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MERLOT

I just love a nice rich Merlot. They’re just so soft and smooth.

If I had a penny for every time I’ve heard that, well, you know the story. In the 90’s it was all the rage. From businessmen to 20-something socialites, everyone loved Merlot. Grape growers planted it like mad, and the market boomed. But then along came Sideways, a Hollywood movie that vilified Merlot, and suddenly the party was over. It wasn’t cool anymore.

But Merlot will always be one of the best grape varieties, and true wine lovers remain perplexed by the market’s fads. Its quality potential is up there with the best in the world, showcased by wines like Chateau Petrus. So whilst Malbec and Shiraz are now the current popular choices, Merlot isn’t going to go away any time soon.

Grape growers love Merlot. Surprisingly, it is the most widely planted grape in Bordeaux, and you’ll find plenty of it in the south of France, northern and central Italy, Australia, New Zealand, and both North and South America. It’s even the most planted grape in Romania, and you’ll be able to quench your thirst with it at dozens of wineries in Bulgaria. Can’t wait.

Growers love Merlot because it ripens a week or two earlier than Cabernet Sauvignon. In frost prone areas, or places that can get serious downpours in the Fall, that extra week or two can make the difference between a successful vintage and a wash-out. 1998 in Bordeaux is a good example of this. It’s was a spectacular vintage in St.Emilion and Pomerol, but the Cabernet dominated vineyards of the Medoc were not so lucky. It started pouring with rain before the grapes were fully ripe.

Another reason for its popularity amongst grape growers is because it can yield a bumper crop. I know that wine is all about the romance to those who drink it, but when you’re trying to make money out of producing it then yield becomes one of the most critical factors. Some varieties, like Pinot Noir, tend to produce lackluster wines when cropped above 4 tons per acre, but not so with Merlot. And as a grower, I want to produce as many grapes as possible, at quality levels suited to my commercial goals.

Merlot is also tolerant of a variety of different soil types, and doesn’t mind being planted in heavy clays. This is the primary reason why it thrives on the so-called Right Bank of the Bordeaux region, which is dominated by clay and limestone. But you’ll also find it producing some superb wines in the silty loam soils of Washington State, and some Okanagan wineries even have it planted on pure sand. So when it comes to soil types Merlot seems to be less picky compared to various other varietals.

So if you’re contemplating planting a vineyard then Merlot is often on the list of potential candidates. It’s popular, you can grow lots of it, it’s not so fussy about soil types, and it will even ripen early for you. Hey, it might even turn out to be great quality and sell for big bucks.

But grape growing issues aside, much of the final quality will depend on how it’s made in the winery. At the top estates in the world you’ll typically see it treated to a lengthy maceration of 2-4 weeks, with the goal of extracting plenty of flavor and tannic structure. It takes well to oak, particularly French, and can be matured for 2 years in barrel before bottling. Although it has a reputation for being soft and smooth, high quality Merlot can require at least 5 years in bottle before it comes around to showing its potential quality.

On the other hand, if you are making Merlot for the cheaper end of the market, then you’d typically go for a much shorter maceration, perhaps just one week or so, to limit the tannin extraction. And those French oak barrels can run you $1,200 a pop, and so many wineries opt for wood chips, which cost a fraction of the price but don’t give quite the same result. Obviously the marketing department is not inclined to tell you their wine is matured using their finest oak chips. Once it gets into bottle you can open these types of wine immediately, and they are usually more pleasant to drink than a Cabernet of the same age.

You’ll often find Merlot blended with other grapes, especially Cabernet Sauvignon and Franc, but also potentially Malbec and Petit Verdot. This can be done for both premium and inexpensive wines, and is the way a winemaker can sculpt his product to the house style, or adjust it to meet market demands.

So the quality of Merlot can be all over the map. You can buy a bottle at the gas station in the U.S. for peanuts, or you can go a little crazy and load up on a new vintage of Petrus at $3,000 a bottle. But the glut of uninspiring Merlot, along with the impact of Hollywood movies that have slandered the grape, has caused it’s popularity to wane. Despite this current fashion for other varietals, when it comes to truly fine wine, there’s never been any question that Merlot is amongst the very best grapes.

After all, the finest wines can age for over 50 years. True, they don’t have quite the same longevity as Cabernet Sauvignon, but they certainly do have better ageing potential than Pinot Noir and most others. So when it comes to stocking the cellar for the long haul you’ll certainly want to consider the finer Merlots as an option.

So what should you buy? Well, the great wines of St.Emilion and Pomerol on Bordeaux’s Right Bank are still the benchmark. Pomerol is the classic appellation because the wines typically have a higher percentage of Merlot in them, usually around 80%, with just a splash of Cabernet Franc and maybe Sauvignon. These are usually tiny estates, producing a few thousand cases of wine, and hence the prices can be stratospheric. Enter stage left Petrus, Le Pin, Vieux Chateau Certan, La Conseillante and a dozen others. One of my best ever bottles was a 25 year old Petrus. I finally understood what all the fuss was about. It left everyone almost speechless.

But the top wines of St.Emilion are spectacular too. Ausone, Angelus, Le Dome, and so many others. These tend to be slightly less opulent than Pomerol, but are always dense and concentrated all the same. If you can wait for 10 years or so you’ll see the deep ruby color turn a shade of brick red, the nose open up to reveal a spectrum of complex nuances that can include fruitcake, licorice, black cherry, chocolate, coffee, tobacco, vanilla, mushroom and wet earth. They’re to die for.

If you are intent on drinking a French Merlot but only want to spend $20 then the south of France is your best option. Since the 1990’s there have been huge plantings of this grape in the so-called Pays D’Oc. But the wines, whilst deep and full bodied, tend to have much less complexity than in Bordeaux and are more suited to a casual BBQ.

In north eastern Italy there is a surprising amount of Merlot, but I wouldn’t be in a hurry to buy these. They tend to be light in every way – color, body and ripeness levels. Instead, buy the Super Tuscans that have a heap of Merlot in them. Masseto and Tua Rita are the benchmarks, 100% Merlot, and astronomically expensive. My personal favorite is Luce, which is a blend of Merlot and Sangiovese, and is a very fine wine for around $100.
If the recent turmoil in the stock market has you searching for a deal on European Merlot then you probably can’t beat the prices of Hungarian, Romanian and Bulgarian wines. It’s surprising just how much is planted here, and the prices can be under $10 a bottle. I’ve tried several and the quality can be pretty reasonable, but most west coasters just can’t get over the negative brand image of most of these countries. I suppose they might slip down better if you’re hoping for a return to Communism.

If I was looking for a high quality Merlot from the New World then I would be heading for the California and Washington sections of the store. Duckhorn in Napa made a mark with some gorgeously rich and plummy Merlots, and now the grape is widely planted in California. These wines tend to have less earthiness than their Bordeaux counterparts, and burst with ripe berry fruit and the warmth of higher alcohol.

In Washington State Merlot is the most widely planted grape, and it typically plays a role in many of the finest wines. These are under-rated by consumers, but not under-priced. The local demand in Seattle for the best wines results in prices being in the high $70’s+ in western Canada.

South America, especially Chile, can produce some exceptional Merlot, both in terms of value for money and absolute quality. Sena is a benchmark amongst the famous labels, but I’m also impressed with the likes of a basic Errazuriz Merlot for just $15.

New Zealand is a sleeper, that has recently shown what it can do with Merlot. A few years ago the best wines from Hawke’s Bay on the north island were put up against the finest wines of Bordeaux, and guess what? The Kiwis stole the show. But I’m more inclined to drink Pinot Noir from New Zealand, just like you would be to drink Shiraz from Australia.

One of the nice things about Merlot is that some of them can be drunk without food. They don’t have the astringency of most Cabernet and so they can slip down without much “bite”. But really these go so much better with red meats, and so whether it’s a steak, roast beef, a leg of lamb or a burger you’ll enjoy them much more than flying solo.

WINE—–>FOOD PAIRING
Chateau Petrus , Pomerol 1990—–>A nice inheritance
Chateau Le Bon Pasteur, Pomerol 2000—–>Roast beef and Yorkshire pudding
Chateau Grand Mayne, St Emilion, 2005—–>Steak Frites
Tua Rita, IGT Toscana, 2005—–>Pasta in a tomato sauce
Duckhorn, Napa, 2000—–>Leg of lamb
Woodward Canyon, Washington State, 2006—–>Stew
Errazuriz, Sena, Chile 2006—–>Bison

Deals in Dallas

Step off the plane and a wave of intense heat smacks you in the face. Welcome to Dallas. It’s hot, it’s flash, it’s BBQ, and it’s bad fashion. But they do have the Cowboys, they live large, and they love to drink wine. Yes Sir, the Texans have drunk themselves into the top 10 States in the US for consumption. So you gotta love ‘em.

We had a distributor there so one day in about 2001 I went to visit. One of the fascinating things about Dallas is that there are dry communities, where basically you cannot buy an alcoholic drink. So on one side of the street you can have a dry community and on the other side a wet one, where anything goes. This is something quite unique in the world. It’s also an experience for a foreigner to see a store selling firearms right next to the liquor shop. No comment.

Texas has a fair sized wine industry itself. There are quite a few vineyards and a number of major distributors. Plus there are some very fancy restaurants where big spenders slap it down on the prestige names. I was stunned when the Sommelier at a smart restaurant told me that “the Lafite 82 is showing very nicely”. At $6,500 dollars I’d better hope so. How’s that for a gutsy recommendation. Note to self: don’t ever ask again 😉

After the usual meeting with the owner of the import company it was time to go and sell some wine. Basically in the USA the number of distributors is generally shrinking. So the portfolios of the guys who remain can become very large. This means that the sales rep has hundreds of wines to sell. So unless the winery representative gets out with the sales reps then your wines are often forgotten, and sales are much more limited compared to if you go there and sell for them yourself.

For the sales rep the situation is totally understandable. They sell wines they either like, or that are company mandated, or that have deals or incentives on them. They can only propose about 3 or 4 brands in an average sales call before the Buyer calls it quits. So to get some fast action for the winery, there’s nothing like a sweet deal to get the sales reps and Buyers attention.

It goes like this. You saddle up to a retailer, taste your wares out of plastic disposable cups (a travesty), and after a pause, the Buyer spits out his proposal. Gimme one in ten and I’ll take 30 cases. The owners of my company were Bordeaux aristocrats and were abhorred by people even suggesting such a deal for their fine wine. Our wine was art. It was French. For them, the answer was always “non”.

But sometimes I had to make deals, but it was a slippery slope.

I’ve nothing against the method of discounting and incentivizing to sell wine, although sometimes there are much better alternatives. Some types of wine are a commodity, sold in very large volumes at auction where the lowest bidder wins. Large UK supermarkets will do auctions for monstrous suppliers to fulfill their own label wine requirements, like “Australian Shiraz” , which can be for some ridiculous volume like ½ million cases. Basically the wine is bought on price, and taste secondarily. If the Shiraz is actually red, it’s already 50% of the way there.

Certainly in the USA the major wineries send their sales force out equipped with deals, limited time offers, merchandise, and if you can buy a lot of wine, and I mean a lot, then the private jet just might be offered. And some big winery groups will actually lose money in order to get their wines on a major list. They chase volume sales, and the ability to say that they are on certain lists, hoping that this somehow pays off in other ways. But it can be the poison pill to operate this way. Warren Buffet #1 rule of business? Never lose money. Rule #2? See rule #1.

Now not all buying is done like this. Often wines are purchased on their quality merits, especially the better wines of course. For a top estate offering a discount is the kiss of death. It kills the brand prestige. But for lower priced wines it’s almost expected to discount. After a while you can analyze wine lists and figure out which companies own all the brands, and then you can clearly see who is juicing the Buyers. It would typically come down to a dollar amount per case, and the powerhouse wineries usually sliced up most of the serious volume wine lists between them. So next time you’re in a major chain restaurant or hotel the chances are that “the deal” played a big role in getting that wine on the list.

No darling, I’m sorry to say it wasn’t just the pretty label depicting lovers holding hands in the vineyard that got it on the list. But please, don’t burst my bubble. It was surely the label and that lovely “minerality” that persuaded the Buyer…

Selling wine Stateside

New York City

One of our major markets within the United States was New York City. We had a very successful importer there. So with our agent for the USA we went to meet with him.

Hustle and bustle, people strutting their stuff, cabs honking, skyscrapers gleaming, it’s dog eat dog in NYC. We go down a back alley into a warehouse and up an elevator to the top floor, which was their office. Although the back alley wasn’t that swank, particularly the aromatics, the office sure was smart. And smack dab in prime position was a huge desk where the man himself sat, cigar in hand, barking out orders to his staff. The intensity of the office was high-stress. Everything was urgent. Small talk was out.

Within seconds it was our turn to get blasted by Monsieur, the boss. “Oh well bonjour! Look, it’s the idiots from Bordeaux with their ridiculous new prices. Get out!” The formality and politeness of our Japanese importers was a distant memory. I looked at my agent to see if he was serious, but he just chuckled. But it was clear to me that he was dead serious, and he wanted us to leave.

Full blown warfare erupted. It went from the importer cursing about the price increases to the agent yelling about unpaid invoices, and then a few personal shots were fired. Then suddenly there was some laughter, a few resolutions, and then the agent launched into the sales. “You should take 250 cases of Chateau X, come on, you can sell it, I’m putting you down for 250 cases, we will ship next month, done, …OK?” It was beyond aggressive.

And what I learnt about selling wine in the US, or at least in some of the major east coast markets, is that you’ve got to be direct and tough, and ask for the order. In fact, sometimes you have to fight for it. The sales reps are often on commission only, and they sell to live. Every month they take home the commission on whatever they sold, and that’s it. So they hustle. They hunt. And you’ll never see sales reps as slick as some of these guys in NYC. We would go and visit major retail accounts, taste wine with the Buyer out of plastic cups, and if you didn’t make a sale for the Reps then they were not happy at all.

Yes, some of the refined sophistication of a soft sell was gone, and our company had always had a soft sell approach which I preferred. But you had to admire the directness, and it sure cut to the chase. I have always been perplexed by wine importers who do not commission or clearly bonus their staff on sales. If reps are paid regardless of their sales results then one day, sooner or later, the hustle is gone.

The 800 pound gorilla, aka UK supermarkets

If you want to see wine producers and importers get their knickers in a twist then ask them what it’s like trying to sell to the UK Supermarkets. It’s like your average guy trying to sleep with Kate Moss. Basically you’ve no hope, and so the best course of action is to slag her off.

UK Supermarkets account for a whopping 85% of all wine sold at retail. At least that was the figure back in 1998, it’s probably higher now. So effectively if you want to sell a serious amount of wine then off you go to see the likes of Tesco, Sainsbury, Waitrose etc. In the UK these Buyers have the keys to the kingdom. Kate, reincarnated as a wine buyer, but not nearly as hot.

I gleefully told my PDG that I had scored a rare appointment with Tesco. He scoffed, muttered “bon chance” and burst my bubble by adding it was a waste of time. I made some snarky comment about the French losing market share to the New World in the supermarkets and it set him off. His tirade, in translation, went something like this…

All that these supermarkets want is to grind you down for every last centime, demand listing fees and money for advertising and all kinds of other crap, then they clean you out of stock by purchasing thousands and thousands of cases so you have nothing left for your other clients, and then when the contract is up for renewal they take the next winery who comes along with a good deal and buy their wine instead, kicking you to the curb. Et en plus, some of these Buyers just came from the pet food department and know NOTHING about wine.

I’ve left out the swearing. He was so mad he was foaming at the mouth, obviously having been bitten by Carrefour in France too many times. But undeterred I still went to my meeting at Tesco. They were very polite and friendly, and I zeroed in on a particular petit chateau that seemed to be of slight interest. By the end of the meeting I better understood why the New World was taking over the market. I imagined the difference in conversation between me and Lindemans Bin 65 salesman, in front of the Tesco Buyer.

How much stock do you have of this wine?
Me: 2,000 cases and that’s it
Bin 65: As much as you want – it’s unlimited, we have it on tap in Australia.

What about the quality of the next vintage?
Me: We’re in Bordeaux so you never know.
Bin 65: It’s the same every year…

What about pricing next year?
Me: Can’t guarantee anything, and in Bordeaux things don’t like to go down…
Bin 65: Pricing is fixed, no problem

What about promotional support?
Bin 65: We can do “buy one bottle get one bottle free”
Me: ZERO, nada, at best I can give you a company corkscrew, but just one of them, specially for you.

Having subsequently been a Buyer for some large hotel and retail groups I can totally sympathize with the Supermarkets approach. You have the buying power, and you want to leverage it. But the one outcome that I have seen is that the small producer really doesn’t stand a chance, and yet these are the companies that often make the most exciting wines. So really the end consumer loses out. Instead, you see all the big brand names lining the shelves, and all you can think about is how much they paid in listing fees to get the sale. Feeling rejected and unappreciated, you can’t help but take a few shots at Kate.