LEY

Restaurant pricing

• Rent is the most significant expense -> increases COGS for everything, including wine
• Food/cocktail ingredients are blended together, but wine is not, making pricing a more significant issue
• Goal - keep COGS down while holding price (sometimes achieved through relationship w/ wineries)
• Try to get less available wines - have less price transparency
• Markups lower on higher-end wines - standard markups would make the wines unsellable

Oakville Grill & Cellar - opened April 2023

• CA wine area themed restaurant
• Napa inspiration - "Never pretentious, never formal…very comfortable, pleasurable, elevated service & quality of food, rarely decor"
• The entire wine program is from CA

Cellar Door - tasting studio w/in Oakville Grill

• 6 person suite
• Partners w/ different winery every month
• Re-creates the winery tasting list down to vintage and wine pricing
• Gets training from the winery
• Guests can sign up for winery, take home wine
• ~500 guests/month capacity (4 seatings/night, 5 days/week)
• Winery requirements: right pricing (not low or high), interesting tasting list, pedigree, make sense w/Chicago's seasonality, open to all of CA
• Also, BTG in Oakville Grill and usually on the wine list before and after

Trends for Restaurants

• Authenticity - e.g., Aglianico w/ Neapolitan pizza
• Wine getting more expensive -> The cost of building a cellar is higher, which leads to more focused wine lists

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