Former hip hop producer John Kapon has transformed his family business, 200-year-old Acker Merrall & Condit, into the world’s largest fine wine auctioneer
John Kapon is not your average third-generation wine merchant. After dropping out of New York University during his first semester -“I got bored with school”- Kapon spent two hedonistic years as a rap music producer with a collaboration of artists called Smoked Out Productions.
“I got a little burned out and kind of disgusted with the music industry. It was a fun time but we couldn’t quite get over the hump and I probably knew too much for my own good,” he says with a twinkle in his eye.
Kapon discovered that his real passion lay closer to home. To the surprise of his parents and peers, he decided to join his father Michael in the family wine business, which, at the time, was considered a fusty and unglamorous industry. But he saw it in a different light.
“There’s a camaraderie among wine lovers — you can take a rock star, an athlete and a CEO — and if they all love wine, they all share a bond,” he says.
There’s a camaraderie among wine lovers — you can take a rock star, an athlete and a CEO — and if they all love wine, they all share a bond.
He spent a few years training and running the family’s small Upper West Side shop in New York.
At the time, Acker Merrall & Condit sold wine solely in the US as an independent merchant and did not run auctions. Kapon saw an opportunity to go up against megaliths such as Christie’s and Sotheby’s in wine auctions and 14 years ago started running special events and auctions. In its first year of auctions, Acker Merrall & Condit raised $4 million and became a new alternative choice for collectors who did not want to deal with the bureaucracy of the larger houses, says Kapon.
Since taking the reins of the company, of which he became chief executive officer last year, Kapon has increased revenues from $20.8 million in 2005 to $110.5 million last year, making it the first wine auctioneer to cross the $100 million threshold. He attributes the firm’s success to a crucial decision. As a small, 200-year-old boutique battling for market share against the global powerhouses, Kapon realised it would need a USP. And so, in a daring and controversial move, he shelved sellers’ fees.
“We revolutionised the industry,” he says. “Before, as a seller you were having to pay 15 to 25 per cent to list your wine, which is crazy because sellers need money and buyers have money. So we cut the sellers’ fees and, as a result, we got more and more consignments, which buyers were happy to pay for.”
Kapon’s early decision to expand into Asia, which now contributes up to 70 per cent of the firm’s revenues, was also vital. “You can feel the energy of the economies here, it feels like what post-war America must have been like,” he says. “Pre-2005 it was the age of America; since then it has been the age of Asia. All the best collections are now sold here.”
In Asia, Acker sells over a quarter more wine than its biggest competitor and recently hosted a record wine auction in Hong Kong, raising $47 million through 1,300 lots of Bordeaux, Burgundy and Italian wine. The top lot was a vertical (same wine, different years) collection of eight Domaine de la Romanée-Conti (DRC) vintages, which fetched $354,600.
“DRC has become the most important wine in the world; regular bottles have sold at more than $100,000. It is becoming the wine of choice among collectors, over Lafite.” Burgundy wines have gained more interest among collectors as Bordeaux prices became over-inflated in the last few years, he adds.
With his likeable face and boyish beard, Kapon emanates the straight-talking charm you get from people who are genuinely passionate about what they do. Dr Wilfred Jaeger, a wealthy US wine collector, calls him “the scruffy genius”. At auctions, Kapon is known to slam his gavel and tell overly raucous attendees to ‘shut the f**k up’. He talks slowly and deliberately with a gravelly transatlantic drawl, giving the impression of one surfacing from a hangover, which he possibly is.
“I’m probably the biggest consumer of wine that I know; I don’t know if that’s a good or a bad thing,” he says. “There’s something about wine and civilisation that go hand in hand.”
His pleasure is clear in his unconventional tasting notes, which have gained fame among wine circles, such as a 1911 Moët champagne, which had a “crazy nose of luscious honey while frolicking in an open field”. Almost as an afterthought, Kapon mentions he has recently published a book, a compilation of his tasting notes entitled The Compendium: Tasting the World’s Finest Wines.
So where is the wine auction industry headed? He answers without hesitation: “Online”. The firm’s current website, which can be described as clunky at best, is undergoing a makeover which will enable it to sell more online and host further internet sales. “We are behind the curve on internet sales, as we spent the last few years focusing on live [sales]. Ten years ago I was barely sending emails and now look at us. That is undoubtedly where the future lies.”
One thing is for sure — Kapon will do it his way and it will be radical.