Buying by the Bottle
Hot spots across the country are copying New York and Miami's hyper-expensive "bottle service." Barney Gimbel explains why clubs are clamoring to let you play bartender.
(FORTUNE Magazine) - Up the stairs and past the velvet rope at the Vapour Lounge not too long ago, Michael Jordan was just one of the many smartly dressed folks clinking glasses with friends on the suede couches and chairs. Three stories below, through the open atrium, a deejay spun records next to the club's dance floor and 50-foot arched ice bar. But upstairs you couldn't even think about ordering a shot. The cheapest drink on the menu was a $125 bottle of Absolut. Bottles of Dom Perignon were $300.
New York City? Miami? Las Vegas? No, Indianapolis. Come again? "People here want to feel special too," says Kyle Gilliatt, the club's manager. "I'm not just selling a bottle of vodka, I'm selling exclusivity."
Since Vapour opened two years ago, Gilliatt says, six other nearby clubs have started offering bottle service. In fact, VIP lounges that serve booze in bulk are all the rage at nightclubs in more than 15 cities nationwide, ranging from Chicago to Milwaukee to Orlando to Toledo. (They've been de rigueur in New York and Miami for nearly a decade.) "People are not quite used to it here in Toledo," says Ahmed Dia, the owner of Club Rain, Toledo's first bottle service establishment. "But it's a big hit in Columbus."
Here's how it works: You go to a lounge and sit in a couchlike seat at a cocktail table in a section typically separated from the rest of the club. You order by the bottle, and if menus are any measure, the emphasis is typically on vodka and champagne. (Ordering by the glass is against the rules.) With the bottle come glasses, ice, and mixers of your choice. You pour. And depending on the city, that same 750ml bottle of Grey Goose vodka that goes for $30 at the liquor store could set you back anywhere from $145 to $500. (Cristal or Dom PÃ©rignon champagne can top $1,000.)
What's happened in the past few years is a kind of reeducation of clubgoers. "People who want to live the lifestyle they read about in Us Weekly don't just live in New York City or L.A.," says Andrew Fox, CEO of clubplanet.com, an online nightlife guide. "And club owners have finally figured that out."
From a business standpoint, do-it-yourself libations are a no-brainer. "If you figure I'm buying a bottle of Grey Goose for $26 and selling it for $350, that's a hell of a lot better than getting maybe 20 drinks out of that same bottle behind the bar at $10 a glass--and when people pour drinks themselves, they tend to pour much stronger than the bartender," says Jamie Mulholland, who runs Cain, one of New York City's most exclusive lounges, where the average check ranges from $5,000 to $8,000. Across the country, perks for patrons can include getting to jump the line outside and VIP seating. And for the biggest spenders, it's not uncommon for club staff to make introductions to women at the bar.
Still, who in their right mind would ring up a $1,000 tab in a few hours? In places like Indianapolis or Boulder, there's a mix of locals, traveling executives, and celebs who happen to be in town, while on the coasts you'll find groups of I-bankers and hedge fund types (as well as boozing starlets--though they often don't pay). At Cain, Mulholland says 60% of the bottle business goes straight on a company card.
For liquor companies the bottle movement is a mixed blessing. Some companies--notably Louis Roederer, which produces Cristal--have fueled clubgoer demand by severely restricting the number of bottles any one hot spot can buy. Unestablished spots simply can't get their hands on Cristal, while other clubs work their way up the supply chain (Cain gets two to three cases a week). But privately, other liquor industry insiders fret about a potential "image problem" surrounding a trend that involves a way to get very drunk very fast.
Regardless, you won't find customers--on the coasts or otherwise--complaining. "Out-of-towners love it because we only charge $145 for Grey Goose" in Indianapolis, says Vapour Lounge's Gilliatt. "They say that it's a bargain."