Santa Rosa Press Democrat
The negociant
By VIRGINIE BOONE
FOR THE PRESS DEMOCRAT
Cameron Hughes didn't have a job or a lot of money when he set out to become a wine negociant back in the about-to-be-depressed year of 2001. That was when he bought his first 500 cases of already-made Napa Valley cabernet sauvignon, put his own label on and started selling the wine to local retailers out of the back of his car.
It was tough going but Hughes raised some money, bought some more wine and kept selling. But things got worse before they got better and before long he was forced to put the company into hibernation.
Until Sam Spencer came along. The co-founder of Hayes and Vine Wine Bar in San Francisco as well as a winemaker just starting his own winery, Spencer Roloson, in St. Helena, Spencer approached Hughes in 2002 with a batch of Lodi syrah he was looking to unload — great wine that just didn't fit into his increasingly Napa-focused program.
“That was the catalyst,” Hughes recalled. “We said, wow, there's an opportunity, there are all these little wines out there.”
Newly invigorated, the indomitable Hughes maxed out his credit cards and borrowed money from his dad and his dad's friends in order to buy the wine, get it bottled and labeled, Cameron Hughes Wine Lot One. Then he called Costco.
“I got the Costco guy on the phone and said, look, this is legit, awesome wine made in Radoux French oak. It's gorgeous, it's properly made,” Hughes detailed. “I guarantee you'll buy it and if you don't buy it I'll never call you again.”
Costco bought it, all that Hughes had. It began a remarkable business relationship whereby Hughes would put a tank sample of wine in front of Costco, and if they liked it they'd give him a purchase order. Hughes would take the purchase order to the bank, the bank would give him some money and he'd go back and buy the wine.
The success of this model has made Hughes a king in the value-wine business, his wines sought after by both those on a budget and those who like a good bargain, which is not always the same thing.
Hughes's tenacity has played a huge part. He and wife Jessica Kagan Hughes have literally grown Cameron Hughes Wine from the ground up, standing in front of a small table in the early days at area Costcos, hand-selling their wine.
“Nobody knew us, so Cam would grab a table, stand in front of the wine section and talk about it,” Kagan Hughes recalled.
It was exhausting, but it worked and gave them invaluable insight into what people liked and didn't like — feedback that was at times immediate.
“I had people who would buy a bottle of wine and go out in the parking lot, taste the wine and come back and buy cases,” Kagan Hughes added. “All the time.”
Hughes remembers a man in Mountain View whose favorite dish was spaghetti and meatballs. He'd come into Costco, buy a bottle of Cameron Hughes Wine, go out to his van, see if the wine went well with spaghetti or not and, when it did, come back in and buy some more.
Cameron Hughes Wine has been off and running ever since, a successful negociant brand with wines from all over the world sold not only at Costco but also at Safeway and independent wine shops as well as direct.
(A negociant is someone who assesses and buys wine that's already made, blends it into his own concoction, then bottles and sells it under his own label.)
The business has worked because they're in many cases buying wine that others would try and sell for, say $60. Because they don't own any infrastructure, Cameron Hughes can sell the same wine for $20 or often less.
“We knew from our experience what wine actually costs to manufacture and what we were willing to sell it for and what it ended up as it went through the three-tier system,” Hughes explained. “Wine we could sell comfortably direct to Costco for $9.99 would end up being $25 through the three-tier system because everything gets amplified on a percentage basis.”
What Hughes means by the three-tier system is the usual way a winery will legally have to sell its wine to a distributor, who will then sell it to a retailer or restaurant, who then may sell it to a consumer. In many cases it's the only way a winery is allowed to sell its wine, a way that ultimately means less money going to the winery than when they can sell their wine directly to a consumer.
After years of figuring things out on his own, earlier this year Hughes named his old friend Spencer director of winegrowing for all Cameron Hughes Wines, a role overseeing production of now nearly 300,000 cases a year.
He and Hughes work from an office in Calistoga; the wine is stored and bottled at Coppola Winery's facility in Geyserville.
Spencer's hiring has to do with Hughes's aim to evolve as a company and improve the quality of his wines overall, to forge better, longer-term relationships with growers and producers so that his wines will have more consistency from year to year.
“We've been a spot-market purchaser of wine, but now there are a lot of people that want to partner,” Hughes explained.
“What I can't do is go out and buy grapes at $6,000 a ton, make it into wine and sit on it for two years. But if I can partner with a grower, they know they've got a contract and together we turn it into wine, we share some of that financial burden.”
Spencer added, “We have more opportunities coming our way, people are realizing that if they come to us it's not bottom-feeding.”
Still, that doesn't mean they're turning their backs on the bulk wine they can turn into inexpensive bottles that will ultimately sell at places like Sam's Club, where prices are especially low.
Kagan Hughes, now the company's chief marketing officer, knows that many in the wine industry might pooh-pooh the notion of selling at a discount chain, but sees it as a chance to introduce new people to wine.
“You can get in front of customers who wouldn't otherwise be into wine,” she said. “You can surprise and delight them in a spectacular way. These customers are different from the customers who buy the $20 bottle of wine, but they are dying to be taken through the wine journey.”
Virginie Boone is a freelance wine writer based in Sonoma County. She can be reached at virginieboone@yahoo.com or visit wineabout. blogs.pressdemocrat.com.