Young Wine Dealer Having a Corking Good Time of It
BETHESDA, Md. — The aura is not that of a man who has made his fortune in rare wine.
He seems, first off, too young to have made a fortune, and too unpretentious to be dealing in fancy wines, appearing more like a friendly character from “Animal House†who has been stuffed into a pin-striped suit against his will.
At an age when many people are still in business school, 24-year-old Jason Korman, college dropout, is already where most of those students aspire to be: driving his DeLorean to the bank to make use of his line of credit. Buying, selling, trading. “Cutting a deal,†as he likes to put it.
Owner of Petaluma Winery
His current challenge--the biggest yet, he says--is an effort to attach some cachet to the wines coming out of a small California winery in Petaluma that he recently bought when it encountered financial problems. He bought it, he said, partly to counterbalance his bigger business, dealing in high-priced foreign wines while taking advantage of the currently strong American dollar.
The International Wine Exchange specializes in moving rare wines, anything from $10 Austrian Rieslings to the 16 bottles of 1945 Mouton-Rothschild Red Bordeaux that Korman lists at $625. Per bottle.
“It’s cyclical,†Korman says of the wine market. When California wines went down recently, foreign wines went up. And if the cycle reverses itself again (he says it will), Korman will be on both sides of the game, able to tilt the balance whichever way the wine-purchasing wind blows.
And his so-called peers will still be in school.
“I come across those guys all the time,†said Korman, who has the easygoing nature of a kid who grew up not that long ago in Great Neck, Long Island.
Korman is still a little-known figure in the wine industry, partly because his rare wine exchange operation is relatively small and unusual.
Columnist Peter Meltzer of the nationally published Wine Spectator says Korman “represents a refreshing exception†to the philosophy of the run-of-the-mill wine dealer, “namely that in America, it is well-nigh impossible to specialize solely in fine wine. Despite his youth, Korman has demonstrated that an aggressive and well-conceived buying program can result in a commercially viable and satisfying endeavor.â€
Korman’s La Crema Vinera wines are beginning to get favorable reviews in wine publications, but to help spread the word Korman has hired Gray & Co., Washington’s largest public relations firm, whose fees are such that a Saudi prince and several entire countries are among its clients.
Korman is the antithesis of many common practices. Instead of living in the suburbs and working in the city, he shares an office in this Washington suburb, commuting to a rented Georgetown townhouse in the heart of the city.
At a time when higher education is becoming astronomically more competitive, technical and important, Korman is a college dropout who left George Washington University business school after one year, soured, he explained, by an argument he had with his “Introduction to Business†professor. The assignment was to write a resume that would count one-third of the final grade, and his professor did not believe him when Korman listed his experience working in his father’s garment business, setting up his own gourmet food cart business, and making and selling wines. At the time he took the course, Korman was only 18, not old enough in many states to buy wine, much less sell it. (When he was 14 he had even tried to grow Johannesburg Riesling grapes in his parents’ backyard, but that didn’t work.)
Told to ‘Drop Dead’
“He thought I made it up,†Korman said. “He told me to drop dead, basically.â€
So, that was his Introduction to Business, and his Goodby to College.
“I don’t think it’s as important as everybody makes it out to be, to be in school forever,†Korman said. “If you’re going to go work for a Fortune 500 company, that’s one thing. But if you’re going to be in what I consider to be the real business world where it’s doing business and it’s making deals and it’s trying to make a buck, it’s not really the way they teach it. . . .
“My personal belief is all you need is the desire to sort of win and to be able to work and have a fair amount of common sense.â€
Example of common sense: what Korman calls the Gucci theory.
He bought some $10 bottles of wine that tasted terrific, so he put them on his dealing list at $30 and recommended them highly to his customers, “figuring I’d make an incredible killing on it,†he said. “Nobody wanted it. And the reason was: It was too cheap. On the next list a month later I put it on for $75 and sold every bottle we had.â€
Korman knows quite a bit about wine, but that is not the key to his success at all.
‘Wine or Widgets’
“It could be wine or widgets,†said Korman. “This is a commodity business, like the stamp business or gold futures. You have to know what the market is and play the market. And in order to do it you have to really be on top of things.â€
And you need something else, too.
“I’ve been able to set up unique financing arrangements, which is really the key to the success of the business,†Korman said.
At 18, Korman had dropped out of college for a year between semesters to take care of his father’s business, which had plunged into bankruptcy a few years after his father’s death.
But his interest in business, wine and ultimately the wine business started long before college. He was the kind of kid who took telephones apart and put them back together again, the kind who was more interested in his father’s business than in sports or school. When he was about 11, he recalled, he gave his older brother a wine-making kit for his birthday.
“You know the Kitchen Magician commercials that are on at night?†Korman said. “At that time they were selling Vino Wine-Making Kits on late-night TV.â€
His brother was not thrilled with the gift, so Korman took it and made his first batch of wine from Welch’s Grape Juice.
Wild Stuff
“It was wild stuff,†Korman said. “I used to make a gallon, then it was five gallons, and by the time I was 17 or 18, I was ordering 400-pound barrels of grapes from California. My parents thought it was really funny that they had a kid who was making wine in the basement.â€
Like a kid collecting baseball cards, Korman began to collect information about wine, reading books, getting on mailing lists. He followed prices and was amazed at the lack of uniformity, particularly in the rare wines.
When Korman was 16, his father died. “After that I was alone a lot,†he said. “I had a few thousand dollars saved up. I started to buy wines, put them away and eventually resell them. When I was about 17 I started to buy (by telephone) from Christie’s in England and Sotheby’s. I had borrowed about--I still have the records--a total of about $10,000 from my brother, mother and a couple of friends of the family. And I started to trade the wines around Europe.â€
From that start seven years ago at 17, Korman has grown to oversee a wine exchange that he said did more than $1 million in business last year. He has run and sold a street-vending ice cream business in New York, leased another vending business in Washington, has some real estate investments and has his new pet, the La Crema Vinera winery in Petaluma. He won’t say if it was his first million, at least in revenues.
“I don’t know about first millions, second millions. I don’t know,†Korman said. “The value of assets is very subjective. For my age, I guess I’m pretty successful. But it’s for my age. I’m not a Wall Street mogul.â€
Some Strife
His success has not come without a certain amount of strife. He works 60 or 70 hours a week. “When it’s real busy, more than that,†Korman said. There are “frequent cash flow problems,†particularly when a wine he has arranged to buy and sell gets stolen or misrouted, as sometimes happens. “Occasionally, there’s too much pressure,†he said.
And then there was his 21st birthday. He was running the Corner Gourmet vending cart business in Washington at the time, selling nuts, drinks and croissants. He had not paid any pre-paid tax on the croissants, because he figured they qualified as bakery items, which do not require tax. But when the District of Columbia Finance and Revenue Department did an audit and decided they should have been taxed, there was trouble.
Going to New York
“On my 21st birthday, I was going to go to New York,†Korman said. “I got a call at 5 in the morning that the D.C. Finance and Revenue had five squad cars at the storage warehouse with guns drawn, sealing the place up. They hadn’t even assessed the taxes yet, but they told me they were afraid that when I heard how much it was I would take the stuff and go. That afternoon I had to round up $10,000 as a deposit. They came after me personally for $25,000. It was one of the worst experiences of my life.â€
In another misadventure, an employee made off with the carts, which costs $2,000 apiece, he said. Although Korman sued and got the equipment back, and although the carts pulled in $20,000 a week in peak selling periods, Korman said, he decided “the amount of money I was making wasn’t enough to justify the aggravation.†So now he leases them to other businesses.
Currently, he devotes himself to finding rare wines, mostly in private cellars, and arranging to import and resell them. He has compiled a list of buyers, including many fine hotels and restaurants, and he mails them lists of what he has in stock at what price. At the same time, he is trying to get his La Crema Vinera wines consumed at the right places, and he was thrilled when Interior Secretary William Clark served it at an inaugural affair at the historical Decatur House.
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