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03.2009

Massachusetts Beverage Business

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Article By: Bill Nesto, MW

PasoRobles is an Approved Viticultural Area AVA, positioned halfway down the huge Central Coast AVA as it stretches from just south of San Francisco to just north of Los Angeles.

Its 24 square mile surface is positioned at the northern edge of San Luis Obispo County and contains 26,OOO acres of vineyards and 17O wineries. Though it is a huge AVA in size and output, it is only in the last 5 years that US consumers have noticed the wines. Before then its wines and image were, for the most part, buried within the heavily-branded wines bearing the California state appellation. Today, although 58% of its production is sold in bulk, the high intensity wines of a new generation of Paso Robles producers have caught the attention of journalists, the trade and consumers.

Paso Robles’ history is tied to its heritage vine variety, Zinfandel, and the Italo-American families, such as the Dusis and the Presentis, who settled there in the 192Os. They embraced “America’s” variety. Several of these “heritage” families continue to farm grapes, principally Zinfandel. In 1963, Dr. Stanley Hoffman, a San Luis Obispo physician, acting on the advice of the famous enologist, Andre Tchelistcheff, planted several hundred acres of Pinot Noir, along with Cabernet Sauvignon and Chardonnay. The wines of his Hoffman Mountain Ranch estate were labeled HMR. When I was a sommelier in a Boston area restaurant during the late 197Os and early 198Os, I recall how HMR wines were my first contact with Paso Robles and San Luis Obispo. Though the HMR wines were well-made, the wines did not sell well enough to prevent Hoffman Mountain Ranch from going out of business.

During the 197Os and the 198Os, America’s fascination with Cabernet Sauvignon and Chardonnay and low land costs in Paso Robles encouraged large scale plantings. In 1973, Gary Eberle and Cliff Giaocobine planted 7OO acres of vines. Their venture became the Estrella River Winery. The Estrella River brand also came to my attention as a sommelier in the 198Os. In that decade, Wild Horse and Arciero Vineyards (rechristened later as EOS Estate in 1998) were born and rapidly grew into large wineries. These large scale ventures were located on prairies well to the east of Hoffman’s venture. In HMR’s vicinity, Justin, a venture of smaller scale than Estrella River, Wild Horse or Arciero, pioneered a hands-on boutique image that was to become popular in this part of the Paso Robles growing area. In 1983, recognition came to Paso Robles as an Approved Viticultural Area. Though it might have put Paso Robles on a map, it did not put it on the map. Few consumers or members of the trade knew what or where Paso Robles was.

Nineteen eighty-eight was the year when Paso Robles’ largest wineries established themselves. Nestle/Beringer purchased Estrella River Winery, and put the facility into the service of its Meridian brand. Jerry Lohr, a large grower-bottler from the Arroyo Seco area of Monterey County, bought a large tract of land and moved the focus of his brand, J. Lohr, to Paso Robles.

In 1989, a famous producer from France’s Rhone Valley, Chateau de Beaucastel, partnered with Robert Haas, the former owner of US importer Vineyard Brands, to found Tablas Creek in the hilly western section of Paso Robles, not far from the former HMR. Considerable international, as well as national, attention followed. The move established the view that the AVA could be a great site for RhÔne-style wines. Chateau de Beaucastel sent cuttings to Tablas and Tablas propagated them. At Tablas and other wineries, these cuttings replaced older cuttings which were beset with viruses or poorly selected.

From 1995 to the present day, the dominant trend has been the creation of many boutique-sized wineries, each usually with a capacity of several thousand cases. The low land costs, the bucolic setting far away from urban areas, and the wine bug have attracted wealthy retirees, investors and successful professionals. The prairies and hills of Paso Robles have become the fields for their dreams.

The important North/South running Highway 1O1 seems to slice the western one-third of Paso Robles off from the eastern side. The western boundary of the Paso Robles AVA gets as close as 6 miles to the ocean. At the coast, the Santa Lucia Mountains rise quickly to 38OO feet above sea level. The mountains protect the AVA from excessive ocean influence. The Cholame Hills covering the northeast end of the appellation are the final barriers to ocean influence.

There are, however, two channels for cool, moist ocean air to flood into the heart of Paso Robles. These two currents dramatically alter the climate. The most important and consistent current comes over the Templeton gap, a low section of the Santa Lucia Mountains centered on Route 46. The cool moist air streams down into the town of Templeton. From Templeton, the cool air has two principal pathways. It flows north along the Salinas River valley then turns southeast into a prairie that extends from the town of Paso Robles to the town of Creston. The Templeton Gap wind can also continue north along the Salinas River Valley turning east into the Estrella Prairie, a large triangular-shaped swathe of undulating plain roughly bordered by the Salinas River, the Estrella River and Highway 46. A less important avenue for cool air funnels down the Salinas River Valley from Monterey Bay. This channel allows cool morning air to flow from the town of San Miguel into the Estrella Prairie. The effect of these two ocean breezes combined with cool nighttime air that flows down from the mountains cause huge variations between day and nighttime temperatures. Summer daytime temperatures range between 85 and 1O5 degrees Fahrenheit. Nighttime temperatures usually drop by 4O to 5O degrees. These factors give Paso Robles the greatest diurnal temperature excursion of California coastal appellations, a factor which extends the vine’s gestation period and preserves aromatic precursor compounds as well as grape acidity. Temperatures vary greatly from place to place. Depending on the day, at any given moment there can be 2O degrees difference between temperatures in eastern and western locations. Box canyons which localize weather as well as elevation cooling make mesoclimatic variation the rule in the hilly western end of the AVA. Some vineyards there are planted at elevations over 15OO feet.

The absence of rain during the growing season and its late onset in autumn also give Paso Robles an advantage as a growing area. The hilly areas west of 1O1 benefit from rain that the mountains pull from ocean storm systems. Vineyards at the far eastern end of the AVA can receive up to 45 inches per year. Tablas Creek winery, for example, receives 28 inches on average, enough to dry farm. To the west, the Paso Robles appellation gets consistently less and less rain. At the town of Paso Robles, rainfall averages 15 inches per year. At San Miguel to the north and Shandon to the east, the average is 7 to 8 inches. In the last few years, the west side of 1O1 has been behind the rainfall curve. Without an irrigation system, the vines there can be stressed to dangerous degrees and give tiny yields. Though he gets top quality fruit, Eric Jensen of Booker Vineyards finds it difficult living off the 1.75 tons per acre he has been getting. When I visited his winery last October, he told me that 3 tons per acre would be a healthier yield both for his vines and his balance sheet. East of 1O1, irrigation is necessary. Thanks to a large aquifer under the Estrella River Valley, the 2nd largest aquifer in California, water availability is not a problem.

The onset of autumn rain is very late, usually in mid-November. It occurs about 4 weeks later than Mendocino County, 3 weeks later than Sonoma County, and 2 weeks later than Napa County. Growers can usually wait for whatever ripeness level they want. The boutique winemakers tend to pick very late, seeking to make deep colored, high-extract red wines. Larger scale commercial growers prefer to harvest earlier, trading high ripeness for more tonnage per acre.

The patchwork of soils is as complex as the climate. A simple generalization, though, is possible. The west side is characterized by calcareous shale with an unusually high pH of 7.4 to 7.6. This formation is one of several localized geologic uplifts of ancient sea-floor that pop up between the San Benito Hills south of San Francisco and the Santa Rita Hills north of Los Angeles. Mudstone and clay are also commonly found there in concert with the calcareous shale. These three soils retain water well enhancing the possibility of dry farming in the hills west of 1O1. East of 1O1 the soils are either igneous or sedimentary in origin, composed of varying proportions of sand, clay, gravel and loam. The fast draining character of these soils makes them ideal for irrigation.

The danger for all of the Paso Robles AVA is frost. In April 2OO8, at Tablas Creek in the west, there were 18 nights when the frost alarm went off. At Steinbeck Vineyards on the Estrella Prairie, frost also hit in April. During flowering in May, there were 3 days of over 1OO degree Fahrenheit weather. A strong north wind then blew off the flowers causing shatter in the Bordeaux varieties. The Merlot crop, in particular, suffered. Crop load was down 5O%. A sudden mid-October frost prematurely ended the long growing season and caused a further crop reduction.

Any discussion of Paso Robles inevitably depends on East/West Paso comparisons of climate, soil inches and wine industry perspective. Though this generalization helps identify truths, it also reinforces overly simplistic generalizations. Paso Robles growers and wineries have submitted a proposal to the Trade and Tax Bureau (TTB) which defines 11 sub-AVAs within the larger Paso Robles AVA. The TTB, however, has shelved consideration of any new AVAs until it reassesses the entire AVA concept and the process of registration. Because the Paso Robles proposal has a strong basis in scientific and historical fact, it steers a course away from the marketing-driven issues that have increasingly influenced AVA creation. The acceptance of the sub-AVAs would be one step in a long march away from overly simplistic, but in the meantime useful, East-West conceptualization.

Red wine production has always been the strongest card of Paso Robles producers. Cabernet Sauvignon is the leading variety with 38% of wine-grape acreage. Top quality Cab fetches $25OO per ton on the bulk market, a big saving when Napa Valley Cabernet costs $4OOO per ton and up. The excellent quality/price of Paso Robles grapes is the reason why so much of Paso Robles wine ends up in California appellation blends. Though Merlot is the second most planed variety at 15%, producers don’t seem to take it seriously. In its heyday of popularity, producers viewed it as a cash crop. The strengthening of the market for Cabernet Sauvignon has made Merlot less desirable. Merlot’s tendency to shatter is a liability that makes yields variable. Shatter could be much reduced by siting Merlot in cooler zones such as the El Pomar area south of the warmer Estrella River Prairie. The Syrah rage is sputtering here as it is elsewhere in the USA. It is stuck at 1O%. Gary Eberle gave the vine an early Paso initiation when he was, in 1974, the first post-prohibition California grower to plant it. Syrah is proving difficult to sell. The best Syrah wine I tasted in my winery visits was Booker Vineyard’s “Vertigo”, 2OO6, a blend of 9O% Syrah and 1O% Grenache. Though Zinfandel follows at 9%, it remains indelibly associated with the image of Paso Robles. Josh Beckett of Peachy Canyon, who buys Zinfandel from both West and East, told me that he finds a huge difference between the quality of West and East Zinfandel grapes. The West side Zinfandel vines tend to be older and furnish lower yields of higher quality fruit. West side Zin grapes cost about $2OOO per ton. The wines are concentrated. East side Zin costs $1OOO per ton and the resulting wines are fresh, easy-drinking and lower cost.

Chardonnay amounts to 8% of total wine-grape acreage in Paso Robles. Steve Lohr confided, “It is difficult to make a good Chardonnay here.” In most places in Paso Robles, it is too warm. The most exciting variety at the moment seems to be, at 4% of the Paso crop, Petite Sirah. The East side seems to be the perfect location for the variety. East side Tempranillo also has a strong following. Grenache is in great demand as a base for blends and fetches the highest price – $3OOO per ton. Pinot Noir needs careful siting and faces stiff competition from outside Paso Robles. I sampled a surprisingly aromatic and refreshing Grenache Blanc at Tablas Creek. Roussanne, Marsanne and Viognier are planted here and there, principally for use in blending. Mourvedre is difficult to ripen in some sites. Producers, such as Martin and Weyrich Winery, do more than play with Italian varietals such as Sangiovese and Nebbiolo. The wine that I appreciated most during my October stay in Paso Robles was a 2OO6 Petit Verdot from Calcareous Cellars. From my perspective, Paso Robles wines are generally too alcoholic. The high alcohol creates a hot sensation in the mouth and pulls out bitter flavors from the skins and seeds of the grape and the oak. The Calcareous Cellars Petit Verdot combined a refreshing elegance with a complex astringent texture.

The most noteworthy trend is the proliferation of proprietary blends, which emphasize a fanciful brand name over a simplified blend identification such as Meritage or GSM. Boutique producers sell them either through wine club or cellar door sales. The uniqueness of the product, the catchy wine names with endearing anecdotes in tow are ideal either for the hand-sell environment of the winery tasting room or its online extension, the winery website. Moreover, the RhÔne trend is Southern RhÔne not Northern RhÔne, and Southern RhÔne wines are all about blending. At Tablas Creek, 8O% of production is wine blends. During my visits to wine producers, the Robert Hall, Pape de Robles (Grenache 51%, Syrah 22%, Mourvedre 15%, Petite Sirah 12%) was a standout for this genre. Justin has been a leader in Bordeaux blends with its famous Isosceles brand. The blending variations often move out from the traditional. Linne Calodo, for example, makes Rhone-Zinfandel blends. L’Aventure makes Bordeaux-RhÔne blends. Tablas Creek would like to popularize white RhÔne blends. Jason Haas at Tablas noted that the day-night temperature variation is much greater in Paso Robles than in the southern RhÔne. Day-night temperature variation is more important for white wines than for red because varietal aroma and acidity play a larger role in white wines.

The rapid proliferation of heavily-blended proprietary wines displays the exuberance of producers. It can be useful for the growth of the appellation if all these blends are a way of discovering what varieties grow well in what locations. If the homogenization of varietal flavors and all-over-the-place packaging become too dominant, Paso Robles may get stuck in a mire of highly personalized wines that lack flavor identity.

A more pressing problem must be the downturn in the world economy. There has been a huge boom in planting and in wine production in Paso Robles. This has come at a time when there will likely be changes in consumption and spending patterns. The economic problems cannot help but stifle the growth of wine tourism. Consumers before 2OO8 had discretionary income to spend on ways of defining themselves by their wine purchases. Consumers will, post-2OO8, likely buy at lower price points where varietal wines dominate. This may mean a more limited menu of expensive Paso proprietary wine blends.

Pre-2OO8, investors poured money into start-up boutique wineries that reflected their dreams more than business calculations. A wine producer told me that many of these investors expected their wine production to sell out every year. As a result, they did not invest in storage facilities. Without them, the cost of storing wine that may never be sold is an escalating gamble. If bulk prices drop lower due to increasing supply and diminished demand, the cost of growing grapes could become greater than their value. Growers may be forced to leave their harvests on the vine. A winemaker told me that some clients of the Paso Robles Wine Service Custom Crush facility did not harvest their grapes in 2OO8 due to a combination of the factors mentioned above. The highly visible new infrastructure that supports tourism, such as luxury hotels, limo services, and winery tasting rooms depends on long-distance tourism, mostly from Los Angeles. If tourism diminishes, these businesses will suffer. A bright spot is what few of us would have expected months ago, low gasoline prices.

If I had written this article before 2OO8, I might have ended by asserting that greater notoriety and prosperity for Paso Robles was just around the corner. Paso Robles has a unique growing environment fueled by intense producer, journalist and consumer interest. But Paso Robles and the rest of the US wine industry are now wrestling with factors not foreseen in their business plans. Now we may have to wait a bit longer.

During my stay in Paso Robles in October, the Paso Robles Wine Country Alliance assembled for me and several other journalists and wine buyers a wide variety of wines to sample.  Not having the ability to sample 2OO wines in one sitting, I focused on Rhône-style white wines, Verdelho (a pet interest of mine), Southern Rhône-style red wines, and Petite Sirah (another pet).
The following were my favorite wines.

VERDELHO
Kenneth Volk Verdelho - El Pomar Junction Vineyard 2OO7 -  estimated retail $24

RHONE STYLE WHITE
Kenneth Volk Viognier “Live Oak Vineyard” 2OO7 - estimated retail $24
Tablas Creek Cotes de Tablas Blanc 2OO7 - viognier 38%, marsanne 25%, roussanne 2o%, grenache blanc 17% -  estimated retail $25

SOUTHERN RHONE-STYLE RED
Anglim Best Barrel Blend 2OO5 - mourvedre 45%, syrah 45%, grenache 1o%

Anglim Cerise French Camp Vineyard 2OO6 - mourvedre 39%, grenache 32%, syrah 25%, viognier 4% - estimated retail $24
Anglim Grenache 2OO6 - estimated retail $24
Tablas Creek Esprit du Beaucastel 2OO6 - mourvedre 45%, grenache 28%, syrah 22%, counoise 5% - estimated retail $32
Ortman Family Vineyards Cuvee Eddy - San Luis Obispo County 2OO7 - syrah 42%, grenache 3o%, mourvedre 19%, petite sirah 9%,
    viognier 2% - estimated retail $24

PETITE SIRAH
Vina Robles Jardine 2OO6 - estimated retail $26

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