![]() ![]() Many negociants or other businesses buy wine from wineries that they can’t sell at a lower price for branding purposes – and that model seems to be in play here as well – is it different and why? My experience working at The Wine Group showed the inefficiencies and trust costs of wine production, even for luxury wines. How did you initially assess out how to cut costs? I sold the company to Vintage Wine Estates in 2017. They bit and the company exploded, expanding to all Costco regions, then broad distribution in 40+ states to a variety of Chain and Independent retailers all the while adding a robust Top 3 Direct-to-Consumer (DTC) businesses. Two years later, after working the bulk market for high-quality small lots, I approached Costco with a deal – I would interface them with these little needle-in-a-hay-stack gems, allowing them to taste the bulk samples prior to bottling and commit to the inventories based off the bulk sample. Into business I went, bottling up 500 cases of wine and starting to sell it out of the back of my car. ![]() ![]() I liquidated my wine collection I had amassed over years of collecting and my father matched my funds. However, various health events led ownership to decide to wind down the business, but I had learned enough to be dangerous. A light bulb went off in my head that, with our direct model, we could really provide exceptional value in the marketplace. I researched and found bulk wine brokers and a bottler, tasted some excellent bulk wines, and showed them all the costs to produce high quality “bulk” wine. As a team we decided to invest in the licensing and broker network to efficiently sell to retailers.Īfter a year working there, the ownership (tech execs convinced the three-tier system was broken) felt that their import portfolio needed some domestic wines and asked me to explore buying and bottling our own California wines. In 1999, I left my regional sales manager position at TWG to work as first employee and GM for a start-up French wine importer and negociant (in the sense that they were putting their own blend together at various Domaine and Chateau), and I saw first-hand the ex-cellars and landed costs of a case of wine from Europe and realized that a wine landed for $3 ended up being sold for $15+ due the “three-tier” system (which is actually 4- or 5-tier when you factor in importer, wholesaler, retailer and then the layers of sales people and administration needed to navigate those layers). Since then, lean-and-mean, efficient paths to consumer have always been my passion. In both my state and regional management positions I got to see first had the actual costs of production and all the markups and associated programming costs of getting a case of wine into the consumers hands. I was much better suited for marketing and selling, however, and I quickly rose through the ranks of the parent company, The Wine Group, whose lean-and-mean production methodology and flat management strategy of empowering a small number of employees to manage huge swaths of business allowed them fend off, through superior product quality and far more efficient path-to-market, a full frontal assault from both Gallo and Constellation (back then Canandaigua) on both the Franzia box wine and Corbett Canyon businesses. I started in the wine business as a cellar-rat back in 1994 at Corbett Canyon winery, thinking maybe I wanted to be a winemaker. How did you come up with the model for de Négoce without breaking any of the entrenched rules of the three-tier system? A négoce also known as négociant is a French term for a wine merchant who purchases grapes, juice, or wine and vinifies and/or bottles them to sell. We’ve been following the growth of Hughes’ brand de Négoce since it launched in 2020, intrigued-but skeptical-about the perma-sale model it deploys. It also circumvents the traditional tiered system. While-and this is key to his philosophy-still allowing producers to see the kind of profit they need to stay afloat. Cameron Hughes cut his teeth selling uber premium wines to the masses, until he realized there was a better way to move the kind of terroir-driven small-batch wines that inspired him, at a price that more people could afford.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |