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Drinking Out Loud

Has Pinot Noir Peaked?

Should we now pursue Gamay Noir?
Photo by: Jon Moe
Matt Kramer wonders if Gamay could be the next big grape.

Matt Kramer
Posted: June 21, 2016

Anyone who plays the stock market—or even just observes it from the sidelines—knows that timing is everything. Even Apple Inc., the world's most valuable company, is no longer the stock-market darling it once was, never mind its still-massive earnings.

Why the bloom-off-the-rose gloom? It's all about the future, a "what will you do for me tomorrow?" skepticism about whether the fabled tech titan can continue to innovate. By all accounts Apple is stalled by flat sales of its major profit-maker, the iPhone. That item continues to mint money, to be sure, but it's not the future.

It's no different with wine, if not quite as speedily or disruptively so. Right now we're seeing eye-popping prices being paid by the biggest wine companies for wine brands—with no vineyards attached, mind you—that specialize in big, juicy, unsubtle red wine blends with what might be called "future scalability."

Can anyone doubt that wildly popular brands such as Meiomi, The Prisoner or Orin Swift can be made more popular yet with the marketing muscle and winemaking savvy of Constellation Brands (which bought Meiomi and The Prisoner) or Gallo (which purchased Orin Swift)? I sure wouldn't bet against them.

But what of less commercially-driven wines, ones powered less by brand and more by land? What, particularly, of America's newest wine darling, Pinot Noir? No grape variety in recent years has experienced so meteoric a rise. Pinot Noir has managed the market magic of dramatically increasing production while still maintaining—even increasing—sky-high retail prices.

Has Pinot Noir peaked? No one can say for sure, of course. But if I was to put down a bet, I would say "yes," with the inevitable caveats. One such caveat is that we're probably at the peak of selling this much Pinot Noir at the prices currently being asked.

Sooner or later, every wine category gets commodified. It happened with Cabernet Sauvignon and Chardonnay. And I would submit that it's now about to occur with Pinot Noir. (Some might say that, with the likes of Meiomi, it's already occurred.)

As everyone knows, you can play with statistics to support any position you like. (Ask any stock analyst.) But let's look at the broadest-brushstroke numbers about supply.

As of 2015, California has 44,027 acres of Pinot Noir planted, 90 percent of which is currently bearing fruit. Not all of that Pinot Noir is going into still wine; some of it is sluiced into sparkling wine.

Oregon, meanwhile, has 17,146 acres of Pinot Noir, also 90 percent of which is bearing. The great majority of Oregon’s Pinot Noir is made into still wine.

Together, the two states have 61,173 acres of Pinot Noir in the ground. Is that a lot? Well, in comparison, the most widely planted fine-wine grape varieties in California are Chardonnay, with 96,820 acres planted, and Cabernet Sauvignon with 89,698 acres.

After those two leaders you've got a big drop-off, with another two grape varieties representing a distant second rank: Zinfandel (47,827 acres) and Merlot (44,460 acres).

The scale then drops again by more than half, to a third rank comprising three grapes: Syrah at 18,476 acres planted; Sauvignon Blanc at 15,185 acres and—this may surprise you—Pinot Gris at 15,009 acres planted.

Now, you can interpret these figures in a variety of ways, but I think that on the face of it we can all agree on one thing: At a combined 61,173 acres of Pinot Noir in California and Oregon, there's an awful lot of Pinot Noir sloshing around.

My guess is that Pinot Noir, at its current price points, is now saturated. It's that old supply and demand thing.

So what happens now? Understandably, producers are loath to lower prices. Compared with Cabernet and Chardonnay, yields for Pinot Noir—anything good, anyway—are substantially lower.

Lower yields necessarily translate to higher prices, regardless of grape variety. In Oregon, for example, the average yield per acre for Pinot Noir was 2.38 tons in 2013, and 2.95 tons per acre in 2014. (Cabernet and Chardonnay are easily good for twice that yield without a huge loss of varietal quality.)

Pinot Noir is now the iPhone of fine wine. It likely has reached market saturation and very likely cannot significantly grow sales, at least at the prices being asked now.

So what next?

I think the answer to that question is Gamay Noir. It's in the same Burgundian mode as Pinot Noir. (Technically, the Beaujolais zone, which is all about Gamay Noir, has always been part of the larger Burgundy region.)

Gamay Noir not only shares a similar name (good halo effect there), but also shares similar taste characteristics to Pinot Noir, such as soft, limited tannins, berryish fruitiness, easy drinkability and, at its very best, a capacity to age and transform into something distinctively fine.

Worth noting is that we're currently seeing, at long last, an upswing in both the reputation and price of the best Beaujolais wines, which are the 10 districts collectively known as cru Beaujolais. And this rise in price and stature is only just beginning.

Not least, Gamay Noir can deliver high quality at significantly higher yields than Pinot Noir (yield is where the money is). Gamay neither needs nor rewards the use of expensive new small oak barrels. Not least, it's out the winery door as much as a year earlier than Pinot Noir, which means, of course, faster cash flow and profits.

So everyone is now racing to Gamay Noir, right? Hardly.

Consider this: In 2003 there were just 273 acres of "Gamay" planted in California. A dozen years later, in 2015, that figure surged to all of 304 acres—and that includes grapes such as Valdiguié, a red variety that has nothing to do with the true Gamay Noir but which historically was sold as "Napa Gamay." (The name has been banned by law since 1999.)

Oregon, for its part, is comparably disinterested. So little Gamay Noir is produced in Oregon that its acreage is not even officially tabulated. Yet the few Oregon-grown Gamays that are produced, such as those from WillaKenzie Estate and Brick House, among several others, are exceptionally fine.

If Pinot Noir has indeed peaked—a debatable point, I acknowledge—I ask you: Why not Gamay Noir as the lower-priced Next Big Thing?

D Fredman
Malibu, CA USA —  June 21, 2016 10:49am ET
California Pinot Noir continues to evolve and the market still seems to have an unquenchable thirst for the variety. I agree that in terms of the mass market, the economics don't bode well for increases in volume -- even if producers are able to trim their margins, the growers are unlikely to do so willingly, given the huge investments and commitments they've made to planting Pinot over the past decade.

As much as I enjoy Gamay Noir, I don't view it as the grape variety that'll fill in that aspirational gap between supply and cost of production in the broader PN market. However, Grenache could be a great candidate; although it likes a slightly elevated alcohol level over Pinot Noir, it pairs with food in similar ways as PN and does very well in a broad range of growing conditions. It's not as picky (in general) as PN in terms of weather and it's very versatile in terms of stylistic malleability in the hands of winemakers. The grape costs are still reasonable, and that extra hit of alcohol makes it an easier bridge to cross than PN or Gamay when Cabernet or Zinfandel drinkers want to try something a little different from their usual go-to variety.
John Shuey
Dallas TX —  June 21, 2016 10:00pm ET
Gamay? To tell the truth, my only exposure has been through Beaujolais, and that experience has been, across the board, underwhelming. (Including the Villages, etc.) I am willing to try, but not expecting much.
Eric Hall
Healdsburg, CA —  June 22, 2016 12:17pm ET
I think one point you might have missed is that a lot of people are switching from Cabernet & Chardonnay to Pinot Noir, for different reasons. So there is a lot of room for growth there.

In addition, most people who are "into" California Pinot Noir, are not going to switch to Oregon Pinot Noir. They are just too different.

Eric Hall
Roadhouse Winery
Morewine Bishar
Del Mar, California —  June 23, 2016 2:09pm ET
Matt,

I don't know if Gamay is 'highfalutin' enough to make it to the big time. Despite the fine quality of much Cru Classe Beaujolais these days, those wines just don't get much respect outside geek circles.

As to domestic Gamay Noirs, a recent visit to WillaKenzie Estate opened my eyes, I can tell you! Ripe fruit, plenty of depth, excellent balance and satisfying long finish. Everyone in our party was impressed by the wine and we all bought bottles to take home! More Gamays of that quality would go a long way towards building a following.

David Clark
for The Wine Connection
Eric Campos
Canada —  June 23, 2016 5:16pm ET
Nice idea with this piece, alas, Gamay just isn't an "alpha grape", and too much has been invested in Pinot for the industry to switch to it's poor cousin. I speak as someone who probably likes the idea of Gamay more than the actual wines, due to generally unexciting experiences, despite having had a number of very decent bottlings from my home province. The Gamay exception for me is Jules Desjourneys Beaujolais, but these are outliers is provenance and price, and probably wouldn't appeal to most as a business model to emulate. Maybe Frappato or Nero d'Avola could manage as the next foodie-friendly grapes? Cerasuolo di Vittoria is all the rage for a reason...
Troy Peterson
Burbank, CA —  June 27, 2016 11:03am ET
Having never met a Beaujolais I liked, in 2006/2007 I decided to give it one more shot from premiere producer Georges Duboeuf in the "great" 2005 vintage. I tasted the following wines:

2005 Georges Duboeuf Gamay Beaujolais - Brouilly Dom. De Combillaty

2005 Georges Duboeuf Gamay Beaujolais - Morgon Dom. De Montchavy

2005 Georges Duboeuf Gamay Beaujolais - Brouilly Dom. De Grand Croix

2005 Georges Duboeuf Gamay Beaujolais - Morgon Jean Descombes

2005 Georges Duboeuf Gamay Beaujolais - Fleurie Dom. Des Quatre Vents

If not uninspiring, they were downright insipid and undrinkable. Is it the carbonic maceration technique that is commonly used with this varietal? I don't know, but for me it sure doesn't live up to any ghost of good Pinot Noir. I have sworn off the varietal ever since.
Cameron Spencer
Austin, TX —  June 27, 2016 12:05pm ET
Great piece.

I will echo Mr. Fredman's earlier comment regarding Grenache as a possible up and coming variety in the U.S. After a blind tasting group I am in were all tricked by an elegant and aromatic Grenache from Australia, I have been wondering why we don't see more wines exclusively from this varietal grown in California.

It has the added benefit of already being planted in many parts of California (especially the central coast area) for use in Rhone blends, and I for one would be happy to buy more!
Wimberly Miree
Birmingham, AL, USA —  June 28, 2016 1:35pm ET
Gamay Noir may indeed be the "next great grape," but there are significant relationships of past "great grapes" that are not currently present with Gamay Noir, primary among them being:

Cabernet Sauvignon, Chardonnay, and Pinot Noir, for instance, all have centuries of general acceptance as the best grapes on earth and producing wines commanding the highest prices. Such a "tailwind" and reward is bound to have been and continues to be an enormous incentive to vineyard owners to try their hand at them, and for consumers to support new attempts of them.

Gamay Noir has been around a very long time, but has nothing like the glorious history of these others. Perhaps it could break the mold... , but it seems like much more of an uphill battle.
Mark Lyon
Sonoma, California —  August 1, 2016 3:25pm ET
I appreciate your well researched article, and yes we are seeing a balance between supply and demand for Pinot Noir now in Sonoma County. So, perhaps it has peaked. I have really enjoyed Cru Beaujolais as of late; due to the upsurge in quality since 2009! There are also delightful Pinot Noir-Gamay Noir blends from Burgundy called Passétoutgrain. Why not someone invent Red Blends with some/mostly Pinot Noir with a high yielding grape? And, how about Pinotage in California? Finally, there are some high yielding clones of Pinot that could offset pricing issues, namely Clone #32 for Pinot Noir.
Robert Williams
St. Paul, MN —  September 6, 2016 9:10pm ET
I remember tasting cheap California Gamay years ago, and it was a dead ringer for candy apple or cherry lifesavers. It was the sweetest red table wine I have ever tasted. I concluded that Gamay wasn't suited for California. Oregon may well be better. At least, it wouldn't be sweet.

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