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Tuesday 22 July 2014

Ysios steps up luxury ambitions

16th January, 2014 by Gabriel Savage

Pernod Ricard’s Spanish wine arm, Domecq Bodegas, is working to cultivate a luxury position for its Rioja brand Ysios, with Chinese consumers a major target.

Calatrava's striking Ysios winery

Calatrava’s striking Ysios winery

Speaking to the drinks business, Christian Barré, president director general of Domecq Bodegas said: “For us Ysios is a luxury wine and has to be positioned as such.” However, he admitted: “In the past it was in between; the quality was good, the winery was fantastic but we felt it was missing a totally consistent and coherent message.

Outlining efforts to reposition Ysios, he acknowledged that at present “it is not very well known except for a small segment of consumers in Spain.” However Barré stressed his ambition to make this wine “the jewel in the crown” of a wine portfolio which includes fellow Rioja brand Campo Viejo.

Based in Rioja Alavesa and having produced its first vintage in 2001, Ysios is currently perhaps best known for its striking but problematic winery design by architect Santiago Calatrava.

From around 40 hectares of vineyard Ysios currently produces two core wines, both 100% Tempranillo: a reserva and the Edición Limitada, which is only produced in the best years. On top of this the winery has developed Club Ysios, which allows members to buy a minimum of a barrel and enjoy a number of perks.

It is this club offering which Barré is keen to develop as a key part of Ysios’ luxury repositioning, particularly when it comes to his next “main focus” of the Chinese market, where sales will be channeled entirely through Club Ysios.

“There’s a list of benefits apart from the wine,” outlined Barré. “You’re invited to the winery with a business class fare, you work with [winemaker] Luis to ‘finish’ the wine, you can use the facilities or organise a private party there.”

Setting this offering within a wider context, Barré said: “If you speak about luxury wines it must not only be a wish but in every detail of what you do.

“Three or four years ago we started to rethink the Ysios concept, the details of the vineyard, the barrels, club Ysios. We have made dramatic selections in the vineyard and an additional selection for the Edición Limitada. You need to take care of every single detail.”

Making its first move in Spain, the brand repositioned itself from the 2007 vintage, which involved a price increase from around €18, a level described by Barré as “clearly too cheap”, to €25.

With the focus now shifting abroad to China, where it will sell for the equivalent of around €120 per bottle, Barré suggested that the US has the potential to become another strong market for Ysios.

While acknowledging: “Spanish wine is a small category in the US but it’s growing, mainly thanks to Rioja and a bit also to Ribera del Duero,” he noted: “the segment where Ysios is positioned is almost irrelevant to the Spanish category.”

Setting out a “target price” of $50 per bottle in this market, Barré identified the potential Ysios consumer in the US as “the ones drinking Pingus or Vega Sicilia today.”

Despite its position as a major hub for the fine wine market, Barré suggested that the UK was not likely to form a significant focus for Ysios. “In the UK we just sell a few cases and will probably remain small for select consumers who enjoy having a good selection of the best wines from Spain,” he remarked.

Explaining this position, Barré continued: “In the UK the price level is extremely compressed; most wine is sold below £10. In the US it’s much wider; they’re used to paying more for wine. There is potential in the UK but for me it’s not as clear as it is in the US. It’s a question of priorities and in the UK there’s so much focus on Campo Viejo.”

A focus on Rioja will appear in the drinks business February issue, out next month.

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