Nice to see negociant Cam Hughes getting some love from Big Media, in this case Forbes, who says he “spends his time hunting opportunities that translate into great deals for wine buyers.”
I’ve been a Cameron Hughes Wine fan for years. I nominated Cam for Wine Enthusiast’s “Innovator of the Year” award this year (he didn’t get it, alas), because I believe the man has more or less reinvented the old art of the negociant in a way uniquely suitable for the 21st century.
Negociants used to be central to business practice in Bordeaux. Indeed, as Eddie Penning-Rowsell says in his masterpiece “The Wines of Bordeaux,” “the wines of Bordeaux owe so much to the merchants (negociants) and their enterprise, and they are so entwined in the history of Bordeaux’s growth and production as well as the sale of wine, that to give them…no more than the passing attention they have received so far would be inadequate as well as ungenerous.”
Such names as Barton, Jernon, Skinner, Nerac, Lawton and Guestier are part and parcel with the rise of Bordeaux in the 18th and 19th centuries. They bought the wine in cask from producers, blended it and sold it on the market, at a time when the chateaux had not the ability to do so. To be sure, the negociants were not always trusted. Thomas Jefferson warned a friend not to buy from negociants: “I can assure you that it is from them [i.e., the chateaux] alone that genuine wine is to be got, and not from any winemerchant.”
In the 20th century, of course, the Bordeaux negociants lost their primacy, as chateaux developed estate bottling and rising prices enabled them to market their wines directly. The concept of the negociant, by contrast, never really caught on in California (unless you can call something like Gallo a negociant, which I would not). This is why Cameron Hughes is so important.
Not that he was the first. Don Sebastiani first brought the modern concept to my attention in a major way when he established Don Sebastiani & Sons, which did win Wine Enthusiast’s 2005 Wine Star Award for Best American Winery of the Year, on my nomination. But Cameron Hughes has expanded beyond anything Don Sebastiani & Sons envisioned, becoming a worldwide presence. The Recession may have been disastrous to high-end wineries, but it’s proved a boon to Cameron, who profits from Bad Times. He’s able to pick up superpremium wine at discount prices, bottle it under his brand with his now-famous Lot numbers, and give the consumer some of the best values out there.
Not everything Cameron touches is gold. A 2009 Meritage, with a Napa County label, even at $10 was barely drinkable, while a 2010 Field Blend, $11, was rustic and brusque. Perhaps this is solely a function of their prices, for above $15 or so, a Cameron Hughes wine is as near a guarantee of quality as you’re likely to find in a California wine. I don’t have the time or patience to count all the Best Buys and Editor’s Choices I’ve given them over the years.
Will the recovering economy hurt negociants like Cameron Hughes? Probably. When I asked him where his Napa Cabernets came from (the agreements are strictly proprietary), he replied, “If you drive Highway 29 between Yountville and Rutherford, you’ll see.” These are precisely the wineries that were caught in the wringer by the Recession; buying on the cheap must have been as easy for Cameron as shooting fish in a barrel. But we have every reason to suspect the economy is recovering, and as it does, these wineries should be able to return to their normal $40-$60 a bottle price point. It will be interesting to see how Cameron Hughes deals with Good Times as well as Bad Times.
For the fourteenth year in a row, my old friend Rusty Eddy is conducting his PR for Small Wineries seminar at the University of California, Davis. And, as he has for many years, he’s asked me to participate.
When I first started, the things I told the students about were mainly how I, as a writer/critic, feel about PR people, what I wish they’d do differently, how they can help a writer in his job, how to pitch a story, what makes for a good or a bad press release, and stuff like that.
But about 4 years ago, things started to change. Social media was in the air, on everyone’s lips. The focus of the seminar changed abruptly, reflecting the greater shift that was occurring in the world. Students no longer wanted to know the ins and outs of preparing a good press kit. Instead, they wanted to know how a winery should use Twitter. This shift eventually persuaded Rusty to change the name of the seminar. It is now called “PR and Social Media for Small Wineries.” [You can still sign up for the Nov. 3o class.]
Despite, or perhaps because of, this shift in tone and content, Rusty still invites me because, as he says, “we want to know what propelled Steve from an unknown blogger a few years ago to one of the most-read online blogs.” On his panel, I’m something of an anomaly. The others are Jo and Jose Diaz, the husband-and-wife team that run Diaz Communications, a top winery [and other product] marketing and public relations and web development firm, and Paul Mabray, chief strategy officer at VinTank. If you ask me what Vintank is or does, I’ll answer in Rusty’s words: “We want to know what the heck VinTank is and why we should all be using it.” Paul has been a frequent commenter on my blog; when social media requires a good defense, there’s nobody better than Paul, for he’s super-passionate on the subject.
So the reason I’m an anomaly is because Jo and Jose, on the one hand, and Paul, on the other, both have a dog in the social media race. I don’t. In a sense, the students will benefit more from Jo, Jose and Paul than from me, because I can’t really give them any advice to help guide their future careers, which presumably will be connected with winery PR. All I can do is talk to them from the perspective of a guy they’ll probably be working with.
From Rusty’s assignment email: “We’ll discuss how PR has changed in the wine business over the last 10 years, but I’ll also insist that the basics of good PR practice still remain the same. Delivery methods and strategies have certainly changed, but one still needs to know how to write a good headline (subject line) and paragraph, and more importantly, how to find a brand identity and tell the story behind a brand in a compelling manner.”
Can’t argue with that. The key, of course, is Rusty’s final point: “how to find a brand identity and tell the story.” That’s harder than ever. In California alone, we have more wineries than ever before, hence more stories, and the truth of the matter is that most of these stories are pretty much alike. “Jim and Joan made their money in [high tech, medical devices, banking, real estate development, Hollywood], then were inspired by a vision to start their winery.” Or “Tom and Tina did it the hard way: with very little money, they bought their spread, cleared the land, planted vines and…”. I don’t mean to sound cynical, it’s just a fact.
What I’ll be telling the students is the best way to get a writer to hear you out is to be able to help that writer in fundamental ways. Writers are workers. We have needs, and we can use all the help we can get: setting up tastings, keeping us informed of developments in wine areas, coming up with story ideas, even doing fundamental research, which is time-consuming. If a PR person calls me and says, “I have a winery client who offers a $25 three-course menu in the tasting room, plus a spa treatment for an additional $50,” I’ll say, “Find me four other wineries that do something similar and I can say it’s a trend.” Writers love trends. One thing doesn’t constitute a trend; five do.
Which brings us back to social media. Trend–or here to stay? Obviously social media isn’t going anywhere, and yet in some respects the vast majority of wineries still don’t quite know what to do with it–especially the little family wineries where everybody’s already wearing six hats. If you’re Kendall-Jackson, you have a large and sophisticated staff (in-house and external) to do your social media for you, as well as a budget that can afford to think outside the box and develop new applications. If your winery consists of mom, dad, and a kid or two, running everything from sales and marketing to vineyard management to winemaking, you’re lucky to get six hours of sleep a night, much less master the arcane arts of Twitter, Facebook and a frequently-updated blog.
I think this is why some people say I “hate” social media, or am at best a social media denier: because I point out the challenges. But I also think that’s why Rusty continues to invite me. Truth, or should I say reality, is complicated, and when you’re a college student, you need to know the truth in all of its multi-facted aspects.
A few weeks ago, I blogged on the closure wars, and specifically about Nomacorc, a plastic “cork.” While I was careful to write, in bold italics, “This is in no way a product endorsement of Nomacorc,” I was aware of the fact that my sources of information were representatives from Nomacorc. They did a good job pointing out the advantages and efficiencies of their product, and that’s what I reported on.
So it wasn’t completely surprising when a fellow named Dustin Mowe contacted me, asking if we could meet up so he could tell me the real, natural cork side of the argument. Dustin’s president of Portocork America, whose website describes it as “the premier supplier of natural cork closures to the North American wine industry.”
Dustin drove down from Napa, where the company is headquartered, and we met at my office-away-from-home, also known as Whole Foods. (Full disclosure: I let Dustin buy me a medium soy latte.) I told him I was there to learn, not to take sides. This was an important ice-breaker, I think, because the cork people have felt a bit beleaguered in recent years, what with TCA being a problem and vastly increased competition from plastic “corks,” like Nomacorc and screwtops. Dustin was perhaps expecting to have to defend natural corks more than proved to be the case; I let him know right away that I have no great argument against natural cork, just as I have no great argument with screwtops or plastic closures in general (except the ones that swell up after you extract them, and then don’t fit back into the bottle).
It seems to me that every producer has to figure out what makes the most sense for his wines, economically, esthetically and technically. I’ve learned enough over the years to know there’s no perfect solution to the bottle closure issue. There always will be a certain failure rate for natural cork, in the sense of it being infected with TCA, just as there always will be a failure rate in automobiles and medical procedures. (Life itself, let’s remember, has a failure rate of 100%.) Hopefully, the failure rate in corks will be low. Dustin assured me the cork industry is hard at work on getting TCA down to as near zero as possible, and I have no reason not to believe him, since their livelihoods are bound up with finding a solution.
What is the failure rate of corks? Depends on whom you ask. My own experience is around 1.5%. It used to be much worse, maybe 10-15 years ago, so it seems like the cork industry is making progress. Dustin showed me a chart on TCA analysis in natural corks over the last ten years; the tests were conducted by a third party lab, ETS Laboratories, in St. Helena, so there’s no worry of bias. TCA, measured in parts per trillion, averaged just over 4.0 in 2002 and has steadily declined since, with 2012 averaging about 0.50. Dustin cited Christian Butzke, an enology professor at Purdue University: “TCA is no longer a major problem for the US Wine industry.”
So why do some people insist it is? Partly, I suspect, because minds are slower to change than facts. If a critic decided 10 years ago that cork taint was unacceptably high, he might not have changed his mind today. Dustin cited Jim Laube, from Wine Spectator, who’s been criticizing TCA in corks for years. For example, in 2007, Jim wrote, “Wine Spectator’s Napa office tracks the number of ‘corky’ bottles in tastings of California wines, and the percentage of defective corks routinely runs at 15 percent, which seems way too high to me.
Last January, Jim addressed the topic again, writing , “In 2011, out of roughly 3,100 bottles of California wine topped with cork (another 269 were topped with twist-offs), the percentage of ‘corked’ wines dropped to 3.8 from 4.8 in 2010—making it the best year since we started tracking this. In 2009, nearly 7 percent of the wines were corked, and in 2007, it was 9.5 percent.” Don’t ask me how the 2007 “routinely runs at 15 percent” squares with “9.5 percent in 2007” because I don’t know.
People do have differing threshholds for TCA perception, as for other compounds in wine, like brett. Jim’s schnozz may well be far more sensitive to TCA than most other people, including MWs, somms, collectors and winemakers. Besides, every form of closure has its issues. Screwtops can let too little air in, which can lead to reductive aromas. Plastic can give weird rubbery smells. Each closure also has its own environmental footprint issues, which I don’t intend to get into. There are economies that have to be considered by the producer, as well as image issues. Dustin told me that Bronco Wine Co. uses natural cork for most of their brands, even though cork on average is more expensive than plastic or screwtop, because the Franzias believe cork has a better image.
I emailed Joey Franzia about this, and he replied, “BWC [Bronco Wine Co.] % of sales is 2-4% of all case goods produced; consumers like the POP! And screw capped wines are received 50/50 by buyers as positive and negative, corks are natural, eco-friendly and biodegradable. We do extensive cork testing minimizing TCA contamination with BWC wines.”
I do like the POP! with corks, and the pomp and ceremony of opening a bottle, particularly when I’m entertaining. My poor old fingers are getting a little rickety, after opening 100,000-plus bottles over the years, but that’s a small price to pay for all the pleasure wine’s given me. So you’d have to count me as a cork fan.
I don’t often wander into the area of bottle closures, which aside from one’s personal preferences involves vastly complex issues of wine chemistry, engineering, physics and so forth. I’m on record as having said only a few things about closures: I hate those plastic, injection-molded “corks” that are difficult to pull out and then swell up so that you can’t reinsert them. I extra hate that hard plastic capsule that’s supposed to be “wax” but requires a chisel to remove (and at some risk to the health of one’s hand). I have nothing for or against natural corks, except when they’re tainted. And screwtops don’t bother me in the least.
Beyond that, the whole closure thing has been MEGO for me. Obviously, though, for the wine industry, it’s a major preoccupation.
I was invited to lunch (at Pican, Oakland’s prime source of cholesterol) by two folks from Nomacorc, a North Carolina-based company that makes a polyethylene “cork.” The only reason I accepted was because I realized I needed to know more about this world of closures. So here’s what I learned. This is in no way a product endorsement of Nomacorc.
The firm began in 1999. Nomacorc currently stoppers 45% of all U.S. bottled wines, selling 700 million stoppers annually in this country. This is mainly due to their success with brands like Gnarly Head, Kendall-Jackson, Ravenswood, Robert Mondavi Private Selection and Woodbridge, Clos du Bois and other widely distributed brands. These brands at first was hesitant to embrace a non-cork stopper, but once a “critical mass” was reached, it made it easier for others to buy Nomacorc. (“If K-J is using it, I guess we can, too.”)
My hosts were Katie Myers, a P.R. manager from New York, and Mark Coleman, a sales manager from Sonoma. Their job, of course, was to persuade me of Nomacorc’s superior qualities. We all know that natural cork has its problems. The taint rate, while lower than it used to be, still occurs with regularity, sometimes in expensive bottles. Screwtops have their own challenges: namely, oxidative and reductive wines. Katie told me (I can’t vouch for it) that even in screwtop-crazy Australia, producers are having second thoughts, and are looking to alternatives like Nomacorc, which claims to have made huge advances in “oxygen management.”
Both Katie and Mark explained that Nomacorc now produces stoppers with four different OTRs (oxygen transfer rates), meaning that each type allows a different amount of oxygen to get into the bottle over time–a constant rate that can be measured, as opposed to the inconstant transfer rate of corks, no two of which are alike since it’s a natural product. Since whites are less tolerant of oxygen, a producer might prefer a Nomacorc with a lower OTR, whereas reds, which can benefit from a little oxygen, might do better with a higher OTR. (Screwtops, of course, allow no oxygen in or out.)
But it’s not that simple, as a tasting showed. We had two Hungarian Sauvignon Blancs. Both were identical, made the same way, and bottled at the same time. The only difference was the OTR of their Nomacorks. My hosts asked me to try them both and say what I thought. Wine #1 was fresh, clean and fruity; I liked it. Wine #2 was darker, heavier, softer, more honeyed. It did not strike me as quite fresh. When I told them my results, they smiled. Wine #1 used a Nomacorc with a lower OTR.
I personally didn’t care for wine #2, but I could see how somebody else might prefer it. Mark explained that a producer might bottle a single wine with two different Nomacorcs, for shipment to different markets. The Chinese palate, for example, might prefer the softer, heavier wine #2, whereas an American palate might prefer #1.
I asked Katie and Mark the biggest problems they run into in persuading producers to use Nomacork, and they replied “legacy problems” and “the perception issue.” The latter is that so many people perceive anything but a natural cork as cheap and inferior. The former refers to the fact that plastic closures have had a dreadful time in the States, and despite quality improvements (in things like ease of extraction and reinsertion), people still remember the problems of old. In our conversation there inevitably arose the topic of marketing. Marketing and sales managers are notorious for being frightened of change and innovation. Even if a winemaker, fed up with natural cork, wants to shift to, say, Nomacorc, a marketing or sales person might forbid it, on the grounds the wine would no longer be sellable because of “the perception problem.” Katie in particular smiled as she explained that a large part of her job is persuading such managers to overcome their doubts; as Mark put it, “Marketing is scared of their own shadow.”
I don’t have a horse in this race. I don’t care how a winery closes its wines, as long as my peeves outlined in the first paragraph are satisfied. But I came away from my lunch at Pican more aware of how complicated the world of closures is, and how irrational consumer attitudes can be. I also came away stuffed. Pulled pork sandwich on a Kaiser role, hush puppies, homemade potato chips, deviled eggs. Highly recommended.
EDITOR’S NOTE: Based on reader comments, I understand that some screwtops do allow for OTR. I was going by my understanding of what the Nomacorc people told me.
When I wrote my first book , A Wine Journey along the Russian River, Ehren kindly was one of my chief sources of information about the Fort Ross-Seaview area (now an official AVA) of the Far Sonoma Coast. I’ve been tasting his wines since the 2006 vintage, before he and Failla were well-known, and loving them from the get-go: of more than 50 I’ve reviewed, I gave less than 90 points to only two of them. Ehren, of course, is very famous now, having received all sort of awards and honors from wine writers, and he is very generous in sending me all of his new releases every year for review, which isn’t something he does for many writers.
Justin Smith, on the other hand, has a full chapter in my 2008 book, New Classic Winemakers of California: Conversations with Steve Heimoff. I’d been reviewing his wines since the 2002 vintage, and very early on recognized their greatness, so when I wrote the book, I knew Justin had to be in it. Since then, Justin, like Ehren Jordan, has become famous, and Saxum is one of the top wines in terms of prestige, if not the top wine, from Paso Robles. Justin sometimes sends me his wines, if I beg him pretty-please, but not always: he prefers to have reviewers visit and taste with him, a la Screaming Eagle or Alban, which I completely understand.
When I began reviewing both Saxum’s and Failla’s wines, they were priced more or less in the $30s and $40s, not cheap, but not really expensive. Today, that’s completely shifted. Ehren, at Failla, is well known for being reluctant to take price increases, despite his fame and the accolades the wines get: his fantastic 2010 Hirsch Vineyard Pinot Noir is “only” $65, while his 2010 Estate Chardonnay, which I scored at 99 points, costs $44. Those are bargains for what you get.
Justin, on the other hand, has chosen another route. I don’t know what the suggested retail prices are for his current releases, because his website doesn’t say. But various online shopping sites, like this one, and here, show them generally in the low triple digits, more than most cult Pinot Noirs, but considerably less than the top Napa Valley Cabernet Sauvignons. [EDITOR'S NOTE: A reader subsequently notified me that the 2010 Saxums are $89 from the mailing list, still considerably higher than Failla.]
The similarities between Justin and Ehren are strong. Both are young, personable guys who had a vision and made it come true despite considerable challenges: Justin was in Paso Robles, an area generally considered too hot and a bit of a backwater (although that’s fast changing). Also, Justin decided to specialize in Rhône-style wines, which have never been in high favor, especially among connoisseurs. Ehren’s challenges were in his selection of a site for his estate vineyard: an almost inacccessible stretch of the Sonoma Coast that, when he began his project, did not have the cachet it does now. And Ehren wasn’t known for Pinot Noir and Chardonnay; he was the winemaker at Turley, where Zinfandel and Petite Sirah ruled. Neither Ehren nor Justin started with a big wad of money: they both put plenty of sweat equity in.
Both men were “discovered” early on by people like me, and both went on to the well-deserved success they enjoy today. Where they differ, obviously, is in their pricing strategies. I wouldn’t blame Ehren if he raised his prices: I think buyers would gladly go along. Well, maybe not gladly, but they would. Nor do I blame Justin for raising his: he believed in himself and in his wines, he figured the market would bear the price, and he was right.
Perhaps Ehren feels that hedging his pricing will protect him from future economic swings in the market and, in the long run, ensure Failla’s continuity. Perhaps Justin feels he might as well take advantage of the opportunity Saxum’s fame brings him right now. I personally can’t say one strategy is better than the other. I just know that both of these guys are making astonishingly good wines. I also know that, while Justin proves that you often have to dig deep for great wine, Ehren is showing that world-class wine can be had at less than stratospheric prices.
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It’s one of the most venerable of marketing and advertising schemes. Give the consumer an interesting character he can relate to in an advertisement, and half of the sales job is done.
That’s why David Ogilvy invented Commander Whitehead to sell Schweppes Tonic Water in the 1950s
and why, 60 years later, Dos Equis invented The Most Interesting Man in the World to sell their beer.
Put a face on a product, make the face fascinating, give the reader/viewer a little back story, and voila, you’ve brought that consumer a step closer toward purchasing your product.
Storytelling is well known in the wine world, especially among public relations and media experts. They’re always looking for a way to make their clients compelling. People like me, who are gatekeepers to the media, are the particular targets of PR types. They know that all winemakers and winery owners are fundamentally the same, so they have to figure out a way to make their client different. It’s not unusual for a pitch to be crafted this way:
“Steve, I know you know a lot of husband-and-wife teams who made their money in another industry, then moved to Napa Valley to live the dream of owning a winery. But Bill and Tammy [made-up names] really are different! He’s not just another rich guy, he loves puppies! And Tammy is an artist in her own right, having exhibited her crocheted images of moths in the St. Helena Library!”
What the PR folks, bless their souls, are trying to do is tell a story, or, more accurately, sell a story, in the hopes someone will buy it.
Now, we’re being told, in the pages of Direct Marketing Magazine, that 2012 is “the year of brand storytelling.” Go ahead, read the article. It’s short and actually very acute in its perception, and the writer–Scott Donaton–is balanced. He’s not one of these people arguing that social media is the alpha and omega of everything. He gets to the heart of the issue with two really interesting statements:
1. “content can’t be relegated to a side role. It must be integrated into everything [businesses] do,” including traditional advertising but also tweets, YouTubes and other “consumer experiences.”
2. However, “The more broadly content is defined the more danger there is that the word will be washed of all its meaning. If everything is content, how can you have a content strategy?”
In these two statements lies most of the back-and-forth that’s occurred on this blog over the years concerning the value and role of social media for wineries. Many of my colleague bloggers have tended to the position in #1: Wineries have to become more socially engaged by telling their stories and engaging consumers, or else they risk being irrelevant. My position has veered more towards #2. If everybody is Facebooking, tweeting, instagramming, etc., all the time, then it all tends to cancel everything out. Donaton, the writer, calls this conundrum “questions that need to be addressed,” which is fair enough. It means we have to continue to have the conversation, even if it sometimes leads nowhere. In the meantime, Donaton writes, “brand storytelling is an effective weapon [that can] establish rituals, showcase product benefits and generate excitement.”
Problem is, if everyone has a story (and everyone does), then distinguishing your particular story becomes less and less possible, to the vanishing point. You really have to start splitting hairs. If Bill loves puppies, then his competitor, Don, has to love crippled puppies rescued from disasters. If Tammy’s crochets are in the St. Helena Library, then Bill’s wife, Tina, has to have an installation piece in the Louvre. (Actually, that would be a pretty good story!)
There have been some good recent examples of storytelling. The Envolve guys leapfrogged on Ben Flajnik’s star turn on “The Bachelor” to tell their story. They got tons of publicity, all of it free, but it remains to be seen if that has legs. As Donaton suggests in his column, the consumer’s attention span gets shorter all the time. Andy Warhol’s 15 minutes of fame has turned into 15 seconds on a tweet.
Storytelling has its place, but whenever you hear someone talking it up, look for their agenda. Little wineries such as Failla or Saxum have great stories, but journalists didn’t get around to writing about them until they [the wineries] proved themselves by establishing quality. People tend to forget that quality must precede the story. You can tell a story about a mediocre winery and the winery will still be mediocre. Conversely, every story about a great winery is a great story.