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Economic Downturn Transforms Wining and Dining Stateside

A view of the bar at New York restaurant SD26
© SD26 | A view of the bar at New York restaurant SD26
Sam Eichblatt reports from New York on restaurateurs' moves to keep their businesses thriving in cash-strapped times.

Four years after the watershed of 2008, the shadow of the global financial crisis still hangs over the United States restaurant trade. Expense accounts have shrunk – and so have plate sizes – as financial caution leads to a less-is-more approach. Meanwhile, young, digitally connected "millennials" are thirsting for interesting wines, obscure varietals and novel ways of drinking.

“If anything has changed in my business, it has been the consumer,” says New York restaurateur Tony May. “At one time, they came into the restaurant to learn from us what to eat and drink. Now they come in and they tell us what they want to eat and drink.”

May, who hails from Naples, Italy, was the general manager, then owner, of the Rainbow Room in New York’s Rockefeller Center between 1968 and 1986. He has since opened a string of critically acclaimed restaurants. His latest, SD26, is a high-end, modern-Italian eatery that acknowledges two major shifts in the dining landscape: firstly, that nutritional values have changed, and secondly, that contemporary eaters demand variety. “They want to eat less and drink less – but they want to drink better,” May says.

The increasing range of food and wine in the cash-strapped economy has also led to the small-plate phenomenon: “[People] don’t want a first and second course anymore – they want to have a little fun with their food.”

Similarly, May has instituted half-portions of his menu, to allow customers to sample more dishes. At the front of the restaurant, he's also installed a bar with a communal table that dispenses wine in one-, two- or five-ounce servings via Enomatic machines. These keep by-the-glass wine fresher, so there’s no risk of an opened bottle standing around long enough to oxidize. Guests receive a smart card, which is tallied up at the end of the evening.

The by-the-glass wine dispenser now in use at SD26
© SD26 | The by-the-glass wine dispenser now in use at SD26

To traditionalists, this might seem like anathema. May’s approach is consumer-focused, but has it worked? “The Enomatics are the first thing people see when they come in," he says. "Of my wine sales, the highest percentage is still the standard bar; people want to sit at the bar for a glass of wine. The second is the lounge, where they can order a bottle of wine. You don’t know how something will work until you try it – it’s Russian roulette.”

Successful or not, May’s willingness to experiment is a trait shared by many in New York, which is still the country’s early adopter and testing ground when it comes to new trends.

Bill Hayde, the senior vice-president and brand manager for importer and distributor Martin Scott Wines, says that these days it’s easier to get a table in top-end restaurants. “If you go at 8 p.m., it’s booked. At 6 p.m., it’s not."

Hayde reports that the average check is going down as well. "The economy got tough and businesses told their employees to reduce their expense accounts. But now – even if they can afford to spend more – companies have got used to smaller expenses, so they’re keeping it that way.”

As a result, restaurateurs are focusing more on their wine-by-the-glass programs. Prices have risen, but Hayde believes that restaurants are offering better wines and are less reliant on a generic line-up of varietals. “I have seen glasses for $40 or $60. Customers will have one glass of wine, but it has to be a great glass. If there’s one trend that stands out, that’s it.”

And the industry has become more inventive about dispensing these affordable luxuries. There’s the big-bottle program launched two years ago by Bar Boulud near the Lincoln Center, where head sommelier Michael Madrigale opens a large-format bottle – anything up to a six-liter Methuselah – and pours it by the glass at close to cost. Meanwhile, Olivier Flosse, wine director at A Voce Italian restaurant, is trying three-liter Jeroboams to keep things interesting, Hayde reports. “It’s a little more impressive to pour a glass of wine from a very big bottle.”

Bar Boulud's Michael Madrigale with a Methuselah of Bandol
© Bar Boulud / Zandy Mangold | Bar Boulud's Michael Madrigale with a Methuselah of Bandol

By contrast, outside the urban centers there’s a growing demand for half-bottles. In places with a less frenetic turnover, restaurateurs don’t want to risk opening a decent bottle only to sell a single glass. “Half-price wine list” days – a phenomenon common to both suburbs and city – are another way that restaurants are drawing people in on less popular nights of the week.

At the other end of the spectrum, there are well-priced and environmentally friendly keg wines, which have done away with bottling and labeling altogether. Kegs have already appeared all over the United States, but are, unsurprisingly, more prevalent in New York and California.

While Hayde predicts that this trend is here to stay, its longevity will also depend on quality. He worries that bulk buying wine leads inevitably to house plonk on tap, as well as logistical issues with transporting, returning and cleaning the metal kegs.

However, new enterprises run by 20- and 30-somethings, such as the Gotham Project and the Brooklyn Winery, have bet the farm on distributing wine in kegs – and it’s also the younger, curious urban crowd who are seeking out lesser-known wines. In line with a general shift from expensive restaurants with waitlists to casual eateries with a no-nonsense and often craft-driven approach to food and drink, younger customers are wanting the same from their wine.

“The 50- to 60-year olds are still doing Bordeaux, but the millennials are driving the new varietals, getting away from the standard fare of cab, merlot and chardonnay,” says Hayde.

They’re also more active on online discussion forums and in wine clubs, according to Alessandro Lunardi, of Italian wine giant Frescobaldi. American consumers are very informed, demanding and curious. Consumption per capita is increasing, but it’s the younger generation moving from beer and spirits to wine and embracing great wines from all over the world. Diversity – that’s an important thing linking by-the-glass programs.”

Meanwhile, Tony May says he read in The New York Times that the Benoit New York bistro operated by Alain Ducasse has started serving a 1992 Château Pétrus for $48 – an ounce. If customers want a standard pour, that’s $240 a glass, before tax.

“The sommelier wants to give the consumer a chance to taste the wine, but…” May gives a Neapolitan shrug. "You know what? If I want a glass of wine, I want a glass of wine. I don’t want an ounce of wine.

“But I’ve done the same thing. We enjoy trying to stimulate the consumer, but will it work? In my opinion, no, but it was good publicity. They got very good copy in the Times, so whatever he [Ducasse] is doing is OK. They spelled the name of the restaurant right, and so it was worth it.”

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  • Comments

    Joe wrote:
    04-Oct-2012 at 15:31:17 (GMT)

    Restaraunts rip people off when it comes to the profit they make on wine.

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