When the economy spiraled downward in 2008, Cameron Hughes found himself in the right place at the right time.
Hughes had spent the previous seven years building a business and a reputation as a modern American negociant: a broker who buys surplus wines from producers and sells them under his own name, a practice common in Europe. His background was in the bulk wine industry. He started as a cellar rat at Corbett Canyon, a popular inexpensive label, in the late 1990s, then worked for the Wine Group, where he collected and disposed of boxes of Franzia wines that had passed their freshness dates. When he went into business for himself in late 2001, he looked for higher-quality wines that he could sell under the bulk-wine model.
A winemaker he knew had some syrah from Lodi, Calif., that his East Coast distributors wouldn’t take a chance on. Hughes bought the entire production of two vintages at half-price. Another winemaker was stuck with wine he had produced for a client who defaulted. Hughes bought that as well. Those became Cameron Hughes Lot 1 and Lot 2. He sold them to specialty retailers in California out of the back of his Volvo for about half the price they’d been intended to fetch. Then in 2004, he struck a four-year deal with Costco that gave him national distribution in addition to online sales.
From the beginning, the hallmark of the Cameron Hughes line of wines has been his refusal to disclose the producer’s name. Hughes signs confidentiality agreements that preserve a winery’s anonymity. After all, a producer of a $40 Napa Valley cabernet sauvignon doesn’t want his customers to know they can get a nearly identical wine from Hughes for $25. Yet the winery might need to move out surplus inventory, generate cash flow or make full use of capacity, a win-win-win situation for the producers, consumers and Hughes.
“In essence, we are a true European negociant company,” Hughes tells me during a recent visit to Washington from his home base in San Francisco. He’s a gregarious 40-year-old salesman, knowledgeable about his product and confident that the quality of his wines does most of his sales work.
During those first seven years, Hughes and his wife and business partner, Washington area native Jessica Kogan, found enough lots of wine to build their brand. When the economy collapsed in late 2008, business boomed.
“The recession was a door opener for us,” Hughes says. “Suddenly there was more supply, as consumers focused on value rather than luxury and prestige.” The name of a wine became less important to customers. Wineries, wanting to protect their reputations, were reluctant to sell their own labels at deep discounts, yet they needed cash flow. It was a perfect buying opportunity for Hughes.
This year, Cameron Hughes Wine will bottle 120 wines, for a total of 400,000 cases. The friend who produced Lot 1, Sam Spencer, is now a partner and full-time winemaker for the company, which operates out of a winery in Geyserville, in Sonoma County. The California wines are in national distribution. Hughes also sells seven French wines he acquired through European brokers; those are available only online. Online sales, without distributors, help keep the margins low so Hughes can maintain consistently low pricing throughout his portfolio.
Consumers, of course, have no way of proving that a wine Hughes sells for $15 should have cost them $30. But the wines are indisputably of high quality, and they cover a variety of styles.
“We’re a boutique wine seller with a highly curated selection,” Hughes says, allowing his marketing persona to take control for a moment. “As long as it’s balanced and not blowing off alcohol at you, we’ll buy it.”
He swirls his glass and takes a sniff of Lot 280, a 2009 chardonnay from Arroyo Seco in Monterey County, south of San Francisco, fermented and aged primarily in American oak. It’s a throwback to the old California style of chardonnay, with buttery oak and coconut flavors. “This is our best-selling chard. People love this stuff,” he says. “The ’90s are back with this one.”
Ah, the good old days.