Spanish Branding

The rest of Europe may be stalling, but Spain’s wine sales are riding a wave of success – beyond Rioja. Patrick Schmitt looks at how, with a modern approach, Spain’s vast potential is finally being realised

If the recent Wines from Spain tasting at London’s Old Billingsgate market is a reliable indicator, Spain seems to have unshackled itself from the gold wire mesh of tradition. On almost every stand were modern labels attached to richly coloured reds –  and not just from Rioja. There were whites in noteworthy numbers, as well as rosés. And, most surprising of all, quite a collection of wines under screwcap.

It was physical evidence of why Spain is bucking today’s general trend of falling sales of European-sourced wine: by improving and altering both the look and style of its wines, Spain is keeping up with constantly changing consumer tastes in its key export markets – the US and UK.

Furthermore, those in Spain and outside are starting to really discover the potential inherent in Spain’s vast land mass. The proliferation of white wines alone at the Billingsgate-based trade fair was a loud signal that there’s more to Spain than Rioja. The variety of eye-catching, price-pointed brands are proof that it can compete with the mainstream, while the number of smartly packaged rosés, long held to be a Spanish strong point, are gaining the attention they deserve.

Looking at the UK market in isolation, the positive mood surrounding Spain is certainly justified. Sales of wine are growing at 7% by volume (ACNielsen MAT to end of December 2005) to reach almost 6.5 million cases. This puts Spain in 6th place behind Australia, France, the US, Italy and South Africa and, although Chile is not far behind Spain, shifting almost 6m cases, it is growing at 2%, against a total market growth of 4%. Spain is also up 7% in value to £284m.

By colour, Spain’s largest increase is in rosé, but from a small base. The pink stuff grew 53% in the 12 months to December 2005 from 205,000 cases to 313,000, while whites climbed 2% over the same period (from 1.63m to 1.66m cases), and reds 5% (4.13m to 4.32m cases). While Spain’s ratio of white wines to red is out of sync with the market average, it does mean there is plenty of room for growth when it comes to Spanish whites.

The average bottle price of Spanish wine has remained static at £3.65 (ACNielsen MAT to end of December 2005), still behind the gradually increasing total market average of £3.85. This is something Spain – particularly its leading brands – ought to address. Stowells Spanish, Berberana and Marqués de Léon, Spain’s three largest brands, are not helping the situation, with average prices of £3.29, £3.33 and £2 respectively. Then there’s Félix Solís and La Comida, Spain’s seventh and ninth-largest brands, which have average prices of £2.41 and £1.93.

On the other hand, Torres and Campo Viejo, the fourth and fifth-biggest Spanish brands by volume, have healthy average prices of £4.73 and £5.81, while Faustino, tenth in the charts, has an impressive average of £6.67. However, these wines are not able to offset the low prices of most of Spain’s leading brands.

Nevertheless, it should be remembered that these wines are drawing consumers into the Spanish sector and proving that Spain does entry-level wine extremely well. Few countries can offer such value for money for the UK consumer.

A question of brand
Overall, Spanish wine is “rather unbranded”, as Waitrose’s Spanish wine buyer Nick Room notes. He finds this somewhat “refreshing”, but admits the situation makes it hard for consumers wanting to explore Spain’s varied DOs because there are few brands big enough to act as guides. Stowells Spanish, although at almost 430,000 cases, is in decline, while famous labels such as Torres and Campo Viejo are below the 300,000-case mark (if showing impressive growth). But Spain’s largest brand, Berberana, is nearing the 500,000 case mark and, says Bill Rolfe, international marketing director at United Wineries, will be “launching a wine with ‘No.1’ on the label” to proclaim its position.

As for a brand that can take consumers on a “tour” of Spanish wine-producing regions, it’s worth noting that Viña Albali, with 100,000-case sales in the UK, is keen to put its name to a new winery being built in Rioja by brand owners the Félix Solís Group. The company would like Albali to act as an umbrella brand for wines from different Spanish regions, but DO regulations prevent this name, associated with the Valdepeñas-sourced wine, to be used in other areas. Regardless of the region, Spain’s strict wine laws, make it difficult to develop a range of wines that span different DOs.

Regarding growing brands from single DOs, there are several low-volume wines looking to build their presence in the UK, and some which fill the £4.99 Spanish gap identified by Room at Waitrose. He mentions Altozano as “a good benchmark”. This recently repackaged wine from Sherry producer González Byass has four varietal wines all at £4.99 – a Cabernet Sauvignon, Tempranillo, Verdejo and Chardonnay. Another small brand with high hopes and priced at £4.99 is Albor. Adrian Atkinson, wine development director at Pernod Ricard says the screwcapped brand was repackaged last year to “attract a younger consumer” and “where listed, is doing well”. But he laments, “There is a perception that, unless it’s £3.99, it won’t work. It’s a case of getting past that.”

Happy to hover nearer the average UK bottle price, however, is Castillo de Liria, selling for £3.72 in Asda. The recently repackaged brand is now under screwcap and sales are approaching the 100,000-case mark, having almost doubled during 2005. BrandPhoenix director Greg Wilkins says, “Spain needs two to three platform brands to establish the rest of the country. We hope this range can be one of them.”

Meanwhile, Buckingham Vintners is working hard on Santerra from Bodegas Murviedro, a 55,000-case brand in the UK. It hopes its red Bobal and the first Bobal bianco in the UK will increase interest in the range. Thierry’s also launched El Prado last year, which Nikki Fletcher aims to have “in the top-five selling Spanish brands within 12 months of its launch”. The wine is sourced from La Mancha and Valencia and consists of a red, white and rosé at £3.99, and a three-litre bag in box at £14.99.

Regional diversity
Like some of El Prado, Castillo de Liria and Santerra are from Valencia, a region showing marked growth. Exports from the DO increased by 10% to break the 30m-bottle mark in 2005, according to Wines from Spain. Helping this growth is the fully automated (it’s run by only two people) Gandía Winery, source of the Castillo de Liria brand, which produces 50m bottles and exports 4% of all Spanish wine.

Then there’s Anecoop, a fruit exporter that has been investing in bodegas in the region. Alan West, managing director of Oakhouse Wine Company, handles this co-op’s wines in the UK, and says E12m has been spent on La Viña de Font de la Figuera winery, which is producing 12m bottles annually. He says Anecoop has “particular strength in the production of Moscatel”, and brands by the group such as Orange Grove are gaining UK listings. This supports the belief of Alex Canneti, business development manager for Spain at PLB, who notes that, “Moscatel from Valencia is an interesting one to watch.”

Of course there’s investment in every corner of Spain, right down to Cadíz, where González Byass is producing Cabernet Sauvignon and Shiraz. Room at Waitrose highlights Bierzo: ”There are good wines from the Mencia grape. With all the tasting I’ve done, they have risen to the surface.” Canneti flags Somontano, where PLB is dealing with a new brand called Irius, the product of a E200m investment in this region. “The brand will be at £6.99 with planned £2-off promotions. We are hoping it will be another Chileno,” he says.

For many, Toro is an exciting region. Torres has bought land, Bodegas Riojanas founded the Torreduero there five years ago, and Marqués de Riscal has 185 hectares in the region, the grapes from which go into Riscal’s 1860 Tempranillo.

However, whatever the region, be it the above mentioned or Jumilla, Utiel-Requena, Navarra, Catalunya, Rías-Baixas and Rueda, “Vinos de la Tierra, rather than any single DO,” says González Byass’s Jeremy Rockett, “are going to be the future of Spanish wine, that is, unless the DOs get with it. We can talk about Priorat having cracking wine, but it is small commercially. Rioja, is going through growth but, in general for the whole world, it is the strict DOs which are in decline.”

Plans for la Mancha
For this reason, La Mancha, the home of the greatest volumes of country wines, is a vital source of liquid for some of Spain’s top brands. As Rolfe says of Berberana, “The way we reached number one was by breaking out of Rioja. Now most of the volume for the brand is from Castilla La Mancha and vinos de la tierra regions.” Roberto Alonso, export director for Faustino, producer of La Mancha’s Condesa de Leganza, agrees that many Rioja houses have invested in the region to fuel more mainstream brands. “The conditions are perfect to produce wines of quality and value for money. Also, logistically speaking, La Mancha is very practical – a wine can be in the UK market in two or three days. We expect the region to develop a lot.”

This explains why La Mancha, the world’s largest wine-producing area with almost 600,000ha under vine, has been attracting investment from the giant Spanish wine groups. The Osborne Solaz project is based in the region, the Martínez Bujanda group has built a winery in the area, while Freixenet’s Ash Tree, Pernod Ricard’s Albor and United’s Berberana are made from the DO’s fruit. Also, Bodegas Victorianas, producer of La Mancha’s Don Darias brand, is expanding its vineyard area.

Mix masters
Another advantage of La Mancha is that you can grow most varieties, as its vast area includes many microclimates and sub-regions. This is vital for those looking to produce a range of international grapes. Compounding consumers’ lack of recognition of Spanish DOs beyond Rioja, is their ignorance of indigenous varieties beyond Tempranillo. One way of overcoming this, however, is by mixing native grapes with international ones. La Mancha is not the only region where this is permitted. Canneti sees the appeal of Somontano and Navarra, too: “Not only can you mix and match with international varietals but the wines are naturally UK-friendly, being full-bodied and aromatic.”

But even in the strictest DOs there’s always one winery that will bend the rules to near breaking point. United Wineries shocked traditionalists by unveiling three single-varietal Riojas at the Wines From Spain trade fair. “We could have gone the SuperTuscan route and declared a vino de mesa (table wine) and put Syrah on the label,” says Rolfe, but instead the new Riojas, called Extreme, have “collarettes with cryptic messages on them”. In reality, these are just the truncated names of the varietals; Syrah is Syr, Merlot is Mer. But, as Charles Elms, director of
Free Run Wines (agent for Félix Solís), warns, “If everyone jumps on the bandwagon and trots out international varietals, then Spain could lose its point
of difference.”

White hot
Certainly when it comes to the whites, Spain’s treatment of foreign grapes doesn’t seem to be making inroads. Contrary to the sentiments above, it is the native varieties that are doing best. Room makes the point that in terms of Spanish Sauvignon Blanc or Chardonnay, “like Chile, there’s not much varietal difference”. With indigenous grapes, he argues, “The wines come to the fore – for example Verdejo from Rueda and Albariño.”

Investment has been pouring into Rueda. Marqués de Riscal has its white wine base in Castilla y Léon and Félix Solís bought a new winery in the region in March 2005. Rueda Verdejo in particular “has seen phenomenal growth – sales for 2005 were up 116% on 2004”, says Juliet Maurice, trade marketing manager at Laurent-Perrier, Riscal’s UK agent. Similarly, Félix Solís Ramos, the international general manager at Félix Solís, reports “booming” sales from Rueda and, like Riscal, produces both a Sauvignon Blanc and Verdejo from the region. 

Albariños, mainly from Rías Baixas, are starting to proliferate on UK shelves, thanks to a concerted marketing effort, investment in the region, and slightly lowering prices, or at least more discounting. “It’s about time there are successful white wines from Spain,” says Canneti. “Supermarkets now have good Albariños with promotional support. They may be £6.99 or £7.99, but we are seeing more promotions.”

Catalunya-based Torres and Jean Léon are renowned for their whites, and Room cites the latter as performing particularly well when it comes to the mid-premium price bracket. Others are also interested in this region – and for good reason, says Félix Solís Ramos. “Strategically speaking, it is very interesting – a winery can cover reds, whites, Cavas and Priorat,” he says.

González Byass has also built a winery in the region to make both cava and still wines, while cava kings Codorníu and Freixenet each produce still wines and have reds from Priorat, as does Torres. Meanwhile, Codorníu’s Raimat wines from Catalunya’s Costers del Segre DO have just been smartly repackaged.

Rioja’s rule
Finally, no mention of Spain’s up-and-coming wine regions is complete without considering Ribera del Duero. “It’s a key area now,” says Canneti. “There is more competition, more volume and the quality has risen four-fold.”

Alonso of Faustino believes any serious Spanish importer “must have a Ribera del Duero”, and the group has just launched a brand called Portia, with a bodega being designed by Norman Foster. Pagos del Rey is the largest winery in the region, built three years ago by Félix Solís, and its £5.99 entry-level wines, Altos de Tamaron, are doing well in the UK. United has its Durius project which includes wineries along the length of the Duero River. Paternina has Marqués de Valparaíso, Codorníu has Legaris, and Torres its new Celeste brand from the region. La Rioja Alta SA (RASA) produces Aster from Ribera del Duero, because it wanted a more modern style of wine but still with a similar pedigree to its Riojas. As the company points out, both regions have the same ageing rules.

Nevertheless, in spite of all the literature on Spain’s emerging regions and brands, much of the growth in key export markets comes from Rioja. This famous region is the very reason buyers and consumers look favourably on Spain. “Rioja continues to be Spain’s most well-known DO,” says Christine Forner, CEO and export director at Marqués de Cáceres. “It has acted as a driving force for areas such as Navarra and Ribera del Duero and continues to do so for other up-and-coming Spanish wine-producing regions.”

Rioja combines tradition and modernity and has shown great capacity for modernisation, with many companies investing in new bodegas as well as expanding existing ones. “Rioja still has great potential for development and offers diversity in wine styles and prices ranging from basic sin crianzas to top-quality vinos de alta expresión,” explains Forner.

Carlos Latas, export director for Paternina, concurs: “Rioja is still the flagship for Spain and can cater for all kinds of consumers, with both its classic and modern styles.” Paternina has just launched a 100% Tempranillo aged in new oak called Clisos.

Spain is adapting to modern tastes and showing the profits. For that it must thank Rioja in the mid- to high-end, and La Mancha for its more mainstream appeal. Other regions are emerging, but only on the back of the remarkable inroads made by these pioneering regions.  db  April 2006