Rioja looks east with expansion plans

Rioja may have suffered a slight hit in its key markets as a result of the global recession, but plans are already afoot to seek out new sources of demand as economies recover.

Elena Adell, winemaker at Bodegas Juan Alcorta, told the drinks business that as well as developing its presence in the UK, Rioja is gearing up to launch a major push into China before turning its attentions to India.

Speaking at the Campo Viejo winery east of El Villar de Arnedo, Adell said: “We have already proved what we can do in the UK, which is by far the biggest export market for Rioja, and we’ve started to develop our distribution in the US.

“The next step for us is Asia and the region already has plans in place to expand over there.

“We have placed someone in Shanghai to start developing a distribution network and this is definitely the future for us. After China, the second step is India.”

While Rioja has enjoyed sustained success both in its domestic market and the UK, other countries have been slower to embrace its wines.

Despite efforts to establish a strong presence in the US, consumers there have not taken to Rioja in the way UK drinkers have.

“We are doing lots of research into the US market,” said Adell. “It’s a market we really want to have a big presence in. It’s a market that is continually growing and will be the biggest export market in world by 2012. We will obviously be looking to push on in the on-trade, but our biggest focus will be on the off-trade.”

In the UK, Rioja’s key export market, Domecq Bodegas area manager Karine Euvrard said consumers have not abandoned Rioja in reaction to the economic crisis, but they have been trading down.

“Before the crisis people in the UK were going for reserva and gran reserva wines, but since last year we have seen people buying a lot more crianza as it represents better value for money in their eyes,” she said.

Whatever the current state the UK market, Campo Viejo has bucked the downward trend by actually increasing its market share by 1% over the past year while the Rioja category as a whole lost sales.

“Our wines are clearly answering the needs of consumers in the UK,” said Euvrard. “When the recession is over we will still be there. Our strategy is simple: to keep products on the shelves and to keep innovating to move the market forward.”

Bodegas Juan Alcorta, which includes the Campo Viejo, Viña Alcorta and Marques de Villamagna, and Domecq Bodegas are all part of Pernod Ricard’s Spanish wine portfolio.

Alan Lodge, 03.02.2010