What Have You Done For Me Lately?

1. What Have You Done For Me Lately? Part II

2. Panelists Doug Frost MS, MW, Moderator John Blazon MS (Disney World) Charlie Arturoala (Grappolo Blu) Virginia Philip MS (The Breakers)

3. Panel Two: What Have You Done For Me Lately?Strategies for Coping and Thriving, or Is There a Margin of Error? PANEL TWO: What Have You Done for Me Lately? Strategies for Coping and Thriving, or Is There a Margin of Error? The Panelists were Doug Frost MS, MW, moderator, John Blazon MS (Disney World), Charlie Arturoala (Grappolo Blu) and Virginia Philip MS (The Breakers) • This is a group of seasoned pros and we were searching for ways to deal with the new economic environment. • How is a restaurateur supposed to generate profit from wine in this new world? • What should an operator do to protect their pricing structures and margins? • How do you sustain your sales when wine list sizes and inventories are forced to become smaller? • How can you train your servers to deal with these transitions? We began by introducing each of the panelists. The bios for each can be found by clicking on these links.

4. Intro: In Panel One, we discussed the economic crisis and its impact upon the wine program and purchasing. We started PANEL TWO by asking…

5. 1. If the economy has changed, and it has changed everyone's behavior, then WHO are your new customers?

6. To John Blazon, this was manifest, and he said, "There has been a change in the mindset of customers. They are thinking about price and choice in new ways." • Virginia Philip talked about the challenge of coping with these changing sales patterns throughout the constellation of hotel and restaurant wines sales. • Charlie Arturoala brought it to a fundamental place: "the economy is changing where in the wine world people go to shop."

7. 2. So we set about defining the new customer:

8. 2. How to define the new customer: • Doug tried to exhort people to react to the crisis in front of them before it's too late • But John noted that it was critical not to act so quickly that you confuse your customers • Charlie cautioned that the new customers are more savvy and more knowledgeable, so beverage managers have to be far more proactive

9. 2. How to define the new customer: Virginia expanded on some points from the earlier seminar: "What happens if you adopt lowered price points? You can permanently pigeonhole yourself into lower margins." Charlie reminded the group that this is about preparing yourself, your program and your staff for different customers, different moods and different attitudes. Virginia talked about the customers having a thirst for knowledge, and even more than ever looking to be thrilled by discoveries And John wanted to consider what happens as the recession goes through its cycle and begins to ease: "There will be a pent up demand that will be released at the appropriate time. Social acceptance for high spending on wine purchases will return. You've got to be ready when that comes and it will come in waves at certain times."

10. 3. So now it was time to really consider the new opportunities that are arising for savvy buyers. Should the next step be:

11. 3. The next steps: • To become aggressive with training since it will allow you to manage inventory and isn't an activity that necessarily adds to costs? • Is it all about creating discovery opportunities for staff and customers? • That was the answer to Charlie. He said, "You need to buy new and undiscovered wines. This is the time to look for those wines." • John advised buyers to harness curiosity for new sales, and be more aggressive about offering lesser-known varieties. • Virginia noted that you don't have to redefine everything. She felt that because many buyers were struggling, there would be wines becoming available that had previously been too expensive or unavailable, like 2005 Bordeaux. She noted that the Auction index is down and continues downward.

12. 4. Next we turned our attention to vendor relationships - How can you work better at getting your vendors involved?

13. 4. Vendor Relationships: • Doug started off by warning that there would be far more off-premise price pressures, as retailers dropped prices to move inventory and were offered more aggressive wholesaler programming and deals. • All admitted that suppliers are desperately programming everywhere. • John cautioned that everybody ("every link in the chain") has to be in this together. • Virginia agreed, saying, "Everyone has to agree to relax margins together." • Charlie concurred, "No one can continue to expect to operate business as usual." • Doug noted that lots of restaurateurs would not make these changes and plenty of them would still survive despite this. To them, he said, "The other way is to change nothing, and to protect your margins despite possibly alienating some customers.

14. 5. Doug then read a couple of quotes that he had collected earlier in the day:

15. One was a quote from a supplier, and we collected responses from the panel and audience. • The other was a quote from a distributor, and again we collected responses from the panel and audience.

16. 6. It was time to sum up the many ideas that we had considered in both panels. Ultimately we were discussing serious changes to each operator's wine and beverage program. Doug noted that it was critical to communicate these changes to:

17. 6. Communicating Changes • To Customers: so we asked all panelists to talk about their new ideas in PR, with wine clubs, with closeouts, with new arrivals, and how they might create explanatory events for customers • To Vendors: – Each of the panelists considered how they would communicate and negotiate these changes in margin and allocations, and how they might marshal the vendors to assist with event and product support • To Distributors: the panelists described their planned steps to enlist the vendors to protect or improve margins and to increase or at least preserve sales, by involving vendors in training, in allocation management, in event creation and in product support. • To Management: the panelists were all focused upon the priority of making sure management was on board with these new strategies. Each described their goal of complete coordination and support of all efforts to train staff and servers, to save money, to protect or improve margins where possible and to increase or preserve sales.

18. 6. Communicating Changes To Employees: because these changes require a new mindset, each panelists talked about what's new in training, and how they can utilize innovative training to achieve at least some wine and beverage program PR efforts, and how there might be new strategies for wine sales that would include getting your customers involved. The panel was asked to respond to the question: is green a genuine business philosophy when it comes to wine, or is the carbon footprint of international wines just too big? Finally John noted that there were more demanding ways to analyze the program, and to report the beverage manager's best efforts through explaining improvement in ROI. "What is a reasonable inventory turn? He wanted to know, and the panel offered their opinions. John noted that the ROI was necessarily different for the wine list than for the wine by glass offerings. " Virginia believed that new economic would lead to demands of new or at least severely improved inventory turns. "Is a thirty day turn a reasonable inventory turns?" she wanted to know.

19. 7. We finished with a round of Q&A