Bypassing the Grape but Enjoying Its Fruits

Cameron Hughes sampled wine blends at his company’s offices in Calistoga, Calif. It owns no vineyards or wineries, and outsources all the labor that goes into making a bottle of wine. Credit Peter DaSilva for The New York Times        

By NICOLE LaPORTE JUNE 9, 2012

CAMERON HUGHES sees nothing romantic about being a winemaker. Having a rolling vineyard to call his own? Taking that first sip of a homegrown pinot noir? He can live without it, thanks — and he does, even as he has become a prominent name in the California wine industry.

Mr. Hughes, who started by selling wine out of the back of his Volvo station wagon in 2002, is a wine négociant, or wine merchant. He does not own a vineyard or a winery. Instead, from offices in San Francisco and Calistoga, Calif., he outsources all the labor that goes into making a bottle of wine — growing the grapes, crushing and fermenting them, and other steps in the process — to others.

“All we do is bring the barrels,” Mr. Hughes said.

Actually, he does a bit more than that. During the worldwide wine glut of the recent recession, his company, Cameron Hughes Wine, flourished as he bought up excess wine from wineries, repackaged it under his own label and sold it at a discount.

One of the first wines he ever sold was a syrah from the Lodi region of California that had a retail price of $28. Mr. Hughes sold it at Costco for $8.99 under his generic-sounding Lot series — it was Lot 1. (Per nondisclosure agreements he has with sellers, he does not reveal where his so-called bulk wines come from, but merely describes their aromas, flavors and area of origin.)

Initially, Mr. Hughes said, he “stood in Costco doing my carnival barking act” as he tried to sell his wines to customers. “You’d hear me on the other side of the store, talking about wine. I had store managers come over and be like, ‘Dude, you’ve got to tone it down.’ ”

Mr. Hughes has stormed in on a profession that many consider sacred and has imbued it with some capitalistic swagger — not unlike Fred Franzia, the vintner behind Trader Joe’s discount wine, Charles Shaw, a k a Two Buck Chuck.

Négociants like Mr. Hughes are much more common in Europe. In the United States, “most people want to have a vineyard,” said Liz Thach, a professor of management and wine business at Sonoma State University. “The soil, the terroir, they want to have the whole thing. We have more than 7,000 wineries in the U.S. and most of them are very small and run by people who want to have a small, family business and the pride that goes into that.”

It is notoriously difficult to make a profit on a vineyard, and some wealthy owners pour money into tending grapes knowing full well that they may lose money for years. Winemaking is “a labor of love for many, many people,” Mr. Hughes said. “And it is for us, too, but we figured out how to make a buck, too.”

Most of his bucks were made buying and selling bulk wine, but these days, Mr. Hughes puts most of his resources behind actually making wine — or, rather, having others make it for him.

The Lot series are among the offerings. Credit Peter DaSilva for The New York Times

Working with wineries and vineyards in California, Oregon and Washington, as well as in Europe, he is on track to produce 300,000 cases of wine — equaling 5,000 tons of crushed grapes — this year. That’s even as poor harvests have resulted in a projected wine shortage for the next several years. In some cases, Mr. Hughes pairs a vineyard with a winery to create a wine according to specifications that he devises with his three winemakers and viticulturist.

“We outsource the work, but we oversee it very closely,” Mr. Hughes said. “We visit these vineyards numerous times. We have our viticulturist traveling the state right now, visiting all the vineyards. When the time comes for crushing and fermenting, our winemakers are there as well, getting daily lab updates.”

In other instances, Mr. Hughes might come in just after wine has been fermented, assemble various blends and then send them to the barrel to age.

Either way, the low-overhead nature of his business means that his wines, sold in places as diverse as Sam’s Club, boutique wine shops and on the Internet, are 50 percent to 70 percent cheaper, he said, than they would be under their winery’s label.

So how did he enter this idiosyncratic profession? “Purely by accident,” he says.

After starting out as a cellar rat — a low-level winery employee — at Corbett Canyon, a popular inexpensive wine label, he decided that he didn’t want to be a wine producer, and went into wine sales and marketing instead. A few years later, when he was working for a French wine importing company, he first heard about négociants.

When the importer went bust not long thereafter, Mr. Hughes saw a place for himself in the wine world. “I bought 500 cases of Napa Valley cabernet, I had a guy bottle it up for me, and I sold it out of the back of my Volvo station wagon.”

After struggling to the point that he teetered on the edge of bankruptcy, he said, he got his big break in 2004, when he persuaded Costco to start selling his Lot series.

Because both he and the origins of his wine were unknowns, building trust among customers was its own kind of labor. At Costco in San Francisco, where Mr. Hughes would stand for hours personally selling his wine, “They’re like, ‘I’ve never heard of it,’ and they’d walk on by,” he recalled.“I used to tell people, ‘If you don’t like it, I’ll come wash your car for you.’ You just did whatever it took to get people to try it.”

PROFESSOR THACH said she admired Mr. Hughes’s “heady vision.”

“He worked really hard to get Costco to pay attention to him, and when they did, it put him on the map,” she said.

Over the years, Mr. Hughes has built up his business “one foxhole at a time,” as he puts it — in 2011, he sold 80 different Lot wines, compared with three his first year.

And never once did he have to wash a car.