48 Hours: Horsing Around With Jed and Amie Benedict

Spanish missionaries introduced wine to the americas in the early 17th century. Grapes toiled in obscurity, much like bankers in tiny cubicles, for hundreds of years. But American consumers, flush with cash, are turning to wine and wine collecting in increasing numbers. They have quickly figured out that their bedroom closet is no place to store precious nectar.

Wine is big business. And not just for winemakers and retailers. The auction market for wine is booming. There are even hedge funds who view it as another asset class in the alternative world. It is a liquid market. No joke.

There is a raging Bull Market in wine.

Sales of Eurocaves are booming too. But meticulously assembled collections require storage space beyond anything that a Eurocave can provide…

Thats where Horse Ridge Cellars of Somers, CT comes in.

1440 wants to introduce you to the only “Caveman” you are likely to meet outside of a Geico commercial.

Jed and Amie ditched the Wall Street rat race for a less stressful life.  They certainly found that...and built a business that caters to the big-money crowd along the way. We would not trust just anyone with our precious wine stash...and they keep track of it better than we could ever manage.

Grab a sweater...its all of 55 degrees inside the cave…

Tell us about what yo do and the services you offer?

Horse Ridge Cellars offers short and long-term wine storage and related services. Transportation in climate controlled vehicles, inventory management, valuation, specialized insurance and introduction to buyers and sellers. Soup to nuts.

Is your storage facility actually a former bomb shelter?

Yes the facility was a cold war bomb shelter. The “vault” has a 12 ton bank vault door and was originally a document storage facility. It was built in 1962 and lies 15 feet below the ground with about 90,000 cubic feet of storage.

Awesome. I should have holed up there during the bear market. Where in the world did you get the idea to start this kind of business?

A friend of mine joked that it would be great to store wine there and a light bulb went off.  At the time i had just started my MBA program and we built a business plan around the idea.  We entered a competition from a class we were enrolled in and ended up winning the contest. We received seed money as part of the prize and started in April 2000. And here we are.

What is your typical client demographic profile? Wall Street types?

Yes, mainly Wall Street and financial services. Probably 70%-80% live in NY, NJ and CT. About 80% have wine cellars in their homes but have run out of space. The remainder of my clientele live all over the world.

What is the minimum you will deal with? Not everyone is a Rothschild. Please don’t worry, my average reader is filthy rich.

The minimum is 25 cases. My client’s average 120 cases in storage.

Whats the damage?

Our fee schedule is tiered ranging from $1.25 to $1.05 per case per month. Other fees include insurance, inventory handling and transportation. At the end of the day our fees are considerably lower over time than building a home or portable cellar. Most of the wine we store is long term in nature. Wine that they do not plan to drink for at least 10 years.

Are shipping laws for wine still an issue?

The shipping laws have changed a lot since the Supreme Court decision eased restrictions. Many states have relaxed their regulations and UPS and FedEx have adapted.

Have you ever broken a bottle of Petrus or other high-end wine?

Well I am proud to say we have been lucky in that respect.  We have probably moved more than a million bottles of wine since I started and have only broken 6 bottles, the most expensive was about $100.

You break it, you own it.  What is your capacity?

We are presently about 90% full so we are drafting expansion plans. The addition will still be underground which will preserve the look and feel of the facility. We are actually environmentally friendly, we rarely need to run HVAC equipment given the steady temperature.

What do you drink yourself?

I like to dabble. I have some clients that only drink Red Burgundy or Bordeaux. You can find great wines pretty much in every region these days.  I love Bordeaux, Rhone wines and some California wines.

My harried readers like to pick stocks. They can’t do it all. Do you have any wine picks for them?

I would never turn down first growth Bordeaux! I like some of the Turley wines, Chateau Montelena and some others like Relic, Realm and anything by Bob Foley.  Burgundy is too expensive. I have just started exploring the Barolo’s and Brunello’s too.

I am excited about the demographic trends in the business.  Wine consumption is at all-time highs with 21-35 year olds. It has actually overtaken beer. In the end that means more selection and better quality as consumers move up the price points. People are really taking to it.

Thanks Jed.

Go visit our friends at Horse Ridge Cellars. Fair warning...Jed’s teeth are likely to be stained red. Lucky guy.

In vino veritas...

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