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Friday 31 October 2014

Félix Solís Ramos: Reigning in Spain

15th December, 2011 by Patrick Schmitt

With enormous, state-of-the-art facilities, Félix Solís Avantis marries Old World character with New World efficiency. Patrick Schmitt talks to Félix Solís Ramos.

Rising from the plains of La Mancha is a winery containing more American oak than anywhere else in the world, that is, other than Lynchburg, Tennessee, the home of Jack Daniel’s.

The cellar, deep within the DO Valdepeñas, holds an impressive 100,000 barrels, which are used to bring a vanilla scent to over 220 million litres of wine including the Viña Albali label, one of the country’s biggest brands, and well known in the UK for its traditional look and good-value liquid.

Running the operation is Félix Solís Avantis, a producer that specialises in quality winemaking on an enormous scale, and acts as a holding company for two organisations, Félix Solís, with major facilities in both Valdepeñas and La Mancha, and Pagos del Rey, which manages four wineries in northern Spain.

In all, it’s a business which proves that efficiencies from scale can be achieved within an Old World regulatory framework – for example, the DO Valdepeñas Viña Albali is not flavoured with oak chips, but takes its taste from barrels, and yet you can still find its 10-year-old Gran Reserva on the supermarket shelf for £10, off-promotion.

“The main thing is the volume of the operation and the technology, because having economies of scale and modern machinery gives us the possibility to make good wines at a low price,” explains export and marketing director for the company, Félix Solís Ramos, who is grandson of the founder, Félix Solís Fernandez.

Certainly the company seems to constantly invest in enlarging and updating its facilities, and Ramos admits that the Valdepeñas winery, the group’s largest – and Europe’s too – now has 15 bottling lines which can fill 140,000 units each hour, as well as a newly enlarged warehouse holding 43,000 pallets of wine, up from 25,000.

The group has also just installed equipment for sparkling wine production and Mr Solís says Félix Solís is creating new ranges of frizzante rosé.

Thinking bigger

Nevertheless, he points out that “the big thing” is the company’s investment in La Mancha. Over two years ago the group finished a new winery in the region, which can process 80m litres of wine, while from this August a new bottling line at the site has removed the need to truck wine to the Valdepeñas facility for packaging.

A Félix Solís Avantis philosophy of large-scale production has also extended into northern Spain where the company operates as Pagos del Rey, beginning with a winery in Ribera de Duero, opened in 2002.

Despite this region’s reputation for expensive labels from small estates, Félix Solís Avantis opened an eight million-litre capacity winery and launched a supermarket brand called Altos de Tamaron, complemented by Condado de Oriza for the restaurant sector.

The former off-trade brand’s joven and crianza quality levels are now Spain’s two best-selling reds from Ribera de Duero.

Other northern Spanish wine estates quickly followed to create a Pagos del Rey portfolio, including a three-million-litre capacity winery in Rueda, acquired in 2004, and then, in 2006, an operation in Rioja, which was built from nothing to produce 10m bottles annually, including a brand called El Círculo.

“We’re in Fuenmajor in Rioja Alta, near Bodegas Lan and Berberana,” Mr Solís records. “We decided to move into the region because Rioja represents 47% of all DO wines in Spain and so you need a Rioja in the range.”

But it’s Toro that Mr Solís is currently excited about. The company bought the region’s largest cooperative, Viña Bajoz, in 2008 and has “now refurbished the whole winery”.

The new facility, which was finished in July, is, as Mr Solís says, “the largest and most modern in all of Castilla y Leon”, and has a 20m-litre capacity. Speaking of the decision to invest in this less-well-known DO, Mr Solís says: “I think it is one of the most interesting areas in Spain at the moment,” citing the good value grapes from extremely old vines. In fact, the soils are so sandy phylloxera never penetrated the region, and the indigenous grape, Tinta de Toro, from the Tempranillo family, is grown ungrafted.

“The raw material is very good and it is not given the recognition it deserves,” comments Mr Solís, adding: “The price of grapes is lower than Ribeira del Duero so you can make very good quality wines at a very good price, and Toro is popular in key markets such as the US – it is Robert Parker’s favourite area in Spain.”

Nevertheless, the Pagos de Rey range has not come to a natural conclusion, and Mr Solís says he’s considering Penedes. “We need a cava to complete the circle,” he says, and he is looking for an existing operation, “but it needs to be over 15m litres.” On the other hand, “we wouldn’t discount doing our own”, he adds, referring to the establishment of an entirely new winery.

Although Mr Solís acknowledges the popularity of Spanish whites from Galicia, in keeping with the Félix Solís Avantis focus on large-scale operations, he suggest that the region is too fragmented to fit with the company’s approach. “We are looking at Galicia but the plots and wineries are too small and we would need a different philosophy to approach that region, and we would have to sell to a more high-end client.”

Of course an efficient and high-volume producer like Félix Solís Avantis is perfectly equipped to work with the world’s biggest retailers, and Mr Solís says that selling to the supermarkets is proving beneficial, even during Europe’s extended recession.

Just under half of all the company’s production is sold in Spain, and in the country, a shift to consuming wine at home rather than in bars and restaurants is benefiting Félix Solís Avantis.

“The Spanish wine market is stagnant and unlike other countries, 48% of wine sales in Spain are in the on-trade, which is not normal; in the UK, for example, it’s 15%. But Spain is changing towards a more UK-style model so those with a big presence in retail are earning more share, and we are big in retail.”

The business was set up to serve both sectors however, and Mr Solís points out: “In every region we work on having two mainstream brands, one for retail and the other for the more specialist and on-trade market; for example, in Ribera de Duero, Altos de Tamaron for the off-trade and Condado de Oriza for the on-trade, or in Valdepeñas, Viña Albali for retail and Arium for restaurants.”

Far-reaching Far East

Félix Solís Avantis is also set to benefit from the expansion in demand in the Far East. Back in 1998 it established a joint venture in Shanghai dedicated to bottling wine for the Chinese market, establishing a facility that can store up to 1.2m litres of wine.

“Exports have become more important for us, and we are now exporting 52-55% of our production, but in the future I think that will be 70%.” Currently, almost 70% of the wines Félix Solís Avantis exports sell within Western Europe, and 30% in the UK alone. But, Mr Solís stresses, “a big focus for us is the US and Asia, and sales in China are increasing dramatically”.

Speaking further of the Shanghai operation, Mr Solís explains: “We have had a bottling plant in Shanghai since 1998, and back then only two companies were investing in China – but now we are the only one with a bulk and bottle facility in China.”

Continuing, Mr Solís stresses the benefits of this investment. “It gives an advantage in terms of cost, service and level of trust among our clients: we can do a lot of things, like hold stock for them, giving them much more flexibility, including with payment terms.”

Three years ago the Shanghai Félix Solís Winery was added to with another facility called Pagos del Rey China, which is devoted to wines bottled at origin.

“It has been split because the tax on bulk wines is different,” Mr Solís explains. Notably Spain has the largest share of the bulk wine market in China, having surpassed Chile after supply shortages due to the earthquake in February last year.

In terms of the bottled wine market, Mr Solís adds that Spain is the fifth biggest in China, “so we need to do a lot of work”. Ahead of Spain is France, the US, Italy, Australia and Chile.

Well presented

However, Félix Solís Avantis has not just been pioneering in market development. Mr Solís also draws attention to an innovative side to the company when it comes to packaging and labelling.

The business is a major supplier of tetra pak wine as well as prisma pak, and supplies Tesco, Morrisons and Asda with Spanish wine in the latter format. “The big retailers are substituting glass for other formats at the entry level,” records Mr Solís, adding: “There is a big market for this and the consumer has accepted it.”

Mr Solís also points out that Félix Solís Avantis has been the first in Spain to put nutritional information on its packaging. He says that a glass of wine has three times less cholesterol than fizzy drinks. “Wine is more healthy than soft drinks, the only problem is the alcohol.” For example, the company’s Penasol brand lists that each 90ml glass contains 67kcal and zero grams of fat. The former is just 3.3% of an adult’s daily guideline.

Small formats are another facet to the Félix Solís Avantis operation. “We do the Tesco Value 25cl mini tetra pak,” he says. “Small formats are getting more important, not just in the UK, but worldwide… more people are single,” he says, providing a possible reason for their rising popularity.

Currently Félix Solís Avantis has six major wineries across Spain and as many as nine subsidiaries in its key export markets, with one in France, the Czech Republic, the US, Germany, Japan, Mexico, the UK with Free Run Wines, and the two mentioned above in China.

But would it consider a vineyard and cellar outside Spain? “I do have this in my mind, and if I did, I’d like to start something in Chile, because I feel there is a similar philosophy.

“Unlike Argentina, Chile is low risk, it is serious supply in a serious country.” But for now, nowhere can rival the quality-for-price ratio achievable in Spain, particularly central Spain. With plenty of sun, old vines, low costs and access to water, not forgetting the massive, modern and hugely efficient Félix Solís wineries, it’s hard for the rest of the world, even the New World, to compete.

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