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Amuse Bouche: Why does that cost so much?

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I can’t tell you how many times over my life and career I have heard someone I know, or a stranger, complain about the price on a restaurant menu. It could be a dessert, a bottle of wine or a beautifully composed entrée. It doesn’t matter, the criticism is always the same: “Why is this so expensive?”

Having dined in some of the finest restaurants in the United States and Europe, as well as places I should have questioned even stepping over the threshold, I can tell you this: restaurants do not make the money you think they do.

Let’s start with desserts. Desserts, on average, will cost between five and 12 dollars on a menu. That seems like a pretty reasonable deal. And it is, to some degree. The mark up for most desserts is between 75 to 85 percent. In other words, that dessert you just paid $11 for cost the restaurant, on average, approximately $2.20. That might seem like a great moneymaker for the establishment, right? Well, not many restaurants can survive on $8.80 in profit.

Luckily, they aren’t hanging their hat on their dessert sales. That’s where wine can help. But more on wine in a bit.

From data I used to have from a few years ago, average dessert sales in restaurants are about 15 percent. In other words, one in six people order one. Preparing them falls into the hands of a niche group of professionals that have the skillset to create them. And that in turn comes with higher pay. So the labor-to-sales value ratio is very high for desserts.

In addition, because dessert sales are not at the level of entrées, there is far more waste than other sections of the menu.

Entrées are the bread and butter of your income and menu. Liquor and the bar in general have a better margin than food, but on national average, 70 percent of your total sales still come from the dining room, not the bar, though there are exceptions for sure. 

The markup on the price of wine at restaurants helps them cover their margins given that there are many hidden costs of operating an eating establishment, such as sensitive items like fish which can spoil in a few days if the menu items don’t sell. PHOTO COURTESY OF SCOTT MECHURA

The big one: wine. “I can buy this wine at the grocery store for half the price it is on this restaurant wine list.” Yep, you probably can. But you’re not getting the meal, service, ambiance, experience, professional advice and tutelage from a knowledgeable staff member at the grocery store.

Wine is also a bandage for less profitable items, or sensitive items like fish, that can spoil easily if they don’t sell, similar to the aforementioned desserts. There are many things that can and do go wrong in restaurants from a waste or spoilage standpoint. And that $100 bottle of wine that may be $60 in the grocery store helps alleviate some of that. The whole system has evolved to do its best to work in a balanced harmony and success, in an industry that is seldom profitable, despite your bottle of wine.

Also, wines by the glass often rank up there with desserts in terms of waste percentage. 

Yes, wines by the glass can be expensive, but so is dumping three quarters of a bottle that doesn’t sell within the short window in which it was opened. Particularly at sea level, where wines oxidize and go bad much more quickly than at higher, dryer altitudes.

A little advice: grocery and liquor stores typically use a static percentage for their mark ups. But in restaurants, the more expensive the wine on the list, the smaller the mark up. So you’ll “save” more, the more expensive bottle you order.

Now, before you find yourself short of breath as you open your next wine menu, just be glad you aren’t ordering something as simple and elementary as pancakes, soup or pasta, whose mark ups round out together in the neighborhood of 1600 percent.

Scott Mechura has spent a life in the hospitality industry. He is a former certified beer judge and currently the executive chef at Buck’s T-4 Lodge in Big Sky.

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