BYOB Restaurants Uncork Profit with Wine
When Kody Harris started making plans to open her casual Greek eatery in Phoenix, Arizona, it was a reflection of her grandparents’ Greek heritage and her love for the country’s cuisine, but the cost of the liquor license was a pivotal turning point in her future eatery’s narrative.
“I didn’t want to pay $15,000 as part of my opening costs,” she says of the restaurant she opened last fall. This is what led her to make Fresko Mediterranean Kitchen a bring-your-own wine, beer, and spirits eatery. She also chose to follow in the footsteps of restaurants in cities like Chicago, Philadelphia, and Montreal that allow customers to bring in their own wine and charge them nothing for the service.
With 30 years of experience being a chef, including cooking in the kitchens of Pacific Coast Restaurants (which operated 27 restaurants in the Pacific Northwest when it was sold in 2007 to Restaurants Unlimited), she’d long been familiar with the practice of charging diners a corkage fee—typically between $15 and $30 in fine-dining settings—if they brought in their own wine. Recognizing that Greek entrées like marinated lamb skewers, herb-seasoned beef, and pork meatballs practically command a wine pairing, she says, “I still wanted to find some way that I could have alcohol.”
What happened with her BYOB, no-fee-charged policy surprised even Harris. Despite not selling alcohol, she’s making good money. It’s mostly because diners, she says, are buying more food. They have more money in their pockets when they’re not springing for wine, at $8 to $10 a glass, or beer, or cocktails, and thus, she surmised, they tend to order more small plates. Two examples on her menu are dolmades, or grape leaves, and dips such as Baba Ganoush and Muhammara. “I’m actually selling more food,” Harris says. “People literally come here, sometimes, because they can bring their own wine or beer.”
Many of the customers are retirees, or snowbirds on fixed incomes, who still want to eat and drink with some luxury. “It is actually not a lower-end clientele moneywise, but it’s wine connoisseurs who make $60,000 or more a year,” says Harris. Will she spring for that liquor license this year or next? Probably not, says Harris, because the current BYOB policy has been successful.
On the other side of the states and in an affluent Florida setting, Jason Lakow, the general manager at Café Boulud Palm Beach, was also curious about what would happen if customers brought in their own wine. The restaurant, with its signature French focus and location inside the tony Brazilian Court Hotel, launched a BYOB program last summer that included wine. Designed to boost business during a slower season of the year, it was an immediate success. In fact, it was so much of a success that the restaurant extended the program through November. It proved an enticing offering for locals, who already knew that to save some cash they could come in from 5:30 p.m. to 7 p.m. for an “early bird” dinner special on Sunday through Thursday, when the three-course prix fixe menu is priced at $48.
While BYOB success stories abound, David Mitroff, founder of Piedmont Avenue Consulting, thinks a compromise between offering the BYOB option or not is crucial. “It’s a matter between appeasing customers’ satisfaction, while at the same time maximizing revenue for the restaurant, because alcohol has lower labor costs and is often the best marked-up product the restaurant can sell,” he says. At one of his clients, Library on Main in Walnut Creek, California, which opened during the summer of 2015, he notes, “We have experimented with BYOB wine on slower days and had a lot of success. The idea is that guests on ‘Wine Wednesdays’ can bring in their own wine without a corkage fee. BYOB-type programs can be great to get more restaurant guests into your restaurant on slower days.”
Similarly, 360 Bistro in Nashville, Tennessee, is also debunking the myth that customers can only sip wine from the in-house wine list. Like any other restaurant, the restaurant’s wine list is a source of pride, and one that didn’t pop up overnight. It’s the result of rigorous tastings and relationships with distributors, as well as selections tailored to the chef’s specialty dishes. And yet, because the fine-dining restaurant wants to cater to diners celebrating a special occasion, the restaurant has bent the policies over the years to accommodate guests who might wish to uncork a bottle of wine that has sentimental value for them, perhaps one scored during a trip to wine country or a bottle that’s been aged long enough to open on a milestone wedding anniversary. For this flexibility and personalization, a $25 corkage fee is charged to diners who bring in their own bottle of wine.
In many cases, this middle-of-the-road approach satisfies both the restaurant and the customer. It’s a solution that Erik Fritz, general manager of The County Bench Kitchen & Bar Restaurant in Santa Rosa, California, found especially appealing. With his location snug in wine country, with dozens of wineries located within a few miles, Fritz knew he wanted to attract both locals and tourists. His decision: Charge a $15 corkage fee, but that fee is waived under special circumstances. “If you buy a bottle of wine off our list and also bring in your own bottle, the corkage fee is waived,” Fritz explains. “It’s actually an opportunity for someone to bring in a special bottle of wine they’ve purchased, and bring it all together with a great meal.”
On the menu, guests find everything from sharable snacks like popcorn, house-made quinoa crackers, and crispy wrapped pork confit, to entrées like an 8-ounce Niman steak paired with potato purée and brown-butter cauliflower or—for a meat-free option—farro risotto with roasted pumpkin, chestnuts, and wilted chicories. The 250-selection wine list is heavy on Sonoma County picks, given its location, and there are 14 by-the-glass options. By the bottle, the price runs as high as $400 for a Grand Cru Chablis from René & Vincent Dauvissat.
Shortly after opening, Fritz couldn’t help but notice that—despite his efforts to set up a vast wine list—many customers were bringing in their own wines. So instead of fighting the concept, he embraced it, launching two specials that cater to this demographic. “Lots of people bring in local wines. We have a lot of winemakers in the area, and the winemakers will also bring in their own bottles,” says Fritz.
In February, Fritz created “no-corkage-fee” month, a seasonal expansion of the marketing outreach that had already designated a special on Tuesday nights where guests ordering the three-course prix fixe menu, priced $35, were entitled to free corkage of BYOB wines.