Why 2016 Could Be a Difficult Year for Sommeliers

Table Of Contents (all h2's added automatically)

No tipping

A lot that is positive and encouraging has been said about the emerging no-tipping trend, but it is hard to see how it will do anything for sommeliers in New York except reduce their numbers. This is because sommelier jobs on the floor skyrocketed after New York City restaurants were hit with a series of tip-focused lawsuits. Six and seven-person sommelier teams emerged in restaurants within groups that previously employed much fewer. Restaurateurs were being sued for big money for subsidizing kitchen help and management functions out of tip pools, and hiring more sommeliers was hit on as a reliable solution to the changing landscape. Floor sommeliers could receive tips, but also take up some of the slack being left in the wake of fewer managers, fewer maitre d’s, and fewer captains on the floor. It was the legal answer to a challenging situation for operators looking to meet budgets. But moving to a no-tipping model means that restaurants will be able to distribute wages however they see fit. The smart bet is that some of that money will immediately go to kitchen labor. The kitchen side of the equation is something that an increased amount of sommeliers had not been able to solve. At the same time, the momentum will likely shift away from larger sommelier teams and back into more all-purpose management jobs. The sommelier surge was a temporary solution that seems to have run its course. At the same time, no-tipping means higher prices on wine lists, and that may deter consumers from buying more bottles.

Recommendation-Free Sales

Prosecco sales are soaring in the United States. Rosé has been on fire as well. One aspect that these categories often share is that consumers don’t feel that they need a recommendation when making a choice among them. Consumers are comfortable purchasing these wines on their own. This is especially true of first-time wine buyers. Nielsen recently noted that, in the States, one third of Prosecco’s massive growth has come from buyers that never bought sparkling wine before. Prosecco is an entry point for consumers who are new to wine. What’s worth noting about that is that Prosecco is not a sommelier-driven category. Sommeliers typically shun Prosecco, and there are New York City wine directors that have gone on record as refusing to offer a Prosecco. What’s important about this is that although we think of sommeliers as introducing people to wine, it seems that consumers are choosing to find their own way into wine and that they are gravitating towards categories where a sommelier’s advice isn’t needed. In the same way that some movies are "critic proof," obtaining large ticket sales even if the reviews for them are lukewarm, some wines have become "sommelier proof."

Sommelier Shilling

A blow to consumer confidence in sommeliers has come from sommeliers themselves. It is now common — and not only common, but expected — that sommeliers will shill for their friends and their friends' wines when speaking to the press. The excitement that sommeliers repeatedly express for wines in the press is wholly at odds with their level of excitement for those same wines in private, but this no longer applies to just one or two people who are fluent in media training — this is pretty much the industry at this point. Over and over again sommeliers publicly go on record endorsing wines that have little going for them on their own merits in the market except for some sort of personal tie with the sommelier.

This is at odds with what brought sommeliers to such prominence in the first place — which is that sommeliers introduced consumers to new wines that offered superb value in the face of a wine writing establishment that often continued to predictably endorse their own favorites even as prices for those wines skyrocketed and left most consumers behind. Sommeliers stayed with consumers and offered them great wines in their price range when critics didn’t. In place of that, a certain cynicism has set in with sommeliers in that they don’t seem to think readers will be able to tell the difference between a good recommendation and a personally motivated one. This has already been toxic to the reputation of sommeliers in general and will only continue to be more damaging unless the sommeliers themselves change their tune.

The Growth of Direct-to-Consumer

As regulations governing the interstate shipping of wine have gradually eased following a 2005 United States Supreme Court ruling, the landscape for wine sales has also changed. 41 states now allow shipments of wine from wineries located out of state, while it used to be only nine states. This means that many domestic wineries, both large and small, have shifted their model to one that emphasizes direct-to-consumer sales. The impetus for this is easy to understand: if they sell direct, wineries keep for themselves the margin that would have gone to a distributor. A winery can make twice as much on a bottle of wine sold direct as they would on a bottle of wine sold through distribution. Struggling wineries know that the number one item on the action list for profitability is increasing the amount of direct-to-consumer sales, and it has become the common strategy for many wineries, struggling or not.

The idea is to build relationships with private consumers directly, bypassing distribution and restaurants.

Now that more states allow direct shipping the wineries have more incentive to focus on building their own mailing list, and to invest in hospitality centers and tasting rooms aimed at private consumers, not trade buyers. The idea is to build relationships with private consumers directly, bypassing distribution and restaurants. This is especially fruitful for wineries because those private buyers who have established a relationship with a winery are much more loyal in their purchases year after year than the fickle trade buyers, who are quick to move on to the next new thing to keep their own customers excited. It is also true that a relatively small amount of consumers act as an outsize portion of the total wine market. A relative handful of people, measured in the thousands, buy an outsize amount of wine.

Buying power and interest in wine isn’t evenly distributed across the American population. So wineries don’t need to reach every American directly, they only need to reach the much smaller subset of consumers who buy heavily. They try to entice those buyers by offering mailing list-only wines, special limited releases, back vintages, and unique one offs that aren’t available in the open market. Those are exactly the kind of wines and special finds that used to go to sommeliers, but no longer do. It is those wines that sommeliers used to feature so as to stand out and make their own wine lists more distinctive. And the sommeliers are left out of the direct purchasing market entirely.

While private consumers are allowed to buy direct from wineries, restaurant sommeliers are not. They purchase through distribution. Which means that as wineries move away from distribution, on which they make less money, bottle quantities are reduced for sommeliers. This is part of the reason that private buyers can often obtain certain wines more easily than sommeliers. The profit potential for a domestic winery cultivating private clients has meant that they have a much bigger upside in direct-to-consumer relationships than in wooing sommeliers. Consumers looking for something unusual and distinctive are as likely to find it on a winery mailing list as on a restaurant wine list. With these changes sommeliers have encountered a new competitor for consumer interest: their own suppliers.

Online Wine Forums

In step with a rise in the private consumer market has the been rise of Internet chat rooms catering to them. Online discussion boards and tasting note archives allow private consumers to communicate with each other, swapping tips and information without the aid of a sommelier. These discussions can get extremely nuanced, and the crowd sourced information that is available is vast. What is missing from these chats is the need for a sommelier. In fact, "ITB" or "In the Business" posts from individuals who are in the wine trade are often received with skepticism, and with the assumption that the poster may be pushing some sort of business interest. These communication vehicles have had the effect of spreading information more readily amongst the private consumer audience, and the upshot is that someone can be turned on to the next great new wine at home, in front of their computer, rather than relying on restaurant sommeliers to make the introduction. At the same time, retail email programs have taken on the role of in-depth primers to new wines, further usurping the need for sommeliers to make a connection.

Wine Apps

Phone apps catering to wine drinkers have been fairly slow to emerge, but are now becoming a much larger presence. Comparative pricing, bottle recommendations, and tasting note archives are now readily available on phones, and those apps often take advantage of location information to customize results or phone camera pics to recognize individual bottle labels. The potential for consumer information and resources is huge, and so far the advantage has been to private consumers as restaurants and sommeliers have not made any moves to develop apps that could be helpful to their own sales goals. Sommeliers are already complaining about customers who decline to speak with them, preferring to consult their phone apps instead. The information in these apps is seen by consumers as unbiased, and a reliance on them is likely to grow.

SLA Restrictions

There hasn’t been much momentum from the sommelier community to counteract proposed changes from the New York State Liquor Authority that would restrict purchases from private collections. Many sommeliers seem reluctant to go on record or organize a response, fearing that their restaurants may become targets for fines or increased attention from the SLA. But if the proposed changes go through this January, sommeliers will be left without bottles of some of their go-to revenue generators and draws. This is because it is the wines that are in the most demand that can command the easiest markup from restaurants. If consumers are very happy to obtain the wine at all, they are less price sensitive about the charge for it. If the supply of those wines to restaurants is chocked off, there will be fewer and fewer bottles which restaurants can sell for an easy return. By the same token, restaurants that have used lower prices on these same wines as a draw to customers will find that they no longer can entice drinkers to their door so easily.

More Aspiring Sommeliers:

It seems counterintuitive that more sommeliers would negatively impact the sommelier world, but one noticeable change has been wage stagnation or decline. TV shows and movies feature sommeliers, sommeliers are getting more and more press attention, and interest in wine training certification has never been higher. Many people have entered the job applicant pool and many more will continue to do so, if the dramatically increased enrollment in wine courses is any indication. But with more sommeliers looking for work, there is less incentive from employers to offer higher wages. The result has been an incredible amount of volatility in the sommelier job market, as sommeliers take jobs with high expectations but soon find themselves burnt out from long hours and low pay. The amount of turnover in what are thought of as important positions is somewhat staggering, and greatly outpaces the turnover in the chef world. The difference, of course, is that chefs are more likely to be financial partners in the restaurant they are associated with. At the other extreme, some sommeliers stay for years in positions they are unhappy with, having convinced themselves that they are unlikely to find a better opportunity if they leave.

The Emphasis on the New

If you speak with sommeliers who are over 35, they are often characterized by their concern for vintages. A big part of their expertise is that they are familiar with a large number of back vintages. But you see today a different kind of market. Verticals of the same wine on a list seems from an operator level to be a highly inefficient market proposition. The old idea is that the operator should sit on ten or so vintages of a wine in the cellar so that the list "can look good" and so that the sommelier can tell a customer which of those ten options is the best one. This situation calls for holding ten potential answers to a question so that a sommelier can have an opportunity to present one of them as the right answer. The other nine are sunk revenue or for people who don’t want to speak with or believe the sommelier. That is, to say the least, a bad business model for return on investment. And the restaurant must subsidize the sommelier playground.

Younger sommeliers don’t talk about long ago vintages.

How that has shifted is in the emphasis on the new. Younger sommeliers don’t talk about long ago vintages. They talk about what is new, as in a new producer, or a new region, or a new grape, or some combination of those. What is meant is something new to the consumer. Something that is novel and that they haven’t tasted before. This has largely become the model in the restaurant world. A cabinet of curiosities mentality has taken hold, by which sommeliers take pains to acquire what is difficult to find, what is seemingly unique, and what is new. It makes sense in a Google searchable world that what would be prized is what is hard to find or new to the system. For awhile it also meant that sommeliers were on their own, looking for wines that the wine critics weren’t covering. But the real issue for sommeliers is that journalists are more naturally suited to finding and spreading the news about what is new.

Sommeliers speak to a limited set of people each shift. Journalist audiences are multiples of that size. And journalists have more opportunities to travel and make new discoveries than sommeliers who have to work the floor each night. Slowly the old hierarchy of writers dictating to sommeliers what they should be interested in has returned — this time focused on the new — and sommelier autonomy has diminished as a result.

All photos by Daniel Krieger.