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?