Remember "$60 Wine for $20?" We sadly kiss those days goodbye.
In our essay from two years ago titled "How to Buy $60 Wine for $20" we shared the secrets to buying great wine at ridiculously low prices. To summarize, there were two key companies involved--
in 2001 a California-based wine merchant named CAMERON HUGHES started a company of the same name. Its business model entailed purchasing high-quality surplus wine at rock-bottom prices from cash-strapped wineries and then re-selling it under the Cameron Hughes label. We consumers were thus able to buy better wine for the money than previously. Three things can (and did) go wrong with this model-- 1.) the market could become flooded with good-quality bulk wine, thereby hurting demand specifically for Cameron Hughes wines; 2.) the supply of really good surplus wine could dry up; and 3.) a middleman-- like Cameron Hughes-- could be caught in the same bind as the actual producers, with way too much money tied up in wine and not enough operating cash. After a combination of these setbacks, the Cameron Hughes company was purchased out of bankruptcy by Vintage Wine Estates, and Hughes himself stayed on as the face and name of the company until he was contractually free to start another company.
Hughes founded DE NÉGOCE in 2020. The model and sourcing methodology were similar to those of his previous company, with one important and especially clever distinction-- he SOLD the wine to us end-users before he actually PAID the winery for it with our money. This way he could sell wines at even better prices without ever sitting on significant inventory or stacks of un-payable bills. It was a delightful run, especially with the fantastic twin vintages of 2018 and 2019. The Grumpy Old Mansplainer's cellar is currently flush with examples thereof-- epic Cabernet Sauvignons, powerful Syrahs, and surprisingly age-worthy Merlots from both Napa Valley and Washington State...
Good thing, because all good things eventually come to an end. In early 2023, Cameron Hughes sold 51% of de Négoce to a wine conglomerate. A year later he sold them his remaining share. The end-user prices went up, and the hard-to-believe bargains seem to have disappeared along with Hughes himself.
For 25¢ I was able to obtain a 3-month trial subscription to an important California newspaper that covered this situation in granular detail. Rather than selectively plagiarize snippets of its content, I hereby present a cut-and-paste of the entire article--
This California wine company sparked obsessive fandom.
Then its S.F. founder ‘vanished’
When the wine company De Negoce appeared in 2020, it set off a peculiar frenzy. The pitch was irresistible: $100 Napa Cabernet discounted to as little as $10. The catch was that you had to buy at least a case, as futures — committing before the wines were actually bottled — and you’d never learn the name of the winery that made it.
Soon, fanatical De Negoce customers had taken to online message boards, obsessively tracking their purchases and trading tasting notes. They’d rush to buy new wines as soon as the email announcement came through; the hottest releases sold out in a matter of minutes. These were the days of deep COVID, and America was buying wine as if there might literally be no tomorrow. “I’ve probably bought well over 150 cases at this point,” said Matt Turk, a customer in San Diego.
But four years in, the fandom noticed something had changed. De Negoce’s founder, serial wine entrepreneur Cameron Hughes, had “just vanished,” as Turk put it, no longer signing the emails or posting his typically high volume of messages on the online forum. Logistical snags increased: Wines were delivered late, or shipped in weather so hot that it could damage the precious liquid. Some swear that the quality of the wines became more variable.
The De Negoce community suspected something sketchy had happened. They believed they deserved answers. More than one customer emailed the Chronicle, urging an investigation.
The Chronicle took the bait. An investigation revealed a relatively simple explanation — the obvious explanation. In early 2024, Hughes sold De Negoce to Santa Rosa’s Martin Ray Winery; Hughes left; the new owner rebuilt the team. A run-of-the-mill merger-and-acquisition story.
“I was looking to cash in, to be honest with you,” Hughes explained. Since launching De Negoce from his San Francisco home, he’d been working 80-hour weeks. He wanted to focus on his other businesses, like the Wagyu steak company he owns. He remarried.
The question now is whether the new De Negoce leadership can recapture the magic that Hughes found — a familiar question for any newly acquired brand that had traded so heavily on the personality of its founder. De Negoce’s early success was inextricable from Hughes himself, hinging entirely on customers’ trust in his ability to discern good wine from bad and to negotiate a bargain.
New owner Courtney Benham wants to assure his customers that his team is upholding Hughes’ sourcing principles. Benham — best known as the co-founder of Blackstone Merlot — has been rebottling bulk wine for over 30 years, he points out, and is leveraging his own longtime industry connections to get the same competitive deals on high-quality bulk wine that Hughes was. If anything, Benham believes, the quality of the De Negoce wines has gone up: “I think that our palates are maybe a little more exact,” he said.
Will the De Negoce megafans buy it?
Hughes is what’s known in wine circles as a negociant — a trader who buys pre-made wine, re-bottles it and sells it. His first venture, Cameron Hughes Wine, capitalized on a glut of wine on the bulk market in the early aughts. But Cameron Hughes Wine grew too quickly, took on too much debt, became too reliant on one wholesaler — Costco, which bought less and less — and eventually entered a court-appointed receivership. Vintage Wine Estates, which itself filed for bankruptcy this year, bought Cameron Hughes Wine in 2017.
Hughes saw De Negoce as a do-over, a chance to correct the fatal errors that had doomed Cameron Hughes Wine. The futures model meant he would never have excess inventory. Direct-to-consumer sales meant he would no longer be at the mercy of a retailer like Costco.
This time around, he said, it worked. “I think we cracked the code, absolutely.”
The timing was fortuitous: Bulk wine pricing was extremely low in early 2020, thanks to a years-long surplus of grapes in California, so there were plenty of reputable wineries looking to sell perfectly good wine on the bulk market. Many of the early De Negoce wines were California Cabernets from 2018, an excellent vintage.
Almost immediately, wine lovers took notice.
“When I started out, I thought it was amazing,” said Carter Zinn, a lawyer in Mill Valley. “There were several bottles that I just couldn’t believe how good they were.” He bought multiple cases of 2018 Napa Cab for $25 to $30 a bottle, “and I’m quite confident that some of these were equivalent to a $100 bottle.”
Rohit Bhan, a 30-year-old orthopedic surgery resident in Chicago, had never bought much wine before discovering De Negoce. The value proposition converted him into an enthusiast. “I would say my hit rate was 70% very good,” he said.
Hughes’ emails announcing each new wine release used sensational language: The wines were “dynamite,” a “stunning value,” sourced from “one of the icon estates of Napa Valley.” He posted frequently on the online forum Wine Berserkers, “really fueling the fire as much as he possibly could,” said one frequent Berserkers poster in Santa Barbara County, Larry Schaffer.
The approach encouraged amateur sleuthing: Customers would posit guesses about which wineries the De Negoce bulk lots had come from. One San Francisco fan, Laura Cook, started a website, De Negociants, that crowdsourced reviews of each wine.
The community felt such a personal connection to Hughes that when he stopped communicating early this year, many felt betrayed. “To this day we have no idea why,” Turk said. “I can’t imagine why he just went silent.”
Behind the scenes, Hughes had been shopping De Negoce around. “There were plenty of interested parties looking to buy it,” he said. When a broker presented the opportunity to Benham, he was “immediately intrigued,” he said. “And next thing I know, I’m in business with Cameron.”
Benham’s career is not unlike Hughes’s. He had his own runaway hit as a negociant, Blackstone Merlot, in the 1990s. After selling that brand, Benham set about reviving Martin Ray, a historic winery that had become neglected, ultimately building a family of wine brands that include Angeline and an eponymous label. Recently, Benham’s acquisition activity has accelerated, buying Healdsburg’s Foppiano Vineyards in June and the Vina Robles brand (but not its Paso Robles property) in September.
In early 2023, Benham bought a 51% stake in De Negoce, he said, and kept Hughes around. In January, he bought the remainder of the company. Hughes left.
To run De Negoce, Benham hired two veterans of the original Cameron Hughes Wine operations, Andre Yen and Ryan Watts. They’ve revamped the website and given the label design a refresh, but are emphatic that they’ve maintained Hughes’ “integrity of sourcing,” Yen said. “We haven’t changed the pipeline. We haven’t changed the processes.”
Some De Negoce customers who have learned of the sale have speculated that Benham may be using De Negoce to get rid of bulk wine that he doesn’t want to use for Martin Ray and his other brands. Yen and Watts insist that’s not true. “We have total autonomy on what makes it and what doesn’t,” Yen said. On a few occasions this year, he said, Martin Ray wines have been used in De Negoce, but that was only because the wines met their standards.
“If it makes sense, then why not?” Watts said. “The independence of our sourcing is what keeps us alive. Just as I could tell a big winery in Napa no, we can give that no internally.”
Ardent De Negoce fans have maintained their skepticism.
“I do think there’s been more misses lately,” Zinn said. Without Hughes, something has been lost, Cook said: “Before, it was more of a personal connection. It’s changed.”
Prices have risen, a reflection of the fluctuating bulk wine market. Hughes capitalized on a uniquely advantageous moment in 2020; bulk prices spiked after that year’s wildfires. The preponderance of $10 Cabs in the early De Negoce days was a right-place, right-time situation, said Turk, who is likely the most prolific poster on the Berserkers thread. “All the fun happened in 2020 and 2021,” he said.
Business appears to be humming nevertheless. “Our regularly purchasing customers are in the tens of thousands,” Yen said.
Yet, several customers said they’d stopped buying as much from De Negoce for a more mundane reason: After years of frenzied ordering, unopened cases were stacking up.
“At a certain point,” said Bhan, the customer from Chicago, “you end up with too many bottles of 2018 Cabernet.”
And so, Dear Readers-- where does this leave us lovers of good wine at great prices? I'm not really sure, but stay tuned... I'll keep working on this until I find the answer.
UPDATE:
The party isn't COMPLETELY over... it's just moved to a much smaller space. The days of buying $300 boutique Cabernet Sauvignon for $45/bottle (this really happened!) are likely gone forever, but bargains remain in a few scattered categories.
ZINFANDEL is and always will be a "salt-of-the-earth" red; its cheapest manifestations are peasant wines that pair perfectly well with spaghetti and pizza. However, when sourced from premium œnological real estate-- increasingly rarely, as many such vineyards are being grafted over more profitable varieties-- Zinfandel can yield wines that approach in sheer deliciousness the finest Napa Cabernet Sauvignons. WINE INSIDERS (the company that swallowed the old Cameron Hughes Company) is presently listing several bottlings including their spectacular LOT 867-- an astonishingly delicious 2019 Napa Valley Zin that allegedly sold for $50/bottle at the winery to its cult-ish devotees. WINE INSIDERS currently lists it for $27.99 but offers occasional deep discounts. I personally purchased six cases at half-price.
Meanwhile, great SAUVIGNON BLANC continues to suffer from comparison to her sexier sister Chardonnay. (See our essay The Royal Sisterhood.) DE NÉGOCE currently lists a pair of $40-something premium SB's from Sonoma for $21, one from Dry Creek and the other from the Russian River... not exactly a steal, but a bargain nonetheless. These make sophisticated sippers for the warm weather that's nearly upon our doorsteps.
Comments