New World Red
April 2021

This month, both selections offer a chance to look at Wine Economics 101, pre-pandemic, and how domestic supply and demand before COVID continues to impact the wines we are selling now. It is fair to say that the last year was not as any of us expected, so the paradigm has shifted a bit from projections made early last year. We will take up the impact of COVID and the 2020 fires in California with a few selections in the fall. 

The dynamic for wine supply and demand is the same as other commodities, whether it’s oil, corn or gold. For this wine economics scenario and our features this month, we need to go back before the pandemic in January 2020. At that time, wine market reports cautioned of slowing demand for wine, while at the same time domestic production levels were at historic highs. This created a bit of a glut in bulk wine, which a surprising number of wineries rely on, and grape supply in late 2019 and early 2020. 

It is important to understand that in the US, producers generally have less flexibility with their pricing than those in many of the European wine-producing regions. This is because many of them do not own vineyards, so they are at the mercy of the market when purchasing grapes and bulk wine. While many have contracts to maintain stable pricing, the terms are often set before the harvest, and so the winery is locked into a price, regardless of market conditions. That means even when consumer demand goes down, they are stuck with higher production costs. This also means wineries often cannot lower their prices without losing money and frequently the value of their inventory is tied to loans, but that is a much bigger topic than we need to discuss here. Suffice to say things looked bleak.

Enter our two intrepid wine producers, Jon Hirsh of Inception Wines, and our old friend John House, of Ovum, Andrew Rich and in this case, Salt Flat. Both found different ways to take advantage of the market conditions to bring us wines that punch way above their weight class. 

2016 Inception Red Wine  – $18

John Hirsch of Inception Wines originally only desired to make great Chardonnay and Pinot Noir from the cool climates of Santa Barbara and Central California. Born and raised in Los Angeles, he would frequently escape to the area and fell in love with the elegant, less in-your-face qualities than wines from Northern California. During their first meeting last summer, Tim was extremely impressed with all of his offerings in Pinot Noir and Chardonnay, and then we came to our feature wine. 

To understand the origin of how this red wine came to be, you must understand that Jon is the consummate networker and was well entrenched in the LA restaurant and wine scene. He quickly found himself sourcing wines for private label clients, Wolfgang Puck and Delta Airlines to name just a couple, using his network of growers in the Central Coast. While working on these projects, a few of his Inception customers asked if he could produce a red blend, but something different than the sugary sweet, Prisoner and Apothic wannabes dominating the market. 

At the time that Jon started to work on this blend, there was a small ocean of wine sitting in the tanks of the biggest producers in California, many of which are not wineries but do supply them. Bulk prices plummeted, and so he had his choice of varieties and regions to source from, while still bringing to us a wine with good value. He used a somewhat unusual blend of grapes, rather than the typical Cabernet Sauvignon/Merlot blend: Malbec 30%, Sangiovese 20%, Tempranillo 30%, Zinfandel 10% and Merlot 10%. The Sangiovese, Tempranillo and Malbec are all from Los Alamos in Santa Barbara County. This region has warm days and cool evenings, so these late ripening grapes come in with plenty of natural acidity, which gives the wine a dryness and savory quality. The Merlot is Central Coast and adds nice color and body to the final blend. The Zin gives that bit of spice on the finish and rounds the mid-palate. On the nose, you will find that mission fig, ripe plum and anise accompany earthiness to reveal a complex aromatic profile. On the palette, this wine is broad, with a nice pop of fresh fruit, a hint of tobacco and black pepper. The nose is opulent, the palate restrained; this wine is rich and warm, layered, with a long finish. Enjoy this wine over the next two to three years with barbecue, fajitas or pizza and a movie.

2017 Salt Flat Pinot Noir –  $30

Most of you will recognize the name John House from his relationship with Andrew Rich wines, which we featured in the first quarter. However, John has his fingers in many pies, including his dynamic Ovum brand which he produces with his wife Ksenija. He is also the principal partner of Le Caves, which was one of Portland’s hottest little wine bars (pre-COVID) and sources a number of private label wines for clients across the US. You see, Oregon, much like California, has an even bigger problem where production is outpacing demand. This leaves a good bit of wine sitting in cellars, often completely finished and just waiting to be put into bottle. Enter Salt Flat.

For his Pinot Noir projects, John works with several wineries that have produced more wine than they can sell. He buys a little here, a little there, and cobbles together some really great examples. In fact, our Explorer Club selection this month, EZY TGR (Easy Tiger) is an example where John has produced a much larger quantity, 1,300 cases, of his own label. While looking for some barrels of something special to augment that blend, an iconic winery in the Dundee Hills offered him a few barrels of their reserve wine. This is a textbook example from our wine economics lesson, where a producer cut their own production down after the wine is made to create scarcity and sustain a high price. While we can’t share the producer, I can say this wine comes from one of the most prestigious, respected producers in the heart of the Dundee Hills of Willamette Valley. When I visited the property, it was breathtaking, with all the high-end qualities you would expect; from the lovingly nurtured, estate-grown fruit to the processes in the winery where no expense is spared, this is the real deal. 

The French clone grapes were harvested and sorted by hand, then fermented in wooden, concrete and stainless steel tanks. During primary fermentation, tanks were pumped over twice daily, and near the end of fermentation, tanks were punched down and pumped over up to two times per day. The wine then spent almost a year in barrel, much of it new French oak. Our feature price is exactly half of what the winery is selling this wine for, and it could legally be labeled as Dundee Hills AVA too.

Aromatically, the wine is full of ripe red fruit, spice, toasty vanilla, a bit of rose petal and herbal notes like bay leaf. On the palate, the wine shows fine tannins, raspberry, red cherry, strawberry, spice and nice savory notes. This is a balanced wine, with a lot of complexity and long finish. Best enjoyed over the next five to six years.