As dining rooms close in response to COVID-19, rare wine sales provide a much-needed revenue source for restaurants — and a once-in-a-lifetime opportunity for collectors.
As soon as the staff at Manresa learned that they would not be able to keep their dining room open, wine director Jim Rollston knew that their small but premium wine inventory could bring a quick injection of cash to help keep a few people employed. While Manresa’s kitchen transitioned into a takeout operation, and its management refunded a month’s worth of Tock reservations to diners, Rollston started plucking higher-priced bottles from the cellar and offering them to wealthy Manresa regulars who had expressed interest in collecting rare wines.
“Our pricing was way below the market price, intentionally, because I wanted people to see that and swoop in, which they did,” says Rollston. Among the bottles he sold were several “unicorns,” like the rare Keller G-Max. In the open market or on a restaurant’s wine list, the German dry riesling might sell for $1,500-$2,000. A collector snapped it up from Manresa for $800.
Word of Manresa’s wine sale spread quickly among collector groups throughout the region, and within the first week, the restaurant had raised over $40,000 from rare wine sales made to wealthy collectors, some of whom work in tech. One patron, who Rollston says was primarily interested in Manresa’s “trophy bottles,” spent $20,000 singlehandedly. “I probably left some dollars on the table,” adds Rollston, “but things are changing really quickly right now.”
In New Orleans, cocktail bar Cure is auctioning off its most highly allocated spirits via Instagram. In Washington, D.C., Jack Rose Dining Saloon is liquidating much of its whiskey library, which was the most extensive in the country. Countless restaurants and bars are scrambling to transform into retail operations to sell off their wine lists. And at fine dining restaurants, cellars full of scarce, “once-in-a-lifetime” bottles represent big investments that operators now need to recoup as quickly as possible.
Selling one of the world’s most coveted rieslings for nearly half-price is just one of the ways in which restaurant operators, faced with catastrophic conditions and inadequate federal support, are desperately trying to survive.
“Selling wine, whether as add-ons for food pick up like we are doing at the Alinea Group, or directly to consumers, makes a ton of sense right now,” says Nick Kokonas, CEO of Tock and co-owner of the Alinea Group. “The wine and liquor cellars are long-term investments… the best part is that these are not perishable goods, and we already have them on site.”
But even as they sell sought-after wines for a steal, these restaurants are met with challenges in offloading their most prized bottles. “There are always buyers, and there are always people who are willing and able to take advantage of a situation like this,” says Jordan Salcito, director of wine special projects at Momofuku and the founder of the canned wine beverage Ramona. “The problem is, no one that I know is thinking about buying right now.” She speculates that wealthy collectors may likely be preoccupied with a historically volatile stock market, and may not be keen on making big investments. “But, if you are one of those people who does enjoy wine, and who has some extra cash, it’s a smart move to buy some of these.”
While Rollston tapped potential buyers directly, Zach Pelka is pursuing a different avenue for liquidating some of his assets at the New York and San Francisco locations of the Champagne Bar, the Riddler, where he is CFO. “Obviously when all this shit hit the fan, we were trying to identify the normal cost-cutting methods, but also how we could sustain and put ourselves into hibernation mode until, hopefully, the world returns to normal,” Pelka explains.
With over 150 bottles of Champagne on the list at each location, including rare bottles, the bars carry a significant amount of inventory that could potentially bring a much-needed infusion of cash. Pelka says pivoting to a retail operation wouldn’t make sense — he was reluctant to put his staff at risk of exposure to customers. Plus, he adds, ”there’s not a huge amount of everyday consumers who are going out and purchasing expensive bottles of Champagne as the economy collapses around them.”
Instead, Pelka initiated a conversation with wine auction house Acker, which he says is purchasing wine from restaurants at cost, plus a markup. “You’re basically making money on the product, and offloading it, and then they’re turning around and having auctions to their greater member base,” says Pelka. “It’s incredible that they’re doing that.” (A spokesperson for Acker declined to be interviewed for this article.)
Other auction houses, like Zachys, are collaborating with fine dining restaurants to help them liquidate their cellars. “We look at restaurants coming to us to sell as colleagues during an unprecedented and difficult time,” says Zachys president Jeff Zacharia. “We can help because we can sell massive amounts of high-end wine very quickly.” (Rollston says he started hearing from wine auction houses last week, but he’d already sold through most of his list by the time they approached him.)
Regardless of the avenue through which they’re sold, each bottle represents a careful risk calculation — and, in some sense, a gamble. Most of these wines are incredibly difficult to acquire, and wine directors like Rollston are now met with the challenge of assessing how much of their inventory to liquidate now, versus sell to guests (presumably for more money) when they do eventually reopen their dining rooms. “A lot of those wines we’ll never be able to purchase again because they’re so rare or so expensive in the open market,” says Rollston. “We had to balance the current need to generate revenue with the hope that we will reopen, and guard some nice wines for the future.”
Rollston is also keenly aware that such a model isn’t sustainable for ongoing cash inflow: once these bottles are gone, they’re gone. Manresa will likely not have another wine sale for a very long time, if ever. “We still have so many amazing wines we’ll be able to have in the dining room when we reopen,” he says. “But it was really difficult to have certain wines walk out the door.”
Around the country, a lot of those wines are walking out the doors of fine dining restaurants. The result, according to Pelka, is something like a fire sale for expensive, once-in-a-lifetime wines. “I couldn’t think of a set of circumstances that could provide such a flood of unbelievable product into the market at one time,” says Pelka. “Whenever markets collapse, there’s a lot of great deals. Every restaurant in New York and San Francisco has huge amounts of inventory they’re trying to liquidate, so there’s definitely a lot of incredible product out on the market at unbelievable prices for someone who’s looking to buy right now.”
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