24 Nov de Negoce: A New Model for Selling Wine
More than one winemaker has shared with me a piece of advice they were told when starting their wineries. “Making wine is easy, selling wine is not” is what I am told time and again. Making wine may be easy but in order to make it, a financial investment is required. And yes, then you have to sell it. Cameron Hughes may have found a new model for selling wine. It is not really a new model but he is applying a traditional model for high end wines to bulk wines which I wrote about in the Napa Valley Register and share here.
The joke in the wine industry is that it takes a large fortune to make a small fortune. Planting, growing, harvesting, and making wine requires a lot of time and money. And to grow and invest in new barrels, tanks or other supplies requires more money. All this money is required upfront before you can sell a single bottle. But the French have devised another way to sell a wine called en primeur.
En primeur (“in their prime”) is the French wine term for wine futures. In regions such as Bordeaux and Burgundy, wine is bought while it is still in the barrel. En primeur offers an opportunity to buy sought-after vintage wines, as well as buy them for less than what they will cost when released.
This concept of selling wine before it is bottled is the model for Cameron Hughes’ new project de Négoce Wines.
Cameron Hughes has been a negotiant in the wine business for two decades. Realizing there was high-end wine available on the bulk market and with Costco interested in purchasing it, he created Cameron Hughes Wine. At one point he was producing 360,000 cases under that label. But with the increased production came the increase in money spent and in 2015, he sold the label to Vintage Wine Estates.
Since 2015, Cameron Hughes launched the Holy Grail Company, making restaurant-quality meat available to the consumer. But last fall, after looking at the wine business and trends, he decided to launch another label. He recognized that there was a structural excess of wine. With restaurants closing, there was a lot of wine inventory. Cameron could take the wine off the producer’s hands, as he had done with Cameron Hughes Wines, but this time he knew what he had to do. He had to have cash flow. The idea is to sell the wine to the consumer before he buys it from the producer. In essence, Cameron has taken Bordeaux’s en primeur model and applied it to the bulk wine market.
In May, Cameron Hughes launched de Négoce Wines.
This is how it works: Cameron finds high-quality wine on the bulk market; he then offers almost all that wine to his customers for an incredible price. The customers must place orders by the case (12 bottles) but can order as many cases as they want until the offer is sold out. He will also hold back a certain amount of each wine which he can sell later for 20-30 percent more.
At this point, Cameron has collected the money. He pays the producer, buys the bottles, fills them, and then ships them to the customer. As these wines have just been bottled, the aging of the wines will be handled by the customer, not the winery.
Currently, Cameron has released 34 lots and has 77 more wines in the pipeline. The lots generally range in 400–500 cases, while there are a few larger production lots of 2,000-3,000 cases. Cameron estimates to have close to 100,000 cases of wine in bottle by the end of the year. And next year, Cameron intends to start at the production level, working with a custom crush to make the wines he wants.
De Négoce Wines is all about values. Hughes is purchasing wine from top producers in Napa and Sonoma and selling wines for what will seem like a steal.
2019 de Négoce “No. 16” Sauvignon Blanc, Sonoma County
This Sauvignon Blanc was sourced from two producers, one in the Russian River and one in Sonoma Mountain. One lot was barrel fermented in 30 percent new oak and one lot was fermented in neutral barrel and concrete eggs. The final blend has lots of citrus notes and great acidity. The wine costs $108 per case ($9 per bottle).
2018 de Négoce “No. 12” Chardonnay Napa Valley
Sourced from the west side of Oak Knoll, this Chardonnay has lots of citrus and tropical fruit notes. It is crisp with lots of acidity and salinity on the finish. While this wine would typically cost $40, it costs $108 per case ($9 per bottle).
2018 de Négoce “No. 09” Pinot Noir, Carmel Valley
Sourced from the Carmel Valley, but from the cooler end closer to the ocean, the Pinot Noir is young with notes of red fruits and herbs. It is juicy with good acidity. The wine costs $108 per case ($9 per bottle).
2018 de Négoce “No. 32” Cabernet Sauvignon, Dry Creek Valley, Sonoma
Sourced from the Dry Creek Valley, this wine had only been in the bottle for two weeks before I tasted it. It is young with cherry, cola, spice and some green notes and smooth tannins. Regularly selling for $50, these wines cost $144 per case ($12 per bottle).
2017 de Négoce “No. 02” Cabernet Sauvignon, Napa Valley, Napa
The wine was sourced from the Stagecoach Vineyards and Cameron finished the blend of this wine, adding Cabernet Franc, Merlot and Petite Verdot. Dark red fruit aromas with almost a candied touch and a hint of herbs, this wine has fine tannins and good acidity. Retailing for $90, the wine costs $180 per case ($15 per bottle).
2018 de Négoce “No. 40” Cabernet Sauvignon, Diamond Mountain District, Napa Valley
A fruit-forward wine with dark fruit and leather notes, this wine is still very young with grippy, drying tannins and a fresh finish. Originally retailing for more than $100, this wine costs $216 per case ($18 per bottle).
Cameron Hughes believes in the future of this model for selling wine and he stands behind his name. It is a model that helps everyone from the grower to the producer to the consumer. If you trust him, you can assume you are getting wines from a great grower at a reduced price. These are wines for the bargain seekers and the high-end buyer who knows good value.
You can only purchase de Négoce wines via e-mail offers, which you can get by subscribing at www.denegoce.com. If you see something, act on it, because offers are limited.
Read the original story in the Napa Valley Register.