The year just past was one of change for many in the wine industry, though not so much for true visionaries who could read grape leaves and who made key decisions years ago that paid dividends in 2016.
One trend that wasn’t hard to see coming was the statewide shortage of pinot noir grapes in 2016 and the consequent rise in prices of any pinot grapes growing almost anywhere.
Consumer interest in pinot noir has been increasing steadily for a decade, but it wasn’t until the summer of 2015 that Constellation Brands, one of the world’s largest wine companies, leaped feet first into the game by paying Joe Wagner a reported $315 million for his wine brand Meiomi, which had garnered inside-the-industry disdain for making a sweet albeit successful pinot noir.
Constellation’s huge financial commitment for a brand that reportedly sold more than 600,000 cases of wine in 2015 (suggested retail price: $25) surely represented what the company saw as an accurate forecast of where the marketplace would be within the next few years for mid-priced pinot noir.
This year the company’s aggressive pinot noir grape-buying went into high gear. Industry wide, the one major comment I heard most often was that there was almost no pinot noir for sale on the open market, such was the demand by larger wine companies to compete in this segment.
If a winery had no contract to buy pinot noir grapes, but only a handshake agreement with a grower, it probably paid more for those grapes than ever; some wineries were told there was no pinot noir for sale. Those who typically got pinot noir from formerly friendly growers heard early on that their usual allotment would be smaller.
One result was a jump in retail prices for the best California pinot noirs. Just two years ago, $50 was considered a lot for a quality pinot. Now it’s seen as a moderate price.
Another trend foreshadowed in 2015, which came roaring to the front this year, was higher acid levels in chardonnay and other dry white wines.
Many consumers still prefer chardonnay to be soft, with actual residual sugar. It is still a popular style of wine in the $5 to $15 price range. But at higher price points, sugar must be matched with higher acid levels to allow the wine to work better with food. I suspect that consumers voted with their wallets and demanded this style of chardonnay, which prompted many wineries to respond.
Another trend that was initially seen in 2014 and 2015 was the attention winemakers are paying to higher alcohol levels. Almost every red wine you can find that sells for $15 a bottle or more says its alcohol is 14.5 percent. In the recent past that meant something closer to 17 percent.
Yes, the government has a regulation that says a 14 percent-plus wine can only be 1 percent higher in alcohol than the label states, but the government also has an outrageously flawed system that simply cannot detect the alcohol in most pricier wines. Nor is there any penalty for violators. And winemakers know of these flaws in the regulatory system.
Consumers also voted in this alcohol matter in recent years, ignoring wines they detected to be too alcoholic. Many winemakers eventually took notice and responded by reducing alcohol levels.