Wine Straight from the Source
Why is wine so expensive? Part of the reason, certainly, is an abundance of middlemen.
Take that $15 bottle of Bordeaux or Chianti you picked up last weekend. A good percentage of the purchase price, of course, went to the winemaker. And the liquor store, too, took a cut.
But did you realize that between the winery and the retailer, there are typically two, and sometimes three, middlemen with their hands in the till? First, there’s the importer who sourced the wine for the U.S. market. His cut: anywhere from 15 to 25 percent. Then there’s a state-licensed wholesaler who bought the wine from the importer and sold it to the retailer. Its cut: perhaps another 25 percent. In some cases, there’s also a broker who represented the interests of the winemaker and negotiated with the importer. He might have taken another 10 percent. In other words, that bottle of Bordeaux or Chianti was marked up 50 percent or more even before it reached the liquor store.
But what if your local retailer could buy directly from the winery? Theoretically, the wholesale price the retailer pays would be substantially less. And, theoretically, the store could sell it to you for a lot less.
An increasing number of wine shops, and even some restaurants, are putting that theory into practice. Take, for example, WineMasters — a consortium of 45 stores, including 22 in New Jersey — which buys directly from wineries in Europe, South America, Australia and New Zealand, as well as California. The WineMasters portfolio currently numbers about 250 labels, ranging from $7 to $200 a bottle. These aren’t the only wines the stores sell, but the pitch to customers is that they offer the best possible quality-price ratio.
“Winery direct allows us to say we’re selling this item at the lowest price in the United States,” says Kevin Roche, a veteran New Jersey retailer who founded WineMasters a decade ago with Jim Treanor.
Roche’s family operates Queen Anne Wine and Spirits in Teaneck, while Treanor owns Valley Wines and Spirits in Wayne. But both men spend much of their time scouting for new sources of wine that can be marketed exclusively through the WineMasters consortium.
One of their discoveries is Casa al Vento, a vineyard in Italy’s Chianti region. Treanor was vacationing in Tuscany when he happened to stay at the winery. Turned out the winemaker hadn’t yet found a U.S. importer. Soon, Roche and Treanor were making the necessary legal and logistical arrangements to buy Casa al Vento’s wines directly.
The end result: WineMasters offers 2007 Casa al Vento “Foho” Chianti Classico Riserva through its website (winemasters.com) for $24.98 — a low-end price for reserve-level Chianti. If the wine had been imported via traditional channels, the price would be more like $32 or $33, according to Roche.
In other cases, WineMasters might contract with a winemaker who already sells to the New Jersey market but happens to have a surplus of wine. Roche and Treanor will negotiate to buy a big chunk of the surplus, then bottle it under a proprietary label. This way, they can offer the same quality as the vintner’s own label but at a reduced price. This type of product is known in the trade as a “private label” wine.
WineMasters may be among the most active New Jersey retailers involved with “winery-direct” buying and “private label” wines, but they’re not alone.
In South Jersey, Moore Brothers has been at it since the mid-1990s. And while WineMasters affiliates carry all the mainstream brands in addition to the consortium’s selections, Greg and David Moore offer only wines they source themselves.
“We’re like Apple Computer,” quips David Moore. “Or they’re like us.”
Moore Brothers, with stores in Pennsauken, as well as Wilmington, Del., and New York City, has relationships with 120-plus winemakers in France, Italy, Germany and a few other regions. “We go to Europe ourselves and find the producers with whom we want to work,” David Moore says. “It’s all about the person and the place and the culture.”
The Moore brothers are fanatical about quality — to the point where they guarantee their wines are temperature-controlled from the time they leave the vineyard to the time they reach the consumer. The stores themselves are kept at a constant 56 degrees. “We have fleece vests all over our stores,” David Moore explains.
Gary Fisch, owner of Gary’s Wine and Marketplace in Bernardsville, Madison and Wayne, purchases wine directly from some of California’s top vintners, then bottles it under his own labels: Going Forward, Go Figure and Grand Finale (all variations on his initials). Fisch said he takes advantage of the fact that winemakers typically grow or purchase more grapes than they know what to do with.
“I go with my wine-buying team and we meet with the winemaking team,” he says. “They bring barrel samples and we taste through them.”
The Going Forward line comprises a Sonoma Coast chardonnay and pinot noir priced in the $14 to $16 range. The same wines are sold by the winemaker under his own label for more like $20 to $30 a bottle, Fisch says.
So why don’t all New Jersey wine merchants buy directly from the source? For one thing, it’s logistically complicated. First, a retailer has to establish relationships with winemakers thousands of miles away. Then, they have to arrange for the wines to be shipped and cleared through licensed importers and wholesalers. As a rule, only larger retail operations have the wherewithal to pull it off.
“It’s a minimum of a six-month process from when we find someone we like until we bring it into the market,” says WineMasters co-founder Treanor.
There are exceptions, however. Nicholas Harary, owner of Restaurant Nicholas in Middletown, occasionally offers his customers “shiner wines.” These are wines from exceptional growers who end up producing more than they can sell in a given vintage. When they do, they’ll set aside a portion of their output in unlabeled bottles — hence the term “shiner” — and find someone like Harary who’s willing to take the surplus off their hands.
Restaurant Nicholas will then create a private label and sell the wine for a fraction of the regular price, typically as part of the restaurant’s “wine of the month” retail program via its website (restaurantnicholas.com).
“One of the wines we sold last year, the winery sold for $50 under their own label,” Harary says “But under our shiner label, it was $20.”
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