1. CAMERON HUGHES; NEGOCIANT PAIRS VALUE WITH QUALITY
2008 LOT 200 CABERNET SAUVIGNON NAPA VALLEY
It's a good time to be a negociant. There's plenty of wine out there and people are looking for a deal.
Cameron Hughes did stints with a large wine company and with a negociant before he was fired in 2000. "Best thing that ever happened to me," he says.
That's when the lot concept was born. Hughes and his wife Jessica Kogan started a company together, incorporating in October 2001. Cameron Hughes would purchase small lots, assign a number to each, and sell each lot until it sold out.
"We knew enough to be dangerous," he remembers. "We knew there were these small lots of high-end wine out there if we could just get someone to commit to buying the wine before we bought it."
At first, the concept didn't fly with the large grocery chains but a buyer at Costco took notice. Hughes says he was the right guy in the right place at the right time. Lot #1 was 1,800 cases of Syrah from Lodi made by Sam Spencer, now Hughes' winemaker. Cameron and Jessica then hand-sold the wine at Costco, and the model took off. By 2005, the company would sell 18,000 cases of wine.
Along the way, a financing deal with Bacchus Capital in 2007 fueled an expansion. Last year, Cameron Hughes produced more than 250,000 cases and continues to grow. Cameron Hughes wines are now also found in Sam's Club and Safeway as well. DTC sales via the web are growing and will likely reach 40,000 cases this year.
The business model continues to evolve and Hughes has been partnering with vineyard owners and wineries with excess capacity. Contracts pair Hughes with a grower and winery with wines made to specifications. Cameron Hughes' winemakers oversee the process. The concept is a fit for wineries with relatively healthy balance sheets that can take a percentage of their fruit portfolio and dedicate it to a program where payments are stretched out for a longer period of time. The upside for wineries is it helps them cover their overhead.
Cameron Huges made 80,000 gallons of Old Vine Lodi Zinfandel this year, as well as hundreds of thousands of gallons of Chardonnay from the Santa Maria area, with fruit and spot market buys in the Cameros region and elsewhere.
The Cameron Hughes Lot 200 Cabernet really opens up when you pour it, and as Hughes puts it, "is from an A-plus, plus, plus player in Napa." Ten years of business and 200 wines represent a benchmark. It's also Hughes' most expensive wine to date, with a purchase price just under $30. Seven thousand cases were produced.