[Mary and I attended a Cameron Hughes wine dinner this week. The dinner was sponsored by The Tasting Room in City Centre. We enjoyed meeting Hughes and are fascinated by his story of success born of necessity. We hope you’ll enjoy his life story as well.]
A négociant is the French term for a wine merchant who assembles the produce of smaller growers and wine makers and sells the wine under his own label. Some of the best known négociants in France include Bouchard Père et Fils, Louis Jadot, Joseph Drouhin and Georges Duboeuf. A young California wine merchant has now adopted the ancient business model of European négociants and has applied that model to the U.S. wine market.
Cameron Hughes became an American négociant by necessity, not by choice. He began his career as a low-level employee at Corbett Canyon in California. He quickly realized that he was more interested in wine sales than in wine producing. He left to work for a French wine importer where he was introduced to the ancient tradition of wine négociants.
When his employer went out of business, Hughes decided to try his hand at wine sales. He bought 500 cases of Napa Valley cabernet, found someone to bottle it under his own label, and began selling the wine out of the back of his Volvo station wagon. Hughes soon learned that the biggest enemy of wine merchants is inventory carrying costs. Bankruptcy loomed on his horizon. Then, in 2004, his fortunes turned. Hughes learned, by necessity, that he could sell his wine even before he purchased the juice.
Hughes found a Syrah from the Lodi region of California that he could buy and sell for approximately one-third the price being charged by other wineries. Instead of buying the wine, he took samples to Costco and offered them the exclusive opportunity to sell the wine for a retail price of $8.99 per bottle. The Costco buyer said “I’ll take everything you have.” By arranging to sell the wine before he bought it, Hughes defeated the financial monster known as inventory carrying costs.
Hughes agreed not to disclose the name of the source vineyard for his Syrah so he labeled his wine “Cameron Hughes Lot 1”. Hughes became a self-described “carnival barker” at San Francisco-area Costco stores. He urged customers to try his Lot 1 and they did. What began as a risky experiment soon became a wildly successful business model.
Hughes grew his business from a few Lots in 2004 to approximately 80 to 100 Lots in the past year. He doesn’t own a vineyard. He doesn’t own a winery. Instead, he travels the world looking for opportunities to buy good wine at bargain prices. He buys wine that other wineries sell for $85 per bottle and sells it himself for $15. His goal is to bring quality wine to the market at affordable prices.
His nimble business model allows him to take advantage of worldwide climate and currency fluctuations. “When I saw the 2011 weather patterns in California, I bought up all the 2009 and 2010 juice I could find.” Now that the U.S. dollar is stronger against the Euro, Hughes is being offered opportunities to purchase French, Spanish, and Italian wines that did not make sense for his business model a few years ago. “I’m spending a lot of time these days in the Rhone Valley.”
When asked which wine is his favorite, he provides the politically correct response: “They’re all my children.” When pressed, he admits that Lot 285, a Cabernet Sauvignon sourced from the Rutherford area in the Napa Valley is one of his favorites. His wife and business partner, Jessica Kogen, has a favorite as well. “She really likes Lot 319, the 2011 Moscato D’ Asti from Italy.” When asked which of his wines do best in Texas, Hughes says, without hesitation, that “Texans like big, rich, full-bodied reds. My Napa cabs and California zinfandels sell well here.”
Cameron Hughes wines are now sold in over 40 Houston-area wine stores. If you have a favorite Lot number, you can find the wine by using the Cameron Hughes Wine Locator.