California wine trends: Is merlot in its death throes?

California wine trendsPinot noir isn’t necessarily the reason; how about sweet red blends?

Eight percent of the wine produced in California in 2013 was merlot, up from four percent in 1993. So why does it look like merlot may be on its way out as a varietal?

Think sweet red blends, the hottest California wine trend. There was no red blend category in 1993; in 2013, one out of every 7.4 bottles of California wine was a red blend, about 13.5 percent. That’s a staggering statistic, and speaks to the industry’s ability to give consumers new products on the turn of a dime. Who would have thought that about the tradition-bound wine business?

One can argue that I’m over-reacting, and that merlot is no worse off than cabernet sauvignon, whose share increased just two points in 20 years. But cabernet remains the most popular red varietal and the second most popular overall, and its U.S. sales (including imports) remain strong.

In fact, merlot trailed every category in 2013, including white zinfandel, which the industry gave up for dead years ago. The chart (click on it to enlarge) was compiled by Lew Perdue at the Wine Industry Insight website from information at this year’s Wine Industry Financial Symposium. It’s a revelation:

• Chardonnay, long the most popular California varietal, fell from one of every three bottles to one of every four.

• Chardonnay almost certainly lost market share to pinot grigio (13.1 percent) and moscato (9.8%), neither of which were in the 1993 numbers. Would anyone have thought 20 years ago that California would make more of those than merlot?

• Pinot noir, once thought to be nearly impossible to grow in California, was almost as popular as the red blends. This isn’t so much the infamous “Sideways” affect as it is to the way inexpensive California pinot noir is made – fruity and more like a red blend.

• The “other”category accounted for more than one-quarter of the wine produced in 2015, also staggering. Is our chardonnay and cabernet world changing so quickly that we aren’t noticing? The varietals included in the other category aren’t listed, but I assume it includes rose. In which case, the numbers may not be quite so surprising.

Much of this has to do with the change from the smaller and more traditional producers who dominated the market in 1993 to Big Wine’s control of production today. But that’s a post for a different time.


10 thoughts on “California wine trends: Is merlot in its death throes?

  • By Julie St. John -

    Hi, Well the title is certainly startling. But I question your supposition that Merlot is trailing even White Zin? It says WZ is 4% while Merlot at 8%-unless I am reading numbers wrong? Also Merlot went from 4% in 1993 to 8% in 2013? Wouldn’t that be double? I am not a math whiz (I’m an English major) so correct me if I am wrong here. Also in producing our red blend (which is 60% Merlot) it isn’t necessarily being included in the numbers above-and wondering how much Merlot is in other Red Blends…

  • By Magdeleine Charentes -

    I agree, doubling production of merlot over 20 years is a sure sign that merlot is a zombie.

    Along with you, I remember how all anybody talked about in 1993 was merlot, and how merlot dominated not only wine conversations, but advertising, and the highest scores from Robert Parker, not to mention sales, indicated by the 4% of varietal volume sold in 1993. It was like a merlot tsunami back then.

    In 1996, I was still obsessed with merlot along with everybody else, and I admit that I never thought that moscato and pinot grigio would ever outsell merlot. Ever. However, I thought that rotgipfler and verdicchio would be the hottest wines in the new millenium and that they would crush merlot in production and sales.

    Regardless, merlot is dying. I predict that by 2036, merlot production will dwindle to a paltry 17 million cases or so, probably less than 5% of wines made in California at that time. What a joke. Most of the merlot vines in Bordeaux will probably get ripped out as well. Now that you mention it, it’s kind of surprising that merlot is also still used to make wine in Bordeaux now.

    • By frank martinez -

      My god Magdeleine, your sarcasm cuts like a knife. I pulled out a Sinskey merlot for dinner (and large corkage fee!) at Bouchon this weekend, and it was a beauty as always. Worked with every dish we were enjoying. Smart people make smart merlot, and the sweet red blend drinkers can have whatever swill suits them.

      Thanks for a very good laugh.

      Frank Martinez, Cellarmaster
      Urbano Cellars, Berkeley CA

  • By Scott Simkover -

    Premature death notice from my take as a wine maker. I have been making Dry-farmed Merlot for 9 years now, and it still rates as one of my smoothest wines. Also used extensively in my blends: Fusion (Cab), Sophies Choice (Zin), SyrahZinLot, BaryLot (Barbara)…Scott

  • By Carol R -

    Julie makes some very good points that I echo as well. And given that one of the world’s most coveted wines is a Merlot from Chateau Petrus that retails for about $2,600 per bottle, the demand for ultra-luxury Merlot seems pretty healthy. There are some very positive Merlot trends afoot, esp. in the $20+ SRP luxury red wine segment.

    Overall Trends
    Merlot is the second leading red varietal after Cabernet Sauvignon purchased in the US (shown above). California Merlot consumption was approximately 18 million cases in 2014 in the U.S., having grown dramatically from the 2.8 million cases sold in 1994. Source: The Wine Institute.

    Off-Premise Trends (Source: IRI US Food Data)
    Consumers are buying more luxury Merlot
    • Luxury Merlot ($20+ SRP) sales are +5% in the last year.

    On-Premise (Source: Winemetrics 2015 US Fine Dining Report)
    Consumers are placing an ever higher value on Merlot.
    • Merlot by the bottle prices have risen 4% in the past year to $67.09 from $64.37.
    • Merlot by the glass prices have risen 3% in the past year to $10.96 from $10.68.
    • Along with Cabernet Sauvignon & Pinot Noir, Merlot is one of the top three most important varietal red wines in restaurants.
    • Merlot comprises about 10% of all fine dining placements.

  • By Dan Wildermuth -

    Good observations. Also consider the sheer size of table wine case sales increases from 1993 (44.5 million cases) vs. 2013 (214 million cases) = growth of 169.5 million cases, 381% and then compare varietal growth and the picture looks a little different. There is no doubt merlot is in decline as a stand alone varietal in year on year comparisons and it’s oversupply as a varietal is being utilized as a major blending grape for the hot, off-dry/sweet red blend category. Let’s hope merlot becomes the transition varietal for those drinking red blends as their palates migrate towards better wines.

  • By Steve Shaffer -

    Almost 10x growth in case production (1.8M to 17M) and 100% (4% to 8%) market share growth == dead?
    I’ve love to see the ASP shift for each category. Chateau Petris aside, I expect Merlot and to a lesser extent Cabernet have both moved up market.
    As a small premium/ “ultra” premium wine producer I’ll stay invested in Merlot thank you. Fred Franzia probably wouldn’t want to be here.

  • By Tom Farella -

    Merlot will always play a supporting role with King Cabernet. It’s plushness and other virtues have not changed even though perception changed after boatloads of crappy Merlot were put out when it was a superstar. Look for Merlot being used as a blender to stretch and balance frightfully expensive Cabernet fruit in Napa just like in the days before Sideways. The good news – crappy Merlot gone and Pinot’s ascent is great for red wine lovers

  • By Roger King -

    Good numbers review. What is the amount of Merlot in these red blends?

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