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Syrah was to be one of the stars in Washington State’s wine lineup. But something happened along the way to greatness, and wineries have watched Syrah wine sales drop and inventories build. In the short term, creativity in blending and marketing may be needed to reduce backlogged inventories, while Washington’s wine industry works to distinguish itself from other Syrah areas.

Washington winemakers and growers had great hopes for the red wine grape varietal, believing more than a decade ago that it would be the next great wine for the state. It was first planted in the state by Mike Sauer at Red Willow Vineyard in the Yakima Valley appellation in the mid-1980s and, at 2,800 acres, has become the third most-planted red variety in the state. Early on, growers liked the variety because it was grower friendly and adaptable to a variety of locations. And Washington Syrah wines received critical acclaim from local and national press.

“With a richness of fruit, dark color, and soft, round tannins, Syrah seemed to be everything that consumers should want in a wine,” said Brian Carter of Brian Carter Cellars, Woodinville, who led an in-depth look at the variety’s strengths and future direction during the Washington Association of Wine Grape Growers recent meeting. “Syrah has many success stories, but maybe it got some chinks in the armor along the way. I know there are some Syrah inventories in wineries here in Washington, Australia, and California that people would like to see move.”

Disappointing sales

Brett Scallan, vice president and group brand director for Ste. Michelle Wine Estates, gave a marketing perspective during the Syrah panel discussion. Scallan, with 25 years of marketing experience, has been with Ste. Michelle for the last ten.

In the evolution of the Syrah category, the variety came on strong in 2000 with the Australian Shiraz invasion, he said. Consumers embraced the variety much like Merlot. But in recent years, data compiled by The Nielsen Company have shown a marked contraction in Syrah sales. Nielsen gathers the data from U.S. grocery, drug, and major market liquor stores. While there still is vibrancy on the high end of Syrah wine sales, he said that in the $10 to $15 bottle range, consumers are stepping back.

It wasn’t long ago that Syrah’s future was rosy and sales were steadily climbing. But since 2008, Syrah sales have been going downward. In 2009, Syrah sales in the United States were down 7.8 percent from the previous year, and Shiraz sales were down 9 percent, he reported.

Of the top 25 Syrah and Shiraz brands in the U.S. market in 2010, all of the bigger brands showed a decline in sales, Scallan said, although there was an occasional increase for smaller producers. Nielsen data for the second half of 2010 showed that, overall, the Syrah/Shiraz category was down 10 percent compared with the same time frame the previous year. The $8.00 to $9.99 (750-­ml bottle) price point showed the biggest drop at 16.6 ­percent. Only the luxury segment of $15 and up posted an increase, which was 5.2 percent.

“This is not a good picture for the Syrah category as a collection,” he said, adding that table wine, overall, is doing better than the Syrah category. “People are not embracing Syrah/Shiraz, and we are finding that the variety is lagging way behind in what’s happening in other varietal categories.”

He blames confusion for part of the consumer’s disinterest. “Is it Syrah or is it Shiraz? California makes it one way, Australia another. Barefoot Cellars has both Shiraz and Syrah.” Australia fatigue could also be a factor. He explained that Australia sent an incredible volume of wine and Syrah to the United States in the last decade, and consumers are now moving on to something different.

The pleasure factor of Syrah works well for consumers, and they like the taste and profile, Scallan said. “But from a broad consumer basis, they don’t get the concept of Syrah as a varietal. There’s been some confusion, but that’s where perception becomes reality.”

Call it a red blend

But wine is like fashion, Scallan said, and the pendulum swings both ways, with things coming and going out of fashion. Wine producers have to be prepared for changing consumer preferences.

The latest category showing strong growth in sales is red blends. Overall, the category posted a 38.4 percent increase in sales during the second half of 2010 compared with the previous year. Ultrapremium red blends, in the $10 to $14.99 price range showed the greatest increase at 78 percent.

He believes there is opportunity for Washington to position Syrah in the luxury segment, which seems to be doing fine, as well as in the red blends category.

Ste. Michelle Wine Estates is capitalizing on the red blend excitement with its Columbia Crest Two Vines wine Red Blend. The wine, made from grapes of Columbia Crest’s Vineyard 10, is predominantly Syrah (about 90 ­percent), though it varies slightly from year to year to maintain style.

The red blend has consistently been rated as a best buy and best value in several wine publications, Scallan said.

“Calling it a red blend instead of Syrah has worked well, and people are connecting with it,” he said.