(TDB) - The US market for Pinot Noir “sucks” according to Richard Ward, co-founder of longstanding Carneros Pinot producer, Saintsbury.

Despite the popularity of the grape in the US, which has enjoyed significant sales increases since the release of hit movie Sideways in October 2004*, Richard Ward admitted that selling Pinot Noir in North America had become increasingly difficult, even for an established brand like Saintsbury, which was founded in 1981.

Blaming supplier saturation and wholesaler consolidation for the challenging conditions for Pinot Noir producers, he told the drinks business in London last week that it was becoming harder and harder to find a route to the market.

“10-15 years ago there were probably 10% as many Pinot Noirs as there are being made today in California,” he began.

Joking, he continued, “I thought I had a deal with Cabernet producers in Napa: I didn’t make Cabernet and they didn’t make Pinot Noir – but they are all making Pinot now.”

According to Ward, exacerbating this proliferation of Pinot producers is a contraction in the number of wholesalers, who wineries must sell to in the US because of the three-tier system of alcohol distribution set up after the repeal of Prohibition in 1933.

“There were 10 times as many distributors as wineries back then [10-15 years ago] and now there are 10 times as many wineries as distributors, so it is tremendously complicated in terms of the competition,” he explained.

He then admitted, “The sheer number of American Pinot Noir brands means that the market is totally saturated so it is hard unless you are important to the distributors’ bottom line – and we are not really.

“It’s why you see the bigger producers buying up smaller brands – it gives them a toehold in the super-premium end of market and the wines sell because of the tremendous clout these companies have with distributors.”

Looking back mournfully, he added, “The small family-owned distributors have always done good business for us but they practically don’t exist any more.”

Nevertheless, Saintsbury, along with other producers, are increasingly finding a solution in selling direct to consumers, where possible.

“So many wineries won’t sell through the 3-tier system and, although we still do, we are developing our direct to consumer business.”

This aspect to the brand’s business may not account for a large number of cases, but the margins are high, he said.

“Our direct to consumer business is only 15% of the volume, but 50% of our profits,” he recorded.