Cameron Hughes Plans New Brand Line, Expects Big Year In 2014December 6, 2013
San Francisco-based negoçiant Cameron Hughes tells SND his company has big plans for 2014, including the launch of a new brand line, the Cameron Hughes Collection, which will sit outside the group’s core Lot Series. While the Lot Series is focused on one-off wines that disappear from the market once they run out of stock, the Cameron Hughes Collection will be continuously available.
Set to launch next February with a Monterey Chardonnay and a Lake County Cabernet Sauvignon, the Cameron Hughes Collection will add a Pinot Noir next fall. The wines will retail at $15 and below. While the Cameron Hughes Collection will start with a California-based portfolio, Hughes says he may add international wines looking ahead, citing Sauvignon Blanc from New Zealand and Prosecco from Fruili as two potential candidates.
“The Lot program is great for retailers that love to rotate their SKUs—Costco for example, as well as small independent retailers. But we have many retail partners clamoring for consistently available SKUs,” Hughes explains. “The Safeways, the Krogers, the HEBs of the world all say it’s something we need to do.” Costco got onboard early with the Lot Series—which began in 2001—accounting for as much as 95% of Cameron Hughes’ business as recently as 2008. Since then, the company’s sales profile has diversified, with Costco’s share now at under 20%.
Overall, company volume will be up about 5% to 400,000 cases this year. Hughes expects growth to ramp up in 2014 with the addition of the new line. “We think the Collection will be a game-changer for us. We have 50,000 cases of this label ready to go, and we expect it will all go out next year,” he says.
Turning to market conditions, Hughes observes that, with U.S. economic performance still spotty, everyone’s margins across the wine business are being compressed. “There’s a feeling that things are generally good in the wine industry, but no one is jumping for joy,” he says. “It’s very difficult to take pricing right now. At retail, private label had somewhat dried up because of the perceived grape shortage in 2010 and 2011, but now it’s kicking back in again. Many of the big producers are doing it for their retail partners. So the business is fine, it’s growing, but it’s not a frothy, exciting time in the market. We’re hoping by next year it will be.”
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