Sunday, September 09, 2007

Bad for Business?

A friend of mine in Mt. Lebanon reports on a sour recent experience at Iovino's Cafe on Beverly Road. My friend and a partner took a visitor and a partner, visitors from out of town, to dinner. They brought a bottle of wine, prepared to pay a reasonable corkage fee. The restaurant, however, charged a "stem" fee -- $4 per glass -- which cost him $16 (four people, four glasses, one table) on top of the cost of the bottle.

Stem fees aren't unheard of in the restaurant business, though they are relatively uncommon at restaurants, like Iovino's, that don't offer a wine list (and don't pay to select and store wine that they sell). (For a review of the issue from an industry point of view, try this piece.) Modest "per table" or "per bottle" fees are more common, and reasonable in light of the cost of stocking, cleaning, and replacing wine glasses. $4 per stem, however, is out of line; $16 for the bottle is something you'd expect to pay in a high-end restaurant in San Francisco or New York, not a pleasant neighborhood restaurant in Pittsburgh.

My friend won't be back.

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32 Comments:

Blogger Schultz said...

That's too bad, the food there is great. Hopefully Jeff I. and co. get the message.

September 09, 2007 12:12 PM  
Anonymous Anonymous said...

Hey youins guys,

Kennywood charges three dollars but you get to keep the fancy drink glass.

September 09, 2007 9:54 PM  
Anonymous Anonymous said...

Mike:

I am very troubled by this post. First, please don't turn this great site into a bulletin board for people's random complaints about local businesses. I don't want to check out this site tomorrow and read about someone's bad experience at the bakery or the dry cleaner. That kind of stuff really "dumbs down" the otherwise intelligent discussion on this site.

On a more direct note, I think Iovino's has been an incredible breath of fresh air to the Mt. Lebanon and Pittsburgh restaurant scenes. Jeff and his partner have recently been recognized as two of the region's up and coming culinary talents. They are busting their tails, and by all accounts have done an amazing job. Like all good restaurants, I think they have earned a pass on complaints about prices.

Also, I did some quick research and it seems that the standard stem fee around town ranges from $2 to $5, and the spots at the low end are no where near the quality of Iovino's. Further, most per bottle corkage fees range from $10 to $30. Therefore, the couple enjoying one bottle of wine or the foursome enjoying 2 bottles at Iovino's are paying less at $4 per stem than they would somewhere else at $10 per bottle.

All that aside, I see no reason to take cheap shots at an otherwise successful local business.

September 09, 2007 10:09 PM  
Anonymous Anonymous said...

Dave,

I appreciate your looking into other businesses and their cork/stem fees. Although my family rarely has the money to go out for dinner to someplace like Iovino's, given the additional cost of a sitter, I nonetheless appreciate the perspective you provided. That being said, I did not perceive Mike's comments as a dumbing down of the blog. This blog has afforded people the opportunity to regularly complain and offer feedback about municipal services. I think it is reasonable to expect that businesses and services be subject to public comment and scrutiny. To do otherwise would run the risk of censorship.

September 09, 2007 11:06 PM  
Blogger Mike Madison said...

I've eaten at Iovino's and enjoyed the food and the ambiance, and when the occasion arises, I'll go back.

That said, this isn't a random complaint and it's not a cheap shot. First, it's true, not a rumor; second, it comes from someone I know, whose opinion I value, and who has enough experience eating and drinking in fancier cities than Pittsburgh to know when prices are in -- and out -- of whack. I do occasionally get email from people with customer complaints about Mt. Lebanon businesses; I rarely publish them.

Second and more important, even successful businesses need to address legitimate complaints -- even about prices, and sometimes especially about prices. The blog isn't a cheerleading site for promoting Mt. Lebanon; it's a discussion site for the town's virtues -- and its warts. I've been meaning to post about the fact that Rollier's is now selling Webkinz. *That* would be a random complaint!

Third, a "standard" stem fee that ranges from $2 to $5 isn't really a standard at all. It's a range, and a pretty wide one. (Also, I think that your math is off. My friends paid a total of $16 for stem fees for a single bottle split four ways, not for two bottles. A $16 corkage fee would drive me away from a BYOB, too.) I have a problem in the first place with a BYOB restaurant that charges a stem fee. Corkage, OK; table fee, OK; stem fee just strikes me as petty, since the stem revenue is likely far in excess of stem costs, reasonable profit included. If the food margins aren't high enough, raise food prices, rather than having wine drinkers unknowingly subsidize the rest of the diners. And I have a bigger problem with a neighborhood restaurant -- excellent chefs and all, that's what Iovino's is -- setting its fee at the high end. For example, Vivo in Bellevue, which is another top neighborhood restaurant, charges $5 corkage. Last time I checked, Casbah in Shadyside, which has an extensive and interesting (and therefore costly wine list) charged a corkage fee, not a stem fee.

But my problems aren't really important. What's important, or interesting, anyway, is whether the fee will or should impact the restaurant's business.

That's really at the bottom of the post: Like most of us in Mt. Lebanon, I'd like to see Iovino's (and other restaurants here) continue to succeed. I worry that a neighborhood BYOB with stem fees to match high class restaurants in much bigger cities will drive away wine-drinking customers -- who are, other things being equal, bigger spenders on food than their teetotalling counterparts. Restaurant owners and their customers share an interest in the future of the dining business. Because of their uncertain impact on that future, stem fees are controversial nationally. That's why I included a link to an article that discusses them from the industry's point of view. There's no reason to exclude Mt. Lebanon restaurants from that debate.

Lebo businesses have to compete; they have to earn their customers' loyalty and their own longetivity, such as it is. Do Bistro 19 and Luma charge stem fees? Or corkage? They both have extensive wine lists; perhaps they don't permit BYOB? Even if they don't, in a group of four I'll pay less for a modest bottle of wine from their cellars than I will buying my own and taking it to Iovino's. It seems to me that "bad for business" is a fair characterization of that conclusion.

September 09, 2007 11:19 PM  
Anonymous Anonymous said...

Personally, if a place every charged me $4 per stem I would never go back. They could choose $16 now and zero business later if that is their strategy.

Unlike the Government, who can charge fees no matter how absurd they are, we, as consumers, can choose with our wallets.

Will I go to this place? Probably some day, but I will never get wine, as I probably wouldn't have anyways.

If they would just raise the price of a bottle it wouldn't cause as much of a stink.

September 10, 2007 10:04 AM  
Anonymous Anonymous said...

Unfortunately Mike, this is what I was afraid of. The comment of Anon 10:04 has no basis in fact, but further criticizes Iovino's and may improperly sway folks away from Iovino's. This comment incorrectly assumes that Iovino's sells wine AND charges a stem fee on top of that. That's not the case at all. It is strictly BYO.

Also, I would be curious as to how you distinguish between what you refer to as a "neighborhood restaurant" and a fancier, high end restaurant. You seem to imply that the latter has a greater leeway when it comes to the types and amounts of fees it can charge. Is it simply a matter of location? Some of the best restaurants in the country are located in neighborhoods or outlying areas rather than on city streets.

Also, as for prices being "out of whack," please compare Iovino's $4 stem fee with the cost of buying a bottle of wine in other restaurants around Mt. Lebanon. I did so this morning. Most local restaurants post their wine lists online and you can compare these marked up prices against the retail prices on the PA LCB's website. I can assure you that in every instance, bringing my own bottle to Iovino's and paying the stem fee remains the better bargain.

So, while I'm against knocking any local establishmnet on the basis of price alone, if you're going to go out for dinner in Mt. Lebanon and you're going to drink wine, you'll likely end up no worse at Iovino's (and perhaps better) than any other spot.

September 10, 2007 11:09 AM  
Anonymous Anonymous said...

Dodge the traffic, a drink at Bado's, dinner at Iovino, happy wife.

mmmmm.

I like Sushi 3 2.

September 10, 2007 11:25 AM  
Blogger Mike Madison said...

The distinction between neighborhood restaurant and high-end restaurant lies on a continuum, but yes, higher-end restaurants can and do charge more for wine. (Jean-Georges in New York: $85 per bottle!) It's more an industry distinction than mine, and it's a combination of style, ambiance, reputation, geography, and food quality.

So, neighborhood restaurants can be terrific but remain neighborhood restaurants, and while I've eaten at fabulous, elite restaurants in remote places, those rarely exist outside a context of high-end food and drink generally. The French Laundry, for example, is probably the most famous restaurant in the U.S. right now, and it's located in a completely mediocre setting in Napa -- right next to one of the country's great wine regions. The SF Bay Area is one of the great restaurant regions in the U.S.; there are extraordinary "neighborhood" restaurants in Berkeley, for example (Chez Panisse is one), that are world-class.

Pittsburgh, however, has no equivalent restaurant context or tradition. The dining scene here has improved vastly in the last decade, and there are very, very good restaurants here now, but no one should confuse Pittsburgh with New York, or even Philadelphia or Chicago. Even Pittsburgh's restaurant reviewers refer to Iovino's as a neighborhood restaurant.

One difficulty with making price comparisons with other Lebo restaurants is that their menus (at least the online menus that I found at Luma and Bistro 19) don't list vintages. A second difficulty is that the comparison doesn't control for type of wine (less to more expensive). If I'm going to go to the trouble to take a bottle to dinner with me, I'm not going to grab a $10 bottle that I grabbed off the shelf and stuck in the fridge; I'm going to take the special $40 bottle that I selected with expert advice (and probably not at the state store). If I can't get that bottle opened at Luma, which has its own wine list, I won't pay for a double-the-cost cellar version. Instead, I'll buy one of their $20 bottles. Unless I can get those for $4 or less through the LCB, Luma offers a better deal than $4 apiece for four glasses of stem fees. So the comparison is: $20 for bargain wine at Luma vs. $56 ($40 plus $16) for nice wine at Iovino's. Or $45 ($40 plus $5 corkage)for the same nice wine at Vivo. I'm not originally from Pittsburgh; I'm not averse to crossing a river! Mt. Lebanon isn't a market unto itself. :-)

Any restaurant can choose policies and prices that it thinks are right for it. And potential customers can sign up or stay away. Some BYO restaurants have discovered that it makes sense to waive corkage altogether. It's fair, I think, to let the community know what the choices are.

September 10, 2007 12:52 PM  
Anonymous Anonymous said...

Tell me this, since it is BYOB. Can you bring say, 5 bottles of wine, and they will still only charge you $4 per stem, or will it be $4 per stemp per bottle?

If so, maybe you could bring one of those boxed wines.

Dave, why are you so interested in this? I understand you don't want to turn this place into "oh, I had a bad waiter...", but really, I took this as "Are stem fees appropriate or not?"

September 10, 2007 2:16 PM  
Anonymous Anonymous said...

I suppose I'm interested because I have great respect for what Jeff has created, and the time, effort and dedication that he has put into it.

Mike's original post was not exactly a general objection to stem fees. That could have been accomplished without mentioning any establishment by name. However, Mike's original post reads as an indictment against stem fees at Iovino's - particulary by adding the notation that his friend will not be back. Its his blog, he has that right.

However, I think Mike and the other posters may often underestimate the size of their audience, and the impact that their posts have on a business such as Iovino's. Or perhaps the have a very good understanding of their impact...

Either way, I appreciate the fact that this blog is not set up to cheerlead or market for the businesses in Mt. Lebanon. And I also realize that Iovino's will continue to succeed with or without my input. However, if a post comes across as unfair or unbalanced, I think its only fair to offer the other side of the argument.

Mike, we can continue this debate over dinner some time. I'll bring the wine and cover the $4.

Cheers!

September 10, 2007 3:03 PM  
Blogger Mike Madison said...

Dave,
You're on.
Cheers,
Mike

September 10, 2007 3:10 PM  
Blogger Jefferson Provost said...

High stem-fees at a restaurant that doesn't even have a wine list are an example of a kind of penny-wise-pound-foolish mentality that pervades Pittsburgh. I feel like I'm constantly running into businesses that try to either (1) make more money by itemizing and billing costs that should be included in the cost of the main product/service or (2) save money by not including some services that would be taken for granted elsewhere. I was astonished when I returned here to find that there are still restaurants with table service that don't accept credit cards.

A bit of Googling shows that restaurant-quality wine glasses can be had wholesale on the web for about $2 each. Even if the average lifespan of a single glass is only 8 uses, and it costs a nickel to wash it each time, that gives Iovino's an average profit per wine drinker of $3.75, or a profit of $30 per glass purchased, for a margin of 1500%. Not too shabby.

...or is there some major stemming cost that I'm missing? [Even if there is, I think I've probably underestimated the average lifespan of a wine glass by a factor of 20-100.]

September 10, 2007 5:55 PM  
Anonymous Anonymous said...

You lost me man. I have read fairly insightful comments from you on this website over the past few years. This diatribe is out of left field and wildly inappropriate. First, the business you are referring to is run by an all around great guy who is an asset to the business district on Beverly and in Mt. Lebanon in general. You are treading on dangerous ground. You are always talking about why you feel like an "outsider" even after living here for many years. The response to this post may clue you in on why that is. Do your homework. Find about the people you are using this forum to criticize. I understand that you may perceive this "fee" to be excessive. However, look at it from the business' perspective. Bringing one's own wine, etc. means that the house is going to lose out on any drinks you may consume. If you guess that each person may have ordered a diet coke if no alcohol was available, and you allot them one refill each, that comes out to about four dollars, which in my opinion, is highly fair. But this adolescent mentality, where you are explicitly or implicitly encouraging your readers to avoid frequenting a locally owned and operated business in a business district with a sketchy past, is totally uncalled for. You lost a reader today, my friend.

September 11, 2007 3:02 PM  
Blogger Mike Madison said...

Then so long! So far, the combined off and online response to the post has been: Two defenders of the status quo; lots and lots of people who are as astonished as I was that a local business would appear to be so indifferent to its customer appeal.

There's nothing in the post or in my comments that encourages avoiding the restaurant. I've read about what a great guy Jeff is. I've eaten at Iovino's. I liked the experience. I hope that it prospers. Mt. Lebanon needs good businesses and good restaurants.

The point of the post is to publicly encourage that valuable business asset to rethink its strategy. Price your products to attract customers. It's a competitive world. Go after the business. It's a lesson that a lot of Pittsburgh businesses could and should learn -- even while they're run by "great guys." I could fill a whole blog with example of businesses I've dealt with in Mt. Lebanon and Pittsburgh that were weirdly indifferent to customer service. My experiences might be idiosyncratic. So I used an anecdote supplied by a fried who I trust.

That said, I did look at the case from the business' point of view. Re-read the original post; re-read my comments above. The idea that a $4 per glass stem fee is reasonable compensation for losing Diet Coke business is not just far-fetched; it's bizarre. I've read a lot of restaurant industry justifications for corkage and stem fees, and absolutely none of them refer to covering lost pop business.

My guess is that defending Jeff (he's a great guy!) reflects a sincere effort to protect Pittsburgh and Pittsburghers from any criticism. That won't fly. There's a lot of good happening in the region. And there should be more.

September 11, 2007 3:58 PM  
Anonymous Anonymous said...

Mike, you operate what has become a rather successful blog that many people look to for presumably accurate information about our community, and on Sunday you ran a blog entitled "Bad for Business" in which you detailed pricing that you described as "uncommon" and "out of line". And now you plead that you've done nothing that encourages avoiding the restaurant? I must respectfully diasgree. If you're going to single out one business or another, be prepared to be accused of playing favorites or at least being unfair.

There are plenty of nice, expensive things to spend our money on in Mt. Lebanon. Those who want to, will. Those who don't, won't. We all have different means and different wants. If I've made the decision to dine out, is a $4 stem fee alone going to keep me from going to Iovino's? Of course not, because I'll pay much more to drink the exact same marked up bottle of wine at Luma, Bistro 19, etc. Mike, perhaps its the California in you, but I don't think most of us put the same time and effort into selecting a wine for a casual BYO place.

The one consensus from all of the comments, including your own, appears to be that Iovino's does a good job doing what they do - cooking food. As with all restaurants, the continued quality of the food and the demand for it will determine what the price points should be and how well it will do in the long run. I think we also all agree that we need businesses like Iovino's to make Mt. Lebanon a better place to live. Therefore, it seems to defeat these common goals or opinions if you subjectively single out what is otherwise a good business, while providing others with a hall pass.

And let's be honest with ourselves folks, dinner for 2 (or 4) and bottle of wine (or 2) will cost just about the same (+ or - a couple bucks) at any one of Mt. Lebanon's upscale eateries, regardless of the formula. I, for one, am just happy to have the variety.

September 11, 2007 6:15 PM  
Blogger Mike Madison said...

If you want more restaurant reviews, I'm happy to provide more restaurant reviews! No one should feel left out. There are lots of good places to eat in Lebo -- I have work going on in my kitchen, so I've been eating out -- and a few not so great. More later, in a regular post. This comment thread is awfully long.

And yes, I am a wine snob. (And judging from conversations with nearby friends and neighbors, I'm not alone!) That was part of an earlier comment, but I deleted it in the interest of space. As noted, all businesses have to decide which customers form their target market.

September 11, 2007 6:32 PM  
Anonymous Anonymous said...

I am very new to Mt. Lebanon and enjoy reading the blog. I left an affluent area in NJ to move here because I found the area to be more attractive and affordable in every aspect. That being said, I have been reading the blog for several months and have no problem with Madison's post regarding Iovino's cafe. I just took it as a FYI. I agree with the responses of those who believe this post will not hurt future business and I also did not perceive this post "dumbs down" the blog.

I consider Iovino's to be a neighborhood restaurant and I believe it was distinguished correctly by Madison. I have lived in Chicago and Phoenix and for a neighborhood establishment these fees are excessive in my opinion.

Yes, I am outsider looking at the blog and I feel that my point of view is objective for I have nothing to gain by taking one side or the other.

Franklin seemed to feel that another posting was unfair for Molly Brannigan's a few weeks back. Colm McWilliams CEO faced a lot of criticism and gave what I thought to be tactful reply even though he was feeling the heat from everyone, including some harsh blows from one particular individual if I remember correctly. Franklin's tone against that posting was much more strident than I believe it needed to be and the same is true here. However, I did find it refreshing that he is so vigilant to preserve merchants' reputations.

I found it astonishing that an anonymous reader just decided to cut themselves off from this blog just because of this post. Everyday we pick up a newspaper and we may not like what we read, but does that mean we should stop keeping ourselves informed of what is going on in the world? No. There is a wealth of information here and it's unfortunate that someone felt this way, but we cannot live in world in which censorship prevails. Madison simply stated the facts. I am delighted and thankful for this blog because this outlet still does not exist for many towns.

September 11, 2007 8:41 PM  
Anonymous Anonymous said...

A lot of sound and fury on this issue...Did the initial customer ever think of saying something to the wait staff about his perception that the stem fee was excessive? Normally that's all it takes to resolve a problem like this.

September 12, 2007 1:29 AM  
Anonymous Anonymous said...

I live near the Beverly Shops and and eat at Iovino's Cafe regularly. It's one of my favorite places to enjoy a great meal, and I have always found the prices reasonable.

Since everybody seems to have their own opinion about what is reasonable, however, I thought it might be interesting to quantify Pittsburgh-area BYOB fees. So I went to the Post Gazette and Tribune review web sites and dug up their lists of BYOB restaurants. After compiling the data, here's what I found.

Prices among the top-end restaurants seem to vary significantly depending on whether you have more people or more bottles. For the 4-person, 1-bottle scenario that Mike's friend described, Iovino's BYOB surcharge is the most expensive of the restaurants listed. When there are only two diners, however, Iovino's surcharge is about half that of some other restaurants.

In all scenarios, there are many BYOB bargains. About half of the listed restaurants have only a nominal fee; some have no fee at all.

Some other things to consider: First, only BYOB restaurants were included in my analysis. Even the most expensive BYOB option may be a bargain compared to buying wines from non-BYOB restaurants. Second, many of the restaurants listed by the papers are not of Iovino's caliber. That these places have lower fees isn't surprising. Finally, the data may be out of date. The PG's column was dated July 2005; the Trib's, 2004.

Cheers! --Tom

P.S. Although some commenters worry that Blog Lebo's influence might somehow reduce Iovino's business, Mike's post had the opposite effect on me. Upon reading it, I realized that I hadn't been to Iovino's recently. That very evening, my wife and I enjoyed a great dinner there. :-)

Sources:
http://www.post-gazette.com/pg/05195/537323.stm
http://www.pittsburghlive.com/pages/winerack/byob.html

September 12, 2007 3:25 PM  
Anonymous Anonymous said...

This is the type of conversation that continues to persuade many folks that Pittsburgh is and will always be a culinary backwater.

To whomever posted that one can buy wine glasses for $2 online, sure you can. I can also get a jar of peanut butter for a quarter and a can of peas for a dime. What's your point? A proper wine service would proper glasses, not the Libbeys stemware you get at Restaurant Depot.

Anybody who really thinks Mr. Iovino - or any local restauranteur for that matter - is getting wealthy from their lone establishment, get a reality check. There's a reason restaurants have high failure rates - the margins stink and you have to be a bit nuts to try something that embraces quality above the lowest common denominator.

And when you do, this seems to be the thanks one gets around here. Nice.

Iovino's quality is of a class that puts it more toward a destination restaurant than a neighborhood place. Its cuisine is the equal to many of the better downtown/Shadyside establishments. Atria's would more correctly be labelled a neighborhood place. Unfortunately there are no hard and fast rules for this type of classification. It simply falls into the "I know it when I see it" category.

Thus, as more a destination place, I'd expect to pay $10-$20 corkage in the Pittsburgh metro. My feeling is that the $4 stemware isn't out of line, but $3 might be more appropriate. The $5 corkage at Vivo is an exceptional value - more an aberration than a trend. Maybe Sam just wants everyone to bring in wine.

If you still think that's too much and there's no value Iovino provides, there's a Cheesecake Factory in Southside Works. You'll have to trade off the value of the leftovers in your doggie bag vs. the cost of parking, however.

September 12, 2007 4:12 PM  
Blogger Mike Madison said...

I actually agree with a great deal of what Rich writes, and even though his conclusion has a black-and-white, Iovino's-or-The Cheesecake Factory, character, overall his comment is more nuanced. A lot of the question comes down to matching consumers' pricing expectations to consumers' perceptions of quality and value.

Rich and some other comments take Iovino's restaurant out of the "neighborhood" category and shift it to a "destination" (higher-end) category, and if that's right, then higher prices of all sorts are usually expected. I started with an implicit premise, later made explicit, that Iovino's is closer to a (very good) neighborhood restaurant. Personally, I still think that's right (so modest corkage and/or stem fees would be fair), but understand that this difference of opinion is driving a lot of this dialogue. This isn't a case of reverse Pittsburgh snobbery; I've eaten at enough true destination restaurants (French Laundry, Jean-Georges) and enough high-quality neighborhood restaurants (Vivo, to pick a local example) to have my own personal sense of the difference. (I have never, ever eaten at The Cheesecake Factory!) I can warrant, too, that my original post was prompted by information from someone who has non-Pittsburgh dining experience that is at least equal to my own. The point isn't that corkage and stem fees are per se out of line, but that the amounts seem disproportionate -- that is, consumer-unfriendly -- in context.

Again, the market position of any business has to be viewed from the *consumer's* point of view, not the business owner's point of view. If consumers don't like a restaurant's prices, then (i) the consumers can stay away and the restaurant can prosper without them or (ii) the restaurant can change its prices and/or its products (maybe quality goes up to match the destination price; maybe price goes down to match the neighborhood quality; this can work in either direction). It's weird and wrong for businesses, even hard-working restauranteurs in a notoriously low margin business, to (iii) get angry at consumers for resisting their prices. A chef might imagine that he's in the destination business, but consumers will tell him whether or not that's right. Am I right about where this restaurant sits on the destination/neighborhood spectrum? A few commenters agree. Some disagree. There's good news in the argument: At least people are talking passionately about the restaurant!

I should add that the same issue -- reorienting retail businesses to consumer-driven business models -- applies throughout Mt. Lebanon (and Pittsburgh, for that matter). This comment thread has focused so much on Iovino's that my original point has been obscured. Jeff picked up on this earlier: This is an example of a larger issue. Serving consumer expectations is not at all purely a restaurant problem, let alone an Iovino's Cafe problem. There are far too many businesses locally that seem weirdly out of touch with what their own customers want. Iovino's Cafe, to my knowledge, is not in that category generally; its food and service and ambiance, in my experience, are very, very good. And there are additional excellent counterexamples, and I've written about some of them before on the blog. A non-exclusive list: Asti's Pharmacy. Rollier's and its service desk. Empire Music. Rich's own Aldo Coffee.

Rich makes my point, perhaps indirectly and unintentionally, with this comment regarding Vivo and its low corkage: "The $5 corkage at Vivo is an exceptional value - more an aberration than a trend. Maybe Sam just wants everyone to bring in wine."

Yes. That's it. Exactly the point!

September 12, 2007 4:47 PM  
Blogger Jefferson Provost said...

I'm the one who made the comment about $2 wine glasses. As I said in the post, I believe I underestimated the average lifespan of a wine glass by at least a factor of 20, so I think even if the glasses cost $40 each, the profit margin on stem fees is still very high.

The point of my little analysis was that, in a restaurant that doesn't actually sell wine, almost the entire stem fee is profit. In a restaurant that does sell wine, there is a reasonable justification for charging diners a fee as a disincentive for BYO.

Oh, and FWIW, I'm about the last person who would care if Pittsburgh is perceived by the world as a culinary backwater. ...And I don't even like wine.

September 12, 2007 9:22 PM  
Anonymous Anonymous said...

Things break. Often. Do I care if he's got a $15 corkage or a $3 stem charge? Nope. I only care that he stays in business if he's doing quality food. I want to encourage places like Iovino's and discourage the ethically-challenged MBA ownerships of McCormick & Schmick and similar.

Are you really proud to say you're OK with not improving the food scene here? You'd prefer to continue to give people another reason not to come and invest here?

Interesting. Why is that?

September 12, 2007 11:09 PM  
Blogger Mike Madison said...

Rich,

The straw man left this blog a long time ago. An awful lot of people, including me, want to improve the dining economy in the region and give investors lots of reasons to invest in new businesses of all kinds. I think that my record on those points is abundantly clear, both here and on Pittsblog.

Why does Pittsburgh suffer from under-investment? There are lots of reasons, but here's one that's clearly relevant here:

An awful lot of entrepreneurs locally just want to be loved for whatever it is they want to do and sell. They fail to recognize that starting and growing a business is about *serving the customer.* I used to practice law, and one of the partners I worked for repeated a simple motto: "It's a service business." Restaurants are a service business. Figure out who the customers are and what the customers want. No one succeeds by griping that their $%^&* customers just don't get it.

Wouldn't it be nice if Pittsburgh diners had a taste for a broader range of excellent cuisine, so that they recognized the quality at restaurants like Iovino's Cafe? Wouldn't it be nice if customers wanted what business owners wanted to sell? Absolutely. Does that mean that Iovino's Cafe is immune from criticism while it tries to teach Pittsburghers a thing or two about food? Absolutely not.

Instead of complaining about the criticism, turn lemons into lemonade. You know this far better than I do; this is why marketing was invented. It's what good marketing can accomplish. It's what I've seen and liked about Aldo (which is, among other things, why I keep coming back). Iovino's Cafe has the power to build a clientele that's happy to pay $4 per stem. My suggested step one: Start charging $2 per stem. Or $5 per bottle. Encourage people to bring wine.

As for McCormick & Schmich and its hiring practices (that's what I infer you're referring to with the ethics comment), I wrote about that issue when M&S arrived in town. Good for M&S. It's a much better restaurant than Monterey Bay, and I've eaten at both, even if M&S is far from a great seafood restaurant. A little real world capitalism is exactly what the diners of Pittsburgh need. As this story from New York illustrates, if you want to be a big city, you've got to play by big city rules.

Mike

September 13, 2007 8:15 AM  
Blogger Jefferson Provost said...

First, lets be clear: when you invoke the term "culinary backwater" in defense of Iovino's stem fees, you're clearly talking about the lack a fine dining scene. That's only part of a city's food scene. I think it is quite possible to have an excellent food scene without much notable fine dining. I could take you on a delicious food tour of Austin where the odds of even seeing a bottle of wine would be near zero, and the chances tablecloths at any restaurant would be less than 50-50. (But you'd get some fantastic margaritas!)

Further, I think when you talk about really significant investment of the sort the Pittsburgh needs -- things like the new Westinghouse facility in Cranberry, or the giant new Samsung chip fabrication plant in Austin -- I think the food scene is a negligible factor in the decision making. If anything, the causal arrow runs in the opposite direction: If the Westinghouse Energy executives need good restaurants nearby for entertaining clients, they will appear, as if by magic.

In any case Mike was trying to improve the food scene.

September 13, 2007 9:10 AM  
Blogger Mike Madison said...

is trying to improve the food scene.

;-)

September 13, 2007 9:55 AM  
Blogger Mark Rauterkus said...

Giggle. I don't have time to drink in all these comments. I'm sorta busy trying to make sure the county does NOT begin to charge a 'pouring tax.'

Now to really dumb-down the blog...

Humm. What tax would be applied if the county brings in a tax and it has to fit onto a 'stem charge' or a 'corking fee.' ???

Perhaps Onorato and Fitzgerald would like to make a tax on corks in BYOB establishments. The 'black market' spreads. Tax dodgers!

How much does the establishment charge if you bring in the wine in a box? Is it still called a 'cork fee?' BYOBox.

If not a box, what about a flask?

September 14, 2007 11:08 AM  
Blogger Unknown said...

Bizarre - I'd heard about the poured alcohol tax proposal, but don't think I heard how it would be collected. Would that be levied at the time of sale or on a restaurant sales volume basis? Or, has no great and greedy mind thought that far out?

September 14, 2007 4:44 PM  
Anonymous Anonymous said...

"Unfortunately Mike, this is what I was afraid of. The comment of Anon 10:04 has no basis in fact, but further criticizes Iovino's and may improperly sway folks away from Iovino's. This comment incorrectly assumes that Iovino's sells wine AND charges a stem fee on top of that. That's not the case at all. It is strictly BYO."

That makes their fee all the more outrageous. BYOB is, of course, a courtesy first and foremost. It is doubly so for a place that actually offers wine on their menu. In the latter case, it's the equivalent of allowing you to bring in food from home to eat at their table. Restaurants that both sell wine and allow BYOB are considered justified in charging higher corkage fees or stem fees to make up for the lost opportunity to sell you wine from their own list. Restaurants that don't even offer wine have no such excuse, and corkage fees at such places should be minimal, if any. In fact, while I'm willing to tolerate a MINIMAL corkage fee at strictly-BYOB establishments, I don't understand why they charge a corkage fee at all. The very small actual cost to provide a glass (and to wash it afterwards) should be more than made up for by the increased business that the BYOB convenience attracts.

September 15, 2007 9:31 PM  
Anonymous Anonymous said...

It's interesting to get 30 comments about a "stem fee" at a loal restauant and not one comment about three years of next to zero progress at the school district in respect to its stategic plan. We were told that Sable had to go at the tune of $500,000 to "save" the district and then the old-boys do nothing and are hailed as saviors. What a travesty!

The report said the staff was unhappy prior to Sable (2002)and reports that five years later nothing has been done to improve commnication, morale, the complaint process, leadership. The community was hood-winked by the politial coup that got rid of Sable to preserve nthe status quo.

Is the 7 minute board meeting the response to public apathy or business conducted behind closed doors?

September 16, 2007 5:10 PM  
Blogger Bram Reichbaum said...

Hello folks, I'm visiting from a link Mike's Burgh-wide blog. I am jealous that Mt. Lebanon has such a rich online community, but that's about it.

It sounded like Mike went out of his way on several occasions to note that he liked the food, the ambiance, and the ownership. Then came a tiny dose of constructive criticism, which was the jumping-off point for an interesting discussion of business culture.

To pile on him for being "unfair," or whatever your reasons, and warn him of "treading on dangerous ground," strikes me as small-minded and short-sighted and provincial and precious and belligerent.

This post did not turned me off to Iovanno's; I am far MORE likely to visit now, because he does seem to like the place (I'll stop elsewhere for drinks.)

However, these comments have made me somewhat LESS likely to ever move to Mt. Lebanon. No hyperbole.

When I fully establish myself, I plan on moving back to my ancestral Squirrel Hill, where we appreciate both the value of a dollar (regardless of how much we have to burn) and the value frank, well-intentioned criticism. And seemingly, we're more relaxed.

September 16, 2007 6:47 PM  

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