Uncorked (11 page)

I
N OUR SECOND YEAR OF BUSINESS
, like Luca, who was just learning to walk, I found myself excited but stumbling and occasionally hitting my head. It started with the reps.

Armando called to see if he could swing by to show me “things that would sell themselves.” Out of his bag, he pulled a half dozen bargain Australian wines. They had names like Snake Charmer, Strait Jacket, and Cycle Buff Beauty. Most were Shiraz-based blends, for which Australia is well known. We weren’t exactly encouraged by his focus on the labels. “Isn’t that fun?” he said, gesturing at a bottle that featured an illustration of a bikini-clad woman running away while screaming. The rest of the labels looked to have been inspired by the animated television series
South Park
. Sitting on one side of the table, Janet, Becky, and I were suspicious but trying to keep open minds. Australia makes some fantastic wines. So what if many of their vineyards also favor bad graphic design and have a tendency to overbrand?

Armando’s selections were uniformly syrupy goop. Becky detected “hints of wood shavings.” None were much like any of the wines we had tasted in over a year of business. It’s not that they were undrinkable; it’s that they didn’t taste like what we had grown to expect wine to taste like. These were more like smoothies with a kick.

“Can you taste the fruit?” Armando asked eagerly.

“Hmm.” I nodded and waited for some sign that would help me understand why he had just shown us this lineup. After a few uncomfortable seconds, I jumped in: “Thanks! Really interesting selection. We’ll get back to you.”

Armando was hardly out the door before Becky asked, “Was
that for real?” Janet was confused. Did this former sommelier not recognize that these wines were crummy? Did Armando truly feel that these wines would sell even if they were not to our tastes? Or was he just trying to unload a few dogs in his portfolio that he was nonetheless obligated to hawk with the same conviction with which he sold his Châteauneuf-du-Pape?

Could I really trust the guy I’d spied locking lips with my manager at our holiday party?

Over the next weeks what became clear is that Armando was not the only salesman pushing his “value” wines. At the same time, we were finding it harder to source some of the gems we had stocked the previous year. The rare Tuscan red Cerbaiona? “Sold out.” The equally coveted Turley Zinfandel? “Out of stock.”

Even Southern was no help. Lovable Matt was promoted. In his stead appeared Joe, a younger guy in a similarly baggy suit who pecked away at a ThinkPad. Joe did not make custom guitars, and neither did he open a pipeline to the good stuff. But he sure knew the SKU (short for “stock-keeping unit,” retail-speak for a product’s unique identifying number) of our bestselling budget white, La Poule Blanche (“The White Chicken”). “Five-case drop?” he’d ask as he stared into the computer screen.

Although no distributor actually came out and said it, I was starting to realize that there was a quid pro quo: help me unload some of the thirty thousand no-name bottles I have sitting in a container in Port Elizabeth, New Jersey, and I’ll help you get the coveted brands, the 100-point wines, and whatever else sells itself. Each rep, we later found out, had an allocation of gems he could dole out to his best customers. Now that we were no longer new enough to merit special incentives, we were constrained to buy wines that, though good, would require the dreaded “hand
sell.” The hand sell, the one-on-one explanation required to get a consumer familiar with an obscure bottle, frightens big stores looking for fast turnover. Not that we minded explaining over and over again the virtues of Quincy (a little known appellation next to Sancerre that offers the same crisp Sauvignon Blanc at half the price), but we did not want to be shut out from the collectible fare.

Janet suggested that we investigate the “gray” market. She knew people. We would just have to leap as soon as the offers presented themselves. The gray market is a shadowy and loose collection of brokers and hustlers who are not the original importers of the wine they sell. At best, buying wine from one of these sources is like acquiring a painting from a secondary art dealer. More often, buying wine from a guy named Eddie feels like picking up a used car. The pitch hardly varies: somehow (almost always, we are told, it came from a “finicky” collector who wanted to “prune” his collection), he got a hold of a cache of 1989 Lafite Rothschild. With wine, particularly champagne, gray marketers can buy at retail in Europe, bring it to the United States, and still sell it at a profit. Although it is possible that this wine had been lovingly pampered in a temperature-controlled cellar, it’s also conceivable that those bottles had baked for the last ten years in a Hong Kong shop window. Did I really want to take the chance?

There are some retailers who do. One particularly notorious shop on the Upper East Side is known to be able to scrounge up a few cases of 1961 Pomerol with a phone call or two. The two partners also have been linked to Hardy Rodenstock, the now infamous German collector who allegedly faked the world’s most expensive wine, a claret reputedly owned by Thomas Jefferson.
(The purported fraud was detailed in Benjamin Wallace’s book
The Billionaire’s Vinegar
.) There’s a lot of cash to be made from get-me-that-at-whatever-cost transactions. Although avarice seems to be the primary motivation for these shady deals, a desire for intrigue also seems to fuel their desire. Secret sales with dicey middlemen are sexy. Tellingly, one of the partners in this particular shop also has had great success distributing the wine of his ex-wife, a famous porn actress. She is naked on the label. Robert Parker gave her wine 90 points.

Although some of these gray market offers were tempting—80 percent off La Tâche!—we turned them all down, much to Janet’s dismay. Sure, we could make a few bucks, but not without two terrifying risks: first, the authorized importer of those goods certainly will not appreciate your thriftiness. Try buying something else from Southern, for example, if they catch you buying Gaja from a wineshop in Florence. Second, your customer may end up screaming mad at you for unwittingly selling spoiled wine.

In the worst case, the wine you buy isn’t just poorly stored, it’s completely fake. Everyone seems to know someone who’s been had. I recall reading about a broker, Everett Love, who was burned by a gray market purchase of fraudulent wine. In 2007, he bought six bottles of 1982 Château Lafite Rothschild from a Los Angeles broker, who’d in turn bought it from a broker in the Bay Area. Love sent the wine directly to a client in China. The client found a loose capsule on a bottle and discovered the cork was stamped 1981, a vintage that sells for a quarter of the price of the 1982. Last I heard, Love was irate and still trying to get back his money.

My nixing of the pursuit of the gray market irritated Janet. More and more, she was slinking in with dry lips and hooded
eyes. After one particularly rough binge, our wine director decided to do a master cleanse, and for ten days she swore off drinking. In place of food and wine, Janet sipped water spiked with cayenne pepper and maple syrup. Her mood faltered. More long nights followed. She tried another cleanse. And another. While fasting, Janet no longer let out loose whoops over sales of $150 Cabernets. She just looked unhappy. One day I bought her a spa treatment and told her to take off the afternoon. The next day she complained about the pedicure.

She needed a break. We did, too. As a bonus for her holiday dedication (and a little breather for Becky and myself), we gave Janet a round-trip ticket trip to her favorite place in the whole world: Burgundy. But Janet never made it back on the return flight. Her cell phone was off. Two days after she was supposed to have been back at work, I got a cryptic message that said our Pinot Noir–loving manager would be back in another two weeks: “There was work to do.”

I wanted to hide her maple syrup. I wanted to break those red glasses. I wanted to let her go. But we were afraid. Given our headaches in finding good people, what was I going to do in the interim? Suddenly become the wine buyer/manager?

The low point was the day I came upon Janet crying at the cash register. The night before, she confessed, she had had a terrible fight with Jude. They had both been drunk. Jude was history.

Meanwhile, Jude’s career was taking off. He was promoted to head of operations. The auction business, arguably the most legitimate gray market source, was skyrocketing. What had been a $5 million a year business when I attended that auction at Cru in 2005 had ballooned to $80 million by 2010. The venerable Upper West Side Manhattan shop found its substantial $5 million
annual retail sales dwarfed by its auction revenues as it became the world’s largest fine wine auctioneer. And all this out of an unassuming storefront sandwiched between a Jamba Juice and a Foot Locker.

Jude attributes part of their success to luring sellers with no premium (while whacking buyers with a 22 percent surcharge). But the most compelling reason for the store’s growth can be summed up in one word: China. Jude quickly recognized that the gravitational center of wine was shifting from London and New York to Hong Kong. The “Las Vegas of wine,” Jude calls it. Flush with cash, these buyers were aching to spend it on bigticket bottles.

Jude was, and remains, the perfect guy for the job. As lieutenant to the chairman, he got front-row access to the persuasive powers of this legendary bon vivant. According to Jude, the pot-smoking wine expert relishes late nights with clients, dishing inside stories at famous wineries as they toss back magnums of 1921 Cheval Blanc.

What set Jude ahead of his slightly stuffy competitors is that he was an outsider too, albeit one with his nose pressed firmly against the glass. He summered out east, but in down-market Hampton Bays. His father is in “banking of some sort,” Jude told me over lunch, but, it turns out, in the information technology division. Conversant with the inside but not a part of it, he can straddle the fence as both an Etonesque wine purveyor and an enthusiastic enabler of the Chinese nouveau riche.

Boy, does he enable. Recently, Jude hosted a dinner for forty-five atop the Great Wall for their best clients. According to Jude, clients were encouraged to invite their entourages. One guy brought fifteen of his closest friends on the auction house’s dime.

For the Far Eastern buyer, Jude contends, wine is the “ultimate showy display of wealth.” It’s an expensive object whose worth evaporates once you pop the cork.

While Jude was busy jet-setting to Hong Kong, we thought we might try to capture a shard of the high-end market. Thanks to a generous friend and collector, we put aside some money to focus on high-end Burgundy. Why kill ourselves over small sales, we figured, when we could make that and more by snaring a few connoisseurs with whom Janet was already going out to dinner?

What we did not realize is that patrician billionaires and other carriage trade mainstays were no longer the epicenter of the wine world. In contrast to the 1970s, when a pioneering cluster of baby boomers spearheaded wine consumption, around 13 percent of American drinkers now consume 87 percent of all wine. The newest generation of oenophiles is more affluent than filthy rich and more suburban than urban. The self-made billionaires and Eastern oligarchs who dominate the Chinese market are marginal in the United States.

Here, collectors, foodies, and geeks make up this new trinity of the wine-obsessed. In the New York area, for example, an ex-hippie from New Paltz is one of the largest French wine buyers. Balding with a ponytail, he had been one of the big fish seated at my table during that first auction at Cru, at which I watched him scoop up cases of Montrachet. For every William Koch (the mining heir famous for having bought the world’s most expensive wine, a $155,000 bottle reputedly from Thomas Jefferson’s cellar that turned out to be fake), there are thousands of guys like the Woodstock bigwig.

In this changed landscape, collectors still nod toward the ratings bestowed by Robert Parker, the lawyer turned wine critic
and publisher of
Wine Advocate
, but they are more likely to trust other sources, such as
Dr. Vino
, winner of Best American Wine Blog award of 2007 and one of the wine world’s most popular bloggers. We were learning that if you want to sell wine to serious collectors, the blessing of
Dr. Vino
was worth more than a 90-point shrug from
Wine Spectator. Dr. Vino
is written by Tyler Colman, a Westchester-based stay-at-home dad. He’s the spectacled guy down the street whom you spy typing away at his Mac into the wee hours. When Tyler came to our store to do a book signing, I was struck by how much this lanky, soft-spoken guy matched my preconception of the lone blogger who is most comfortable with a keyboard in front of him and a glass of wine by his side.

Perhaps the most influential critic is neither a publisher nor a blogger but a retailer. In the last five years, Gary Vaynerchuk has transformed his father’s Springfield, New Jersey, liquor store, the Wine Library, into a $60 million business. The juggernaut has been fueled by Vaynerchuk’s daily webcasts featuring his untraditional takes on wines and the wine industry.