Cameron Hughes is an online wine retailer that specializes in delivering superior value to consumers in the ultra-premium wine category. While a top-tier bottle of ultra premium Cabernet Savignon may retail for $135, Cameron Hughes is able to offer essentially the same wine for $28 a bottle on their website. The key components in their ability to offer these deeply discounted prices are production limits and anonymity. The general concept goes like this. Let’s say a top-tiered winery limits the production quantities on one of their labels in order to limit the market supply and protect their ultra-premium price point (I’m not sure how pervasive this practice is in the wine industry, or if government production restrictions are responsible, but the general concept here remains the same). If a winery over-produces a given label, Cameron Hughes offers an attractive proposition to the manufacturer that allows them to earn additional revenue on their excess production while preserving the label’s retail pricing strategy. Cameron Hughes establishes a partnership with the winery and agrees to buy the excess cases (say 1,000, or 12,000 bottles) at a deep discount, but what they forfeit in the deal is the wine label itself. At the time of the transaction, Cameron Hughes is no longer able to associate the true wine identity with the product that they’ll then sell on their website. So they’ll purchase the $135 wine for, say, $20, relabel the wine as “Cameron Hughes Lot 303″, and sell it at chwine.com for $28.
I’m hardly a wine snob – but I’d like to think I can at least tell the difference between a glass of $7 Yellowtail and a Chateau Latour. More importantly, the people I was buying the wine for as Christmas presents would surely be able to tell the difference. With my limited knowledge in the premium to ultra-premium wine category, simply stopping by the local grocery store and buying a bottle of wine based on label aesthetics and perceived value from shelf placement and price would hardly convince me I was really getting any value for my money. What Cameron Hughes has managed to do is segment ultra-premium wine to a distinctly different category of wine drinker - the 90-something percent of wine drinkers unwilling or unable to spend $135 on a bottle of wine, including myself! (no idea how accurate that percentage is). As a consumer looking for great value in a bottle of wine, the value proposition posed in being able to save $107 on a fantastic product at the expense of the true label identity is a no brainer! If the consumer’s primary motivation is to simply enjoy a great bottle of wine, then the value of the wine’s true identity diminishes substantially given the marginal cost. There’s also some additional attraction in the mystery of not knowing where the wine came from yet being truly confident in the quality and value that you’ve received as a consumer.
In deciding to purchase wine from Cameron Hughes vs a competitor at the local grocery store, all I needed was a sense of conviction in the true quality of the product I was purchasing from their website without having tasted it. The company accomplished this with their video blog wine tastings with the resident sommelier who explains as much as he’s able to without revealing the identity of the wine. The company’s overall passion and enthusiasm for wine, the superior value they’re able to pass on to the consumer, and what turned out to be a home run in terms of quality once tasted has made me a loyal customer to Cameron Hughes. If you enjoy a good wine and are looking for a deal, I recommend checking them out for yourself.
