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On Merlot and Syrah. This is a good read if I do say so myself

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For all the bashing that Merlot supposedly got in Sideways—and the conventional wisdom following that 2004 movie is that Merlot sales fell off the cliff, because Americans supposedly believed that, if Miles wouldn’t drink any “fucking Merlot,” then they wouldn’t either—Merlot sales actually remained pretty strong.

Yes, California has lost a little acreage of Merlot over the years—not much—but the message to producers, that consumers still like this wine, has not been lost. And, if you needed further proof that Merlot is still a very, very popular wine, then check out the Sonoma State University/Wine Institute’s latest consumer survey, as summarized in winebusiness.com.

You can see that, in terms of “favorite wine varietals,” consumers reported Chardonnay a strong #1, by a 50% margin. But guess what wine was #2? Hints: It was red. It was not Cabernet Sauvignon or Pinot Noir.

Answer: It was Merlot.

Now, granted, this survey covered relatively inexpensive wine: As the article states, the most common [bottle] price was $10 to $15.” This explains why the #3 favorite wine was White Zinfandel while #4 was Pinot Grigio. Cabernet Sauvignon, which is by far the most widely-planted red wine grape in California (second only in acreage to Chardonnay) was ranked only the #5 favorite wine. But I suspect that, had the survey targeted a higher price point—say, $20 and above—Cabernet would have scored higher.

What was most surprising to me in the results was how poorly Syrah performed: It was #12, dead last, the choice of only 10% of respondents. That put it behin even Malbec and Muscat (whose glory days are fast disappearing). This is very odd, given a few heartening factoids gleamed from recent Crush and Acreage reports in California, among them that planted acreage of Syrah is decreasing in the Central Valley (where it peaked around ten years ago), but is increasing in prime coastal areas especially the Central Coast, and that even though the average price per ton paid by buyers for Syrah grapes has risen only a disappointingly low 5% over the last decade, that was a statewide average: If you look at prime growing areas (Napa Valley, Santa Barbara County, Sonoma County), Syrah grape prices are up a healthy average of 13.6% over the last ten years. That’s not bad, for a variety that, anecdotally at least, has been pronounced dead in the water. (The joke has been going around for years: “What’s the difference between a case of Syrah and a case of venereal disease? You can get rid of the V.D.”)

So as usual when it comes to statistics, there’s a little bit of everything. Syrah lovers can take hope that the grape and wine are poised for a comeback. Syrah bashers will find evidence that they’re right and have been all along.

Still, there’s plenty of Syrah in the ground in California, at least 21,000 acres, more even than Sauvignon Blanc. Those grapes aren’t going away anytime soon, so what should producers do with them? Well, some wineries have established cult reputations for their Syrahs (Sine Qua Non, Colgin, Alban, Saxum and so on), but they are so far off the chart in terms of price and rarity that we can effectively discount them from our calculations as outliers. Other Syrah producers do indeed face a dilemma: not a huge one, but a pesky one: They have enough of a loyal fan base for their Syrahs, but it’s not growing, and may be shrinking (this is where consumer research really helps, but not all wineries have the resources to do it), so they have to figure out what they’re going to be selling—which means what consumers will be buying—five, ten and more years out. You can always bud your Syrah over to another, more popular variety, but it does take a little time for the transition; a vintage may be lost in the process. And what would you bud it over to anyway that makes more sense?

My own hunch is that Syrah will always have a solid foundation, a “floor” if you will. Problem is that the floor level is likely to remain pretty constant, so producers are going to have to fight it out among themselves to attract loyal customers, and these sorts of fights, necessary as they are in the business, are not things that Chief Financial Officers look forward to. There is one other option: GSMs. I think Rhone-style red blends from California have a good future. You don’t have to call them GSM on the label; they don’t have to strictly be blends of Grenache, Syrah and Mourvedre; there’s no reason you couldn’t blend Syrah, Grenache and, say, Tempranillo, or Merlot, or Petite Sirah, give it a proprietary name, and make a pretty damned good wine. (Paso Robles has been doing a good job in this.) The advantage of such blends is that they don’t suffer from the “Syrah” word (if, in fact, you believe that consumers shy away from that word out of confusion with Shiraz, or Petite Sirah, or for other reasons they’ve adapted to). If you believe that consumers have a bias, conscious or not, towards Syrah, then sales-wise you’re always starting from behind the starting line, which is a huge disadvantage: you first have to overcome that consumer gap in trust. If, on the other hand, you’re selling a proprietary blend or a GSM, you’re right on the starting line: no harm, no foul, may the best wine win. Can a winery come out of nowhere and establish a reputation for cult Syrah? Yes, in theory. Several from Washington State have done it. Here in California? Probably not.

  1. That was “then” . . .

    From Napa Valley Register “Wine” Section
    (October 09, 2002, Page Unknown):

    “Wine Connoisseurs Embrace Syrah”

    Link: http://napavalleyregister.com/business/wine-connoisseurs-embrace-syrah/article_1f00cdb7-7c2d-5f21-b127-00bcc461534a.html?print=true&cid=print

    And this is “now”:

    From San Francisco Chronicle “Food & Wine” Section
    (March 6, 2011, Page Unknown):

    “As Syrah Falters, Make Way for Grenache”

    Link: http://www.sfgate.com/wine/thirst/article/As-Syrah-falters-make-way-for-Grenache-2389708.php

    — AND —

    From Napa Valley Register “Wine” Section
    (October 01, 2015, Page Unknown):

    “Syrah and the Blends”

    Link: http://napavalleyregister.com/lifestyles/food-and-cooking/wine/columnists/dan-berger/syrah-and-the-blends/article_6962ccb3-b374-56a8-9e9e-c5b028a145ae.html?print=true&cid=print

  2. Merlot category may be BIG, but STRONG, it is not. AC Nielsen has the category, all sizes, all prices, down 5.3% Syrah, by the way, is down 18.3%

  3. Too true about Syrah. “Hiding it” in a blend can work. But you still have to get it into somebody’s mouth. The Merlot budget folks think blends are cheap nasty wines and not “cool”. The next group up think varietals (100%!!!) justify a price over $20. So you are left with a small crowd and a lot of competition for luxury wines. Needs a catchy name for the the Syrah based category that real people like to say. They like to say “Pinot, Chardonnay, Merlot, Pinot Grigio”. Maybe Zinfandel. Room for one more? Maybe,

  4. One doesn’t need to guess at the Sideways effect or go with anecdotal stories. There is actually hard data surrounding this questions. Look at this complete study conducted by Sonoma State University.

    https://www.sonoma.edu/users/c/cuellar/econ494/SideWaysEffect-JWE.pdf

    The wine industry needs more ‘fact-based’ analyst.

  5. Some Thoughts on Syrah says:

    As an avid fan of Syrah, I also recognize the difficulty in choosing to make and sell it. From a consumer’s standpoint, unless they have a chance to taste it, they don’t know where any given bottle of California Syrah will fall on the style spectrum, whether they’re getting more of a Northern Rhone or a Barossa Shiraz. That’s a huge gamble. On the other hand, while most producers in Napa, say, have some house style associated with them, they all tend to live in a fairly tight stylistic range. Significantly less risk involved. I myself am hesitant to purchase California Syrah–at any price point–unless it’s vetted, either by tasting it myself or reading tasting notes from my go-to reviewers. Rarely do I buy blind.

    From a seller’s standpoint, this is daunting. However, my girlfriend works in a Sonoma County winery tasting room that sees fairly heavy traffic. The winery makes mostly Pinot Noir, with some Chardonnay, Zinfandel, and also Syrah. While they understandably sell and are known for their Burgundian varietal wines, tasters that try the Syrah (Hey, it’s included in the paid tasting flight, so why not give it a shot?) very frequently end up buying some. What’s usually a black box on the shelf is now at least a known quantity, and–hey!–a pretty good one at that. For a heavy traffic tasting room, that’s a lot of full-price wine going out the front door.

    I’m not saying that California could or should standardize the stylistic interpretations of Syrah, but it’s a huge advantage in the marketplace to have a known quantity. All that now being said, I can’t help but spit in my own glass: Chardonnay has an equally wide spectrum of interpretation, and it sits comfortably at the top of the heap. Ah, well.

  6. Asutin,

    Wine industry needs more of this thinking:

    http://www.amazon.com/Facts-Dangerous-Half-Truths-Total-Nonsense/dp/1591398622

    ~~ Bob

  7. Syrah is too diverse to standardize its presentation IMO. In Santa Barbara County alone are three dramatically different Syrah zones, with Sta. Rita Hills producing elegant upper Rhone styles, Happy Canyon having huge, beefy ones, and Ballard Canyon defining itself in terms of Syrah with several wineries producing marvelous, nuanced Syrahs in between. – Yes, blends are the way to bridge the trend, and yes, not just GSMs. We’ve noticed Syrah become “an unofficial Bordeaux grape,” showing up in what are otherwise California Bordeaux-type blends. Lines between Bordeaux and Rhone are gone for creative California wine makers (one popular Sonoma wine we distribute is Petite Sirah, Syrah, Petit Verdot, Cabernet Sauvignon, and a little Grenache – not unusual).

  8. Merlot has been such a steady sleeper varietal.

    Had a bottle of A Rafanelli Merlot with friends a few months ago and it was absolutely amazing. The psychological forces in this industry are funny to watch but sometimes pretty real.

    Chris

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