Chris Phelps
Eric Risberg  /  AP
Winemaker Chris Phelps of Swanson Vineyards holds up two bottles of merlot at the vineyard in Oakville, Calif. Oversupply and faltering demand have cut into prices, leaving some merlot grapes hanging on the vine.
updated 11/2/2006 7:34:23 PM ET 2006-11-03T00:34:23

Winemaker Chris Phelps lets his tongue decide when it's time to harvest merlot. Grapes popping with sweetness? Check. Velvety skin with a melt-in-your mouth texture? Get out the clippers.

But this harvest, merlot growers and producers have more to worry about than selecting the best grapes. After a boom in the '90s led to a lot more merlot being planted and made, not all of it great, oversupply and faltering demand have cut into prices, leaving some merlot grapes hanging on the vine.

"There is merlot that's just not going to sell," said Bill Turrentine, president of Turrentine Brokerage in Novato, Calif.

At Swanson Vineyards, a Napa Valley producer of high-end merlot, staff aren't taking the grape's misfortunes lightly. The winery is in the third year of a campaign called Merlot Fights Back, holding tastings and seminars across the country and generally "preaching the merlot gospel," said Swanson's Phelps.

Swanson doesn't expect to have to leave merlot to rot in the fields this year despite the poor market. With production of just 20,000 or so cases a year, most of that premium merlot grown in the Oakville appellation, the winery is small enough to use up all its fruit.

But there are some growers who don't expect to sell fruit that isn't already under contract, said Nick Frey, president of the Sonoma County Winegrape Commission.

The problem is that sales of new grapes are flat and there are still tanks of merlot left over from last year's bumper crop.

Interestingly, the pinot noir red wine variety is "still very hot," Turrentine said — a droll development for those who remember the 2004 movie "Sideways," and its lead character Miles, the merlot-hating, pinot-loving wine snob.

Did "Sideways" put a spin on merlot sales?

Some think yes, although they note that there were a number of behind-the-scenes factors at work, including the overplanting that followed merlot's mid-1990s popularity surge.

"It probably contributed to a trend," said Turrentine. "It is unfortunate, because some people are making beautiful merlot."

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Phelps remembers going to see the movie and groaning when he heard Miles' famous diatribe — "I am not drinking any (expletive) merlot."

But Swanson's merlot maneuvers began before the movie came out, prompted by tasting room staff noticing that visitors were beginning to turn up their noses at merlot. (Swanson also produces pinot grigio, a white wine, as well as a cabernet blend called Alexis.)

Consumer taste in wine is notoriously fickle, a real problem for an industry where it takes three or more years before a new vineyard can come into production.

"It's not like you plant tomatoes this year; next year you plant cotton," said Duff Bevill, vineyard manager for Dry Creek Vineyard in Healdsburg, Calif.

Still, many in the industry don't think consumers have lost their taste for merlot, which is often softer and easier on the palate than other reds, especially when comparing younger wines.

Sales data show merlot is still popular with consumers, though sales growth has slowed.

There were 7.8 million cases of merlot sold in food stores in 2005, according to ACNielsen, a firm that tracks checkout scanner sales in about 3,000 supermarkets and large-volume retail outlets nationwide. That was almost the same as the 7.75 million cases sold in 2004. Overall, merlot's market share dipped slightly from 12.4 percent in 2004 to 11.7 percent in 2005.

Napa-based Wine Opinions, which regularly runs online surveys of wine drinkers, found last March that merlot was still popular with consumers but much less so with the trade — distributors, restaurant wine buyers and sales representatives.

"The bottom line is that the trade has kind of gotten off of merlot," said Wine Opinions owner John Gillespie.

Despite its reputation, merlot is anything but mundane. The grape is grown in the Bordeaux region of France, where it is often blended with cabernet sauvignon and cabernet franc. One French merlot, Petrus, is one of the world's most prized, and pricey, red wines.

And, said Phelps, the '61 Cheval Blanc that Miles so treasures in "Sideways" is a blend of two red wine grapes — cabernet franc and, you guessed it, merlot.

Negative product placement isn't new. According to movie lore — although hard figures aren't so much available on this — Clark Gable hurt undershirt sales when he took off his shirt and was bare-chested beneath in 1934's "It Happened One Night."

Merlot has been winner and loser in the produce placement game. The "French Paradox" story on CBS' "60 Minutes," in 1991 on perceived health benefits of wine, is believed to have given a boost to merlot, then a rising star.

Phelps thinks merlot has been "a victim of its own success. It's so good, it's so universal that producers jumped in who probably shouldn't have." The result was "an ocean of merlot out there," some of it not so good.

He's hoping the market will balance out, yielding fewer but better wines.

In the meantime, merlot fanciers should be on the lookout for bargains.

"You're going to pick up some great values on merlot in the next couple of years," said Frey.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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