On-Trade: Restaurants, Bars & Hotels — The Premium Channel for Wine Producers

On-trade (or on-licence in UK terminology) encompasses all venues where wine is purchased and consumed on the premises: restaurants, bars, pubs, hotels, wine bars, and clubs. The term originates in the British licensing framework, which has historically distinguished between off-licences (retailers selling for home consumption) and on-licences (service venues). Today the on-trade channel is the focal point for premium producer brand strategy, with by-the-glass (BTG) service as the primary mechanism for consumer trial and engagement. Off-trade channels, including supermarkets, specialist retailers, and e-commerce platforms, dominate global wine distribution by volume but typically operate at lower per-bottle margins.

• On-trade venues: restaurants, bars, hotels, wine bars, private members clubs, and other licensed hospitality premises
• Off-trade venues: supermarkets, specialist wine merchants, convenience stores, and online retailers supplying for home consumption
• BTG programs allow venues to serve wines at a premium per-glass price while lowering the consumer barrier to trying unfamiliar producers
• On-trade staff, including sommeliers, wine directors, and trained bartenders, actively recommend and curate selections

On-trade is the highest per-unit revenue channel for producers because hospitality venues consistently apply substantial markups over wholesale cost. Fine dining establishments routinely mark wines up well above retail equivalents, meaning a bottle that costs a consumer thirty dollars at retail might generate fifty to seventy dollars of venue revenue. This structure makes on-trade placement commercially attractive and strategically valuable: a listing in a prestigious Michelin-starred restaurant or acclaimed hotel generates credibility that retail shelf placement cannot replicate. Producers therefore invest in on-trade relationships through sommelier education events, winemaker dinners, and preferential allocation, treating the channel as a long-term brand asset rather than a pure volume play.

• Fine dining establishments routinely achieve substantial markups over wholesale cost, significantly exceeding typical retail margins
• On-trade placements in prestige venues signal quality to trade buyers, press, and consumers in a way shelf presence does not
• Positive on-trade experiences frequently drive retail purchasing: consumers who enjoy a wine at a restaurant often seek it out at retail
• Distributors prioritize on-trade account management because reorder frequency and per-case revenue often exceed retail accounts

Off-trade retail dominates global wine distribution by volume and, according to market research, accounts for roughly three-quarters of total wine distribution value. On-trade channels are nevertheless projected to grow faster, with analysts forecasting a CAGR of approximately 3.7 to 9.8 percent through the early 2030s, driven by the recovery of hospitality after the COVID-19 pandemic, the expansion of urban dining culture, and the increasing appeal of experiential consumption. The two channels serve distinct consumer needs: off-trade emphasizes price transparency, convenience, and selection breadth, while on-trade prioritizes curation, expert guidance, and the broader dining or social experience. Premium and fine wine producers typically pursue on-trade placement first, using it to establish credibility before scaling into retail.

• Off-trade accounted for approximately 77% of global wine distribution value in 2025, with on-trade representing the remainder at higher per-unit revenue
• On-trade channels are projected to grow faster than off-trade through 2031, driven by hospitality recovery and experiential dining trends
• Sommelier and wine-director recommendations drive on-trade selection; price, packaging, and shelf placement drive off-trade
• Natural wine, emerging regions, and small-production bottlings rely disproportionately on on-trade for initial market credibility

BTG service is the operational mechanism that gives on-trade wine its strategic importance for producers. A restaurant with a narrow BTG list provides limited producer exposure; a wine bar with thirty to fifty BTG selections creates meaningful sampling opportunities across styles, regions, and price points simultaneously. Preservation technology has transformed BTG economics in the past two decades. Enomatic, the Italian wine dispenser manufacturer founded in 2002, was the first company to industrialize automated wine dispensers, using argon or nitrogen gas to prevent oxidation and allowing venues to hold multiple open bottles profitably. Coravin, founded in 2011 and commercially launched in 2013, introduced a complementary approach: a precision needle passes through a natural cork, argon gas replaces the extracted wine, and the cork reseals naturally, meaning the bottle can remain uncompromised for months or even years.

• Enomatic was founded in 2002 in Tuscany, Italy, and was the first company to industrialize a commercial range of wine dispensers; its systems are now present in over 73 countries
• Coravin was founded in 2011 and launched commercially in 2013; its argon-gas needle system preserves wine without removing the cork, enabling venues to serve rare or expensive bottles by the glass
• BTG preservation technology, from inert gas dispensers to needle-through-cork systems, has significantly reduced oxidation waste and expanded the commercial viability of wide BTG selections
• Sommelier discretion over BTG rotation directly influences which producers gain consumer trial and which wines build momentum in a market

Leading producers treat on-trade as a brand-building investment, particularly for prestige or limited-production bottlings. Burgundy producers and négociants prioritize placements in Michelin-starred restaurants in Paris, Tokyo, London, and New York, leveraging the sommelier recommendation as an authoritative third-party endorsement. Emerging regions including Ribeira Sacra, Jura, and the Canary Islands have relied heavily on sommelier-curated on-trade lists to build recognition before achieving meaningful retail distribution. Prestige Bordeaux estates and Champagne houses maintain allocations for luxury hotel fine dining as a means of controlling brand positioning. Distributors often employ trade managers or certified sommeliers to educate wine directors, secure BTG placements, and build account-level relationships that translate into sustained reorder volume.

• Prestige Bordeaux and Burgundy producers prioritize Michelin-starred and luxury hotel placements to anchor brand positioning at the highest price tier
• Emerging region producers, including those from Jura, Ribeira Sacra, and natural wine styles, use on-trade sommelier endorsement to establish credibility before entering broader retail
• Producers often support on-trade accounts with winemaker visits, staff tastings, and exclusive allocation access to secure and retain BTG placements
• The on-trade-to-retail flywheel: prestige venue placement builds consumer familiarity, which supports retail sell-through and justifies premium pricing

The professionalization of sommelier training since the late twentieth century has elevated the rigor of on-trade wine curation and increased the barrier for producer entry into premium venues. The Court of Master Sommeliers, established in London in 1977, administers a four-level certification program culminating in the Master Sommelier Diploma, the hospitality industry's most demanding credential. As of 2025, approximately 293 people globally hold the MS Diploma. The path typically takes five to ten years of dedicated study and practical experience. WSET, founded in 1969 and headquartered in London, is the world's largest provider of drinks qualifications, enrolling approximately 134,000 candidates across its programs in the 2023-24 academic year in over 70 countries. These credentialed professionals research producers, conduct structured blind tastings, and curate wine programs with authority that shapes purchasing behavior at scale.

• The Court of Master Sommeliers was established in London in 1977; the first MS examination was held in the UK in 1969; approximately 293 people globally hold the MS Diploma as of 2025
• The MS Diploma examination historically features a pass rate below 10%, maintaining the credential's exclusivity and the gatekeeper role of those who hold it
• WSET, founded in 1969, enrolled approximately 134,000 candidates in 2023-24 across more than 70 countries, its second-highest annual figure ever
• Certified sommeliers and wine directors at top establishments make BTG and list selections that influence producer trial rates and shape broader market perception