Retail Pricing and Segmentation
The average retail price of wine depends on market segmentation. Jug wines average under $5 per bottle and make up 12% of sales. Popular premium wines range from $5-$10 per bottle and account for 33% of sales. Mid-premium wines cost $10-$15 per bottle (8% of sales). Super-premium wines average $15-$20 per bottle (8% of sales). Luxury wines cost over $20 per bottle.
Markups in Restaurants and Wine Shops
Restaurants markup wine 200-300% over retail price. A $20 retail bottle may cost $60-$80 in a restaurant. Specialty wine markups can reach 400%.
Wine shops in India average 4-5 Lakh rupees in profit.
Pricing by the Glass and Wholesale
To calculate wine by the glass, divide the bottle price by the number of glasses. A $60 bottle at 6 glasses is $10 per glass.
Wholesale wine pricing is generally 50-67% of retail. Restaurants pour cost is ~20-25% of bottle price.
Calculating Wine Bottle Price
Most on-premise establishments price wine bottles at four to five times the wholesale price of the bottle. (This means a pour cost of ~20-25%, or profit margins of ~75-80%, not accounting for variance/waste.)
Regional Influences and Taxes
Some of the best wine regions in the world were identified to be particularly good for growing grapes. That spot where the sunlight hits the vines just right and the soil is perfectly suitable for grape cultivation.
A big chunk of the price of an average bottle of wine is tax. The UK has the second highest excise duty rate on wine in the European Union, after Finland, and taxes on wine (and other alcoholic drinks) have been increasing above the rate of inflation.
Industry Standards and Factors
The industry standard is to mark up a bottle of wine 200-300% over its retail sales price.
Many factors can influence the price of wine, chiefly the history of the wine, its geographic origins, its recognized qualities, and the demand in the market for the product.
Industry-wide markups average two and a half to three times wholesale cost, says Randy Caparoso, a restaurant wine consultant at Wine List Consulting Unlimited. A bottle priced at $10 wholesale might sell for $15 retail, but $25 to $30 in a restaurant.
Wholesale Pricing Strategy
If you can, I recommend sitting around the 40% off retail price point for wholesale which gives you up to 30% off retail for you and your wholesale customers to play with for promotions. If you’re considering having multiple levels of wholesale, don’t go deeper than 50% off retail.