What’s the Return on Investment from a Wine Dispenser?

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Every business wants to earn more revenue and minimize costs.

Most are also capitalizing on the wealth of data being captured and harnessed and the efficiencies being generated by new technological innovations.

Wine, food service and restaurant businesses are no different.

Photo by Wineemotion USA

Investing in Innovation Drives Return on Investment

 

A survey by Deloitte in 2018 indicates that businesses who innovate see better financial performance. Respondents in the wine industry reported that digital tools improve how business decisions are made, while also improving customer experiences.

The food service and restaurant industry, of course, has been hit especially hard during the pandemic. Data-driven decisions will help maintain objectivity and chart the path forward. To not only survive, but thrive, restaurant owners must remain agile and commit to exploring new and innovative business models and service concepts in the weeks and months ahead.

One of those new and innovative models involves moving away from traditional “storing and pouring” methods toward automated wine dispensing and preservation systems.

You might be thinking, “aren’t they expensive?”

The best investors in the world will tell you that you’ve got to spend money to make money and this has never been more accurate than in this crazy year we call 2020.

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How Wine Dispensers Produce Return on Investment

 

Data-driven decision making uses cold hard statistics that don’t lie to attribute outcomes – successful or not – to specific efforts and investments.

One of those data-driven decisions is return on investment, or ROI.

When making a decision like whether or not to invest in a wine dispensing and preservation system, it’s important to not only focus on the investment amount, but also:

  • whether that investment will pay for itself in time
  • how long it will take to recoup the initial investment
  • what the return on the investment will amount to

So, let’s do that.

Will a wine dispensing and preservation system pay for itself in time?

  • The short answer is YES.

How long will take to recoup the initial investment?

  • Most see a return on investment between six to twelve months.

What will the ROI amount to?

  • This part is up to you and how you manage your business. But in this article, we’ll dive into the elements that contribute to this number and what you can do to maximize them.

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Drivers of Return on Investment

 

To calculate return on investment, the formula looks like this:

ROI = (Net Return on Investment / Cost of Investment) ×100%

There are two elements of the net return from a wine dispenser: increase in revenue and cost savings. Anything that contributes to these factors will increase return on investment.

Increase in Revenue

 

  • Consumers love to experiment with new technology. Wine dispensers provide a self-service option that eliminates customers having to wait for their next glass. This means more sales. Even better, they can now socially explore all the wines you have to offer. Research shows that by adding an automated service option to your wine program, you can grow revenue by 40 percent.

 

  • Frugal consumers will be more likely to try high-end offerings. Some customers might not want to commit to an entire bottle of an expensive wine, or even a glass. But because a wine dispenser provides the option to pour a precisely measured sample, customers are more likely to splurge on that wine after tasting it and your business has a better chance to sell and profit from those higher-end bottles.

 

  • Wine dispensers drive sales. 85% of businesses say sampling increases wine sales by 25% or more. Maria Scillieri, owner of Pane E Vino in Wyckoff, New Jersey, is one of them. Scillieri bought a wine dispenser from Wineemotion and says that the system “has been a great part of our success at Pane E Vino. The system has increased our wine sales and offered a fantastic experience for our customers.”

 

  • Provide what your customers want. The integrated and intuitive technology that comes with a wine dispenser like the one from Wineemotion automates the collection and organization of sales data to uncover insightful trends in consumer tastes and preferences. This leads to increased revenue.

 

  • Dispensers preserve high-end bottles and make by-the-glass high-margin offerings more profitable. Higher-priced bottles of wine generate more profit per sale. Unfortunately, the limiting factor is the shelf life of a premium bottle of wine once you have opened it. For this reason, many restaurants and wine bars typically reserve higher-priced bottles for bottle only purchase. In doing so, they completely eliminate the opportunity for significantly higher margins that come with serving high-end wines by the glass. Because a wine dispenser is also a wine preservation system, this is no longer a problem.

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Decrease in Costs

 

  • Eliminate overpouring. A wine dispenser ensures an exact pour every time. Studies show that the average restaurant sees 15 to 20 percent in losses due to over pouring. A one-ounce overpour doesn’t seem like much, but, over time, really adds up. This kind of waste can cost your business thousands of dollars in losses each year. By recouping those losses, the wine dispenser pays for itself, since that number can exceed the cost of a wine dispenser system.

 

  • Reduce waste. A wine dispenser preserves a bottle of wine for 30+ days. When you are able to sell the entire bottle rather than pouring what’s left after a few days down the drain, those costs contribute to return on investment.

 

  • No more free dinners. How many times has a customer sent back a glass or a bottle of wine because it wasn’t served at the right temperature? Wine served at an improper temperature can ruin the dining experience and possibly cause the customer not to return. Not only does this produce waste, but many establishments will end up comping a meal or maybe even the entire bill. Because wine dispensers also operate as a refrigeration system, this problem is eliminated and those costs disappear.

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Long Term Dividends

 

The cost of a Wineemotion automated wine dispensing and preservation system might seem high at first glance. But, if you think in terms of return on investment and the potential profitability it can provide for your business, this innovative technology will pay for itself and continue paying dividends well into the future.

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