Wine Promotions in Restaurants: Do Beverage Sales Contribute or Cannibalize?

Abstract

A controlled field study of wine promotions in a midpriced chain restaurant generated three key findings: (1) selected wine recommendations increased sales by 12 percent, (2) food-wine pairing recommendations increased sales by 7.6 percent, and (3) wine tastings increased sales by 48 percent. In general, 69 to 87 percent of the increase in sales of promoted wines come from diners who would likely have ordered a nonpromoted wine. This means that 13 to 31 percent of the increase come from diners who would have otherwise ordered liquor, beer, and nonalcoholic drinks. Specific implications for responsible restaurateurs are outlined, including the caveat to not cannibalize sales by promoting a lower-margin, lower-profit wine.

Keywords: wine sales, beverage sales, restaurants, recommendations, wine promotions, menu pairing, sampling