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Friday Read: Merlot

Published:  26 July, 2019

Can one film realistically change consumer attitudes to two grape varieties?

Released in 2004, the film Sideways has been widely credited with depressing the market for Merlot, based on a memorable line in the movie - “No, if anyone orders Merlot, I'm leaving. I am NOT drinking any fucking Merlot”.

The line was delivered by the protagonist Miles Raymond, who’s equally soulful eulogy to Pinot Noir can be recited by any member of the trade “thin-skinned, temperamental. In need of constant care and attention”. Just like the angst-ridden, wine-obsessed character himself.

Fifteen years later, Pinot Noir remains the darling of sommeliers, with the number of global hectares planted increasing every year. In California, Pinot Noir production has increased over 170% since Sideways was released, while Burgundians continue to invest in regions outside of their homeland, cashing in on insatiable demand.

“As land prices in Burgundy have reached astronomical levels, producers are, of course, searching for new opportunities in emerging regions like Oregon - Limoux is also now attracting the attention of Burgundy houses, as the higher altitude, cooler vineyards are some of the most suitable in the Languedoc for growing Burgundian varieties,” says Badet-Clement president Laurent Delaunay.

But what about poor old Merlot. Discounting the big hitters such as Right Bank Bordeaux, Masseto and other famous examples, is the grape a busted flush? A panoply of evidence - statistical and anecdotal - both reinforces and contradicts that proposition.

On the one hand, sales of Merlot in the UK on-trade have declined significantly in the 12 months to April 2019, with sales of Australian Merlot (volume 9lr cases), having declined 11.7% in the UK hospitality sector, while in the same period value sales were down 11.0%, according to CGA Strategy.

In addition, IWSR Drinks Market Analysis data shows that global consumption of Merlot fell 2.1% in 2018 vs. 2017 - the five-year compound annual growth rate (2013-2018) was -0.9%. Demand fell 11.8% in China last year, with a CAGR (2013-2018) of -4.4%.

Australians are also seemingly going cold - demand in 2018 was down 5.9%, with a five year CAGR of -3.9%.

“I don’t want to blame the film, but I think it absolutely had an effect on the collective consciousness regarding Merlot. That quote seems to be the line that people remember most,” said US-based sommelier Zach Jones.

“At Pacific Standard Time in Chicago, Merlot has been an incredibly hard sell. I thought having a California-themed restaurant would make Merlot an easy sell. But domestic Merlot just doesn’t seem to speak to diners. When it comes to selling right-bank Bordeaux - it’s a different story. But I’m still baffled by the disparity in sales (especially because we carry a few great Merlots from California). My best guess is that guests are more inclined to accept Merlot as part of a classic blend than as a mono-varietal expression.”

However, Clare and Keith Mugford, joint owners of Margaret River's Moss Wood, argue the grape's problems began long before the film was released.

“Our experience suggests the biggest issue with Merlot has been quality. Too many producers, especially in Australia, have churned it out as generic dry red. While Sideways was a something of a hit worldwide, I suspect all it did was alert consumers to this issue,” said Mugford.

“As far as future demand is concerned, I think it will depend on winemakers producing better wines and bringing this to everyone’s attention.This is a challenge for the industry. Merlot produces big crops but there is a commensurate dilution in quality as a result. High quality will only result from well-managed vineyards and in the modern era of cost awareness, this may be frowned upon by company accountants,” he added.

Jeroboam's wine director Peter Mitchell MW argued that it is competition from Malbec, a far more trendy varietal, that has done Merlot the most damage in the UK on-trade.

"Expensive Merlots have always been hard to sell and remain dependent on getting good critic scores,” said Mitchell MW. “Sales of our cheaper Chilean and French Merlots have slipped slightly over the past year, mostly at the expense of Malbec which has become the go to by the glass red. In our retail shops, we have little market for varietally labelled, pricey Merlot.”

Yet in global terms the grape remains incredibly important, not least as a significant part of the bulk wine industry, due to its (typically) generous yields. Discounting table grapes, Merlot is the second most widely planted grape globally after Cabernet Sauvignon.

Some of the world's best-selling wine brands are 100% varietal Merlots, including Isla Negra Seashore Merlot, Echo Falls Merlot NV, Blossom Hill Merlot California and Casillero del Diablo Merlot. In overall volume terms, the grape is clearly far from a busted flush.

“For most (if not all) consumers, the Sideways ‘effect’ is no more real than Unicorns (unless you’re a politician),” argued Fuller's wine buyer Neil Bruce.

“In the mainstream-premium on-trade we operate in, Merlot vastly outsells Pinot Noir. With both priced mainly at £22-26/bottle on wine lists. But, the debate falls flat on its face when you get to proper, higher priced wines, where neither varietal is stated on the label. And both are lapped up by those consumers with the suitable levels of disposable income.”

Mark Newton, senior partnership development manager, CGA Strategy, said: “Although Merlot is in marked decline, it remains the largest red varietal by a significant margin – seeing well over double the volume sales of its nearest competitor, Shiraz. Among consumers Merlot is also still the top red choice to purchase when drinking wine out of home.”

So as it turns out, Miles' disdain for the grape puts him in a relative minority – demand for mass-market Merlot, overall, remains buoyant.

The luxury end of the market, though, is a different story. Sommeliers and buyers approached were uniform in their advice – if you're selling expensive Merlot, then follow the St-Emilion/Pomerol philosophy and forgo making any reference to the grape on your front label. Otherwise, implored Zach Jones, “you'll be pursuing commercial suicide”.