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Aeration can:
Soften tannins 
Release aromas 
Reduce sulfites
Allow flavors to blend harmoniously, balancing the flavor of the wine

Methods of aeration include decanting, swirling the wine in a glass, using an aerator, or by using a less effective method of simply opening the bottle and letting it "breathe". Aeration is an especially effective technique to enhance the flavor, aroma, and overall character of wine. This practice allows volatile compounds in wine to dissipate. 

Not all wines need aeration. Young, tannic red wines benefit. However, delicate reds such as pinot noir, young, simple whites, and older wines typically do not need aeration.