To see how top Bordeaux wines are perceived in the U.S. market, all you have to do is wander through the most exclusive restaurants in New York's Upper East Side, says Sherry-Lehmann CEO Chris Adams.
In the film "Manhattan", Woody Allen says: "It's difficult to live in this town without a big income." The shops on the Upper East Side are some of the world's most famous. While Tiffany's does not actually serve breakfast, local diners are willing to pay $82 for a roast chicken.
At these dining temples of power, "you will see Dom Pérignon," Adams says. "That's only $160 a bottle. But you won't see Lafite [Rothschild]. You won't see Latour. People here have a lot of money, but they're smart people. They're not going to pay more than what's right and reasonable. Bordeaux has to wake up and smell the coffee."
Adams knows the American market for top Bordeaux as intimately as anyone because Sherry-Lehmann is one of the country's biggest Bordeaux retailers. The store, founded shortly after Prohibition ended, in a posh building where Hermès now stands, was instrumental in introducing the top wines of France to Americans. Its 40,000-strong customer list still includes some heavy buyers of luxury wines.
"I have a customer who shifted from Bordeaux to Solaia," Adams says. "He has probably bought 70 or 80 cases of Solaia. He says this is what he's going to pour at his daughter's wedding. It's $300 a bottle versus $3000 a bottle. This to him is what's right and reasonable."
You might think the CEO of such a company would be something of a snob. Au contraire. This article might be longer if we hadn't spent more than half of our meeting talking baseball; he's a Phillies fan.
Back on the wine talk, Adams says Bordeaux is still a huge part of Sherry-Lehmann's $50 million annual wine sales, even if futures sales are slow. His customers are reluctant to pay the premiums for 2009 and '10 Bordeaux and he tries to work his network of négociants to get older wines. But in an era of counterfeits, he is very careful about provenance.
"In '04 I bought from 15 négociants," Adams says. "Now I buy from about five. We're the most expensive store in the country on some brands and I'm not afraid to say it. But we source it properly. I pay a premium for not buying gray market. But I sleep at night."
And Adams goes to Bordeaux himself looking for opportunities to buy directly from the source.
"I was at (Château) Ducru-Beaucaillou a few years ago," he says. "Bruno (Borie, the owner of Ducru-Beaucaillou) poured me some '82. He had some problems at the winery in '82 with hygiene, so he opened every bottle, checked it, and recorked it. He asked, 'You want to buy it?' I bought 25 cases. It was a little high [in price] but every bottle was tested and recorked at the château, and we said that in the email."
What Adams doesn't look for are tiny-production wines: parcels where he can only get a few bottles, like some of the California cult wines. Imagine telling a CEO or hedge-fund boss that he can't have a wine that a top litigator bought from the store.
"We have 40,000-some customers," Adams says. "If we want to make an offer, if we can't get something with 20 cases, I have to walk away. I need stuff that's scalable."
Sherry-Lehmann's sales method is unusual, and a response to its location in the heart of some of the world's most expensive real estate, on Park Avenue at 59th Street. While there are display bottles, most of the inventory is kept in an offsite warehouse. If you want to buy more than one bottle of something that is not in the store cellar, you have to come back later in the day to pick it up, or have it delivered. Most longtime customers call ahead.
The store also has a wine club now, with selections from author Kevin Zraly, famous for his Windows on the World Wine School.
"That was a response to our friends in the media who started their own wine clubs: the New York Times, Zagat, the Wall Street Journal," Adams says. "Those wine clubs aren't real, some third party is doing them. I'm advertising in their media and now they're my competitors. I sat back with Kevin and said, 'Let's do a real club, with real wines.' It's not all private labels like those clubs."
And it shows that Sherry-Lehmann is not all Bordeaux. "Champagne has been very strong since '09," Adams says. "It was the first thing to lead us out of the economic downturn. Champagne is a bellwether.
"I'm fascinated by Italy," he says. "There's a lot of opportunity to participate with a lot of price levels. It used to be true of Bordeaux but it's not anymore. You can buy Brunello at $30 or $40, or $100. You can age it, you can drink it young. And we sell a lot of Chablis. I really like (William) Fèvre – for $20 a bottle, you've got character, you've got vibrancy."
Adams is also trying to make the store relevant to a new generation of customers, both online and in the real world.
"We're very aggressive on Facebook," he says. "We probably have 15-20,000 followers. We do a lot of, 'Here's an event we had at Sherry-Lehmann. Here are photos from it.' But we're also a national sponsor of Bottlenotes. Bottlenotes will have a tasting with 500 tickets available, and they sell out right away to people in their 20s. We have a suite inside, the Sherry-Lehmann suite. We pour better wines: Pichon-Lalande, Chateau Montelena. There's just 50 tickets, and it costs more. We wondered how it would go, but that's the first thing to sell."