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Cameron Hughes wines are sold exclusively at Costco.

To find Cameron Hughes great wine deals, you either have to shop at warehouse chain CostCo or buy direct from Hughes' Website.

California (State Appellation)

Cameron Hughes: The resurrection
of the American négociant

An interview with Cameron Hughes reveals the success of the négociant method of wine sales: great wine lots at attractive prices.

by Alan Goldfarb
September 11, 2007

Cameron Hughes saw an opening and he seized it. Stepping into the breach of an oversupply of grapes – and purchasing wine sourced from good vineyards from some of the best regions of he Napa Valley, Dry Creek Valley, Barossa, Priorat and France, Germany and Italy – the 36-year-old San Franciscan has reinvigorated the concept of the négociant in the U.S.

Carrying on the tradition of the négociant or wine merchant, known mostly in Beaune, Burgundy as practiced by Joseph Drouhin and Louis Jadot, Hughes is trying to revive and perhaps bring back respect to a profession brought to the fore in this country in the 1950s, by the likes of Frank Schoonmaker and Alexis Lichine.

Only this time, unlike his American predecessors, Hughes is also concentrating on unwanted or heretofore unsold wine made in the domestic market. Of which apparently there is an abundance including from the prestigious Napa Valley.

Hughes learned the business from his dad, who is with the Wine Group, one of the country’s largest wine companies. Hughes sells his various wines as something he calls his Cameron Hughes “Lot Series” that have not, he claims, been “back blended.” That is, lesser quality wine or wines from other regions have not been blended to improve quality or to “fix” possible flaws.

Single appellations, Hughes insists, are important to maintain the quality and the uniqueness of his wines.

Hughes, a cunning businessperson, has cut a deal with warehouse superstore chain, Costco, with whom he sells his wines exclusively. However, he told APPELLATION AMERICA that he will soon begin selling his wines – that range from $8 to $21 - at various other locales.

ALAN GOLDFARB (AG): So, your focus, as you say on your Web site, is to “rescue” high-end, small-availability lots. In other words, you deal in the spot market. How do you do this?

CAMERON HUGHES (CH): The idea of rescuing them is that they are often back blended into cuvees of lesser quality stuff. We only blend like-quality with like-quality. And buying (already) made wines, we’re a pure négociant company.

Cameron Hughes sells most of his “Lots” to Costco where its members get wine at bargain prices.
AG: Where and by whom are the wines put together?

CH: We bottle in Mendocino, Geyserville (Sonoma County), Lockford (Lodi) and in the future, we will be at the Napa Wine Co. (Oakville). We have four California “winemakers” and two from Australia. What separates these guys from the pack is that they have a long history of sourcing vineyards and cobbling blends together.

AG: Then you do “stylistic blending,” as you describe it.

CH: We try and take a wine and make it better, elevate it through blending. (But) some wines are complete by themselves.

AG: What about appellation or terroir? You do some blending; doesn’t that mitigate terroir?

CH: You won’t get a wine with the same clones, rootstocks, or barrels. We take each component and we will blend them separately. Through blending, a lot of the magic happens. That said, we’re not blending wines from Lodi with wines from Napa. I don’t think you get distinctive product that way.

AG: But what about the terroir, the distinctiveness of Napa, for instance? What is the terroir of some of the vineyards from which your wines come?

CH: I have not dug around in those vineyards and explored them. I can’t tell you what those soil structures are. (But) I think it’s more about climate.

AG: Why not dig around in those vineyards?

CH: We’re going 110 miles an hour here. I’ve got a good sense of what a lot of these wines taste like. But I haven’t dug into the terroir issue.

AG: What about Napa. Some of us have known that there is plenty of fruit out there going unclaimed, but to what extent?

CH: Napa Cabernet Sauvignon is our best seller in Costco.

AG: Tell me about those Napa Valley vineyards and who are some of the growers?

Lot 31 CH: I can’t tell you, but our Yountville Cab is very different from our Rutherford Cab. Yountville is more Bordeaux, it's coffee, mocha, dark, more tannic, but it has good structure and acidity to age better than the Rutherford does. When it gets ripe, instead of being fruit-driven like Rutherford, it’s more color driven and is like crème de cassis. Rutherford has brighter fruit, softer tannins, is broader in the mouth. Fruit-wise, it’s bigger (than Yountville), but structure-wise, it’s not as big as Yountville.

AG: Is the key for you to sell direct? None of your wines are more than $21, yet they comprise some apparent high-end growers.

CH: It‘s not the key. We’ll soon begin to branch out and we’ll continue to work the traditional retail channels and through our mailing list.

AG: How can you not charge more than $21 for a Napa wine when the average price of a Napa Cab is $50? What are some of the prices you pay for that wine?

CH: (Our) Napa Cab is $7-8 gallon [Note: There’s 2.4 gallons in a case]. We pay about $60 to $70 a case from Rutherford and Yountville.

AG: How many cases do you produce?

CH: We sell about 70-80,000 a year to Costco. We’ll more than double that next year to the 140-150,000-case range, assuming we can source all the wines we need. ‘06 is not a particularly long harvest.

AG: How competitive is this business?

CH: For Napa Cabernets, it’s moderately competitive. There is a lot of ‘05, and I’ve lost several wines I would have really, really liked to have under my labels.

AG: What about your deal with Costco?

CH: I own the brand but we work very closely with them. At some point soon, the project will move outside of Costco. I can’t reveal too much, but we’ll take it to other stores and develop other brands with other challenges. Costco doesn’t want to represent more than 40 percent of any one brand. We work on a wine-by-wine contract basis and I don’t do anything without their OK.

AG: Most Americans don’t know the word, “négociant.” To those that do, the concept has a negative connotation. You know, you don’t make the wines, you don’t own your own vineyards, and you don’t have a winery. In fact, you’re based in San Francisco. How do you spin that?

CH: We know the wine business is very inefficient … our model is that many people have their hands in it along the way. We’re proud of it (being a négociant). We feel it gives us a better business model, it’s a better way to make wine.

AG: Why did you get into the spot market and didn’t become a winery owner? Do you have plans to?

CH: We’re running up against the point where it may make sense for us to invest in a small bottling and storage facility, Lot 35but right now there’s quite a few resources coming online and there’s plenty of bottling space. Do we want to get into the winemaking business? Down the road, we probably have to, making small lots of high-end stuff. As we look at ’07 though, the fruit set looks huge. I’m not in hurry to get into the winemaking business. For the next couple of years there should be plenty of wine. I do see some potential though on the horizon.

AG: How did you get into this business? Wasn’t your father in the business?

CH: Yes, my dad suckered me into the wine business. I was at Corbett Canyon. After working at the winery, I said, “Forget it, this is not for me.” It wasn’t interesting. I saw the winemaker who sat behind a desk and tracked charts all day. There was none of the romance.

The defining moment was when I was working at an import co

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