Grape Market Insights: Will rain spoil merlot's parade?

The 'sleeping beauty' varietal just might awaken for ’11 harvestI stood in the rain and checked the calendar on my watch. It said June but it sure looked like January. I was standing in a merlot vineyard with the self-proclaimed “Best Damn Grower in Dry Creek.” (I probably should not mention that his name is Jim Ricci, so keep that to yourself.) This grower was convinced, as growers often are, that the merlot crop will be light this year. I tried to disagree, but it was hard to argue with him in the pouring rain.

There are two ways for a grape variety to become scarce. The obvious and best way is through growing demand. The sneaky way is through shrinking supply. Unfortunately, merlot has not had much growth in consumer demand in recent years. Pinot noir has stolen merlot’s niche as a high-class but lighter alternative to cabernet sauvignon.

The 2005 movie Sideways also made merlot go sideways. The movie promoted the glories of pinot noir but took a swipe at merlot.

This may have affected the trade more than consumers, but a less enthusiastic trade means fewer innovative marketing campaigns and less merlot on restaurant wine lists. So it doesn’t look like merlot’s bacon is going to be saved by rising consumer demand anytime soon.

But consider the rise and fall of North Coast merlot tonnage and acreage (see the table): Acreage is evaporating and tonnage shrinking.

To put the tonnage numbers into perspective, one ton of grapes produces about 65 cases of wine. This means the 2004 crop of Sonoma County merlot was equivalent to nearly 1.5 million cases of wine. If you compare that to the 2010 crop, there is a decrease of about 395,000 cases of Sonoma County merlot wine.

How little merlot is too little? It’s hard to say. Cabernet sauvignon sales are growing faster than supply, and that will encourage winemakers to look for good merlot as a blender for their hot cabernet sauvignon programs. Marketers may also get more enthusiastic about promoting merlot as they run low on other red wines.

So is merlot a sleeping beauty that will finally awake this year? Or will she see her shadow and crawl back into bed for another year? (Or is that the groundhog?)

The market right now is caught between uncertain demand and uncertain supply. Demand in general is picking up, but the sputtering economy has everyone nervous.

With a wet year and good growing conditions, the 2011 crop was projected to be at least average, but these late rains make the industry anxious.

Personally, I think the sleeping beauty merlot is finally going to wake up sometime before harvest this year. But then, what do I know? I’m so stupid I stand around in the pouring rain trying to argue with the best damn grower in Dry Creek.


Brian Clements is vice president and partner of Turrentine Brokerage (, a Novato-based marketer of winegrapes and bulk wine in California and abroad.

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