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SPAIN REGIONS – Variety is the Spice of Spain

“standfirst”>Great efforts are being made to persuade supermarket buyers that there’s much more to Spanish wine than just Rioja and Tempranillo. Isn’t it time they woke up and smelt the Albariño? asks Patrick Schmitt

Press, producers, agents and Robert Parker have for some time been talking and writing about the enormous potential for Spanish wine, with Parker even describing the country as a future “star”. And yet, until Christmas time, Spain’s market share in the UK has been in decline, and if you glance at your average supermarket wine rack, it becomes quickly apparent that Spain’s range of regional produce is hardly well represented. Rioja is a word widely repeated, as is the variety Tempranillo, but where’s the Priorat, Toro, Rueda and Ribera that we read about? And what about the Verdejo, Cariñena and Albariño? The fact is Spain’s more specialist wines are not attracting the consumers’ attention and, therefore, are failing to make the necessary rate of sale to justify their place on the shelf. However, it’s not that the potential in Spain is untapped – the wines emerging from the country’s varied DOs are increasingly good quality and with marked regional expression – it’s just that most Spanish-wine consumers don’t know their Jumilla from their Rueda, but feel safe with Rioja.

Nevertheless, it is hoped, with Spain’s impressive sales turnaround since October/November last year – both volumes sold and, importantly, average prices paid, have increased – that supermarket buyers will consider experimenting with a more diverse range of Spanish wines. Certainly, it has been well documented (see the drinks business, February) that much of this sales growth has been fuelled by Rioja, and in particular, by promotions on reserva-level wines. But, whatever the cause, it has brought more consumers into the Spanish wine category, and not at the most basic level.

“The market is good,” says PLB’s Alex Cannetti. “Spain has declined for about a year and then it stopped by about November last year. So MAT we are up 6%-7% in volume and about 11%-15% in value, and when the market changes like that the buyers are more happy to buy interesting wines from different areas. Yes, the change is driven by Rioja, but it is letting in all the interesting new areas.”

Some are not quite as positive, however, seeing the cause (Rioja promotions) and effect (regional experimentation) as less clear cut. For instance, Jo Maclean, marketing manager at Codorníu, is not as confident that the improvement in Spanish wine sales will let in a flood of wines from areas that are currently poorly represented on the UK shelf. She suggests that many of the multiple retail buyers won’t be reviewing their Spanish range until May or even June and that they won’t look at one set of figures, those over Christmas, as a reason to extend their range, especially if the increase was fuelled by promotional activity.

Furthermore, Bill Rolfe, marketing director at United Wineries, questions the motivation of some buyers when it comes to listing wines from more diverse Spanish regions. He certainly believes Spain needs the help of the major retailers to expose consumers to the country’s diverse collection of wines, and notes that some are sympathetic to this cause, but more often than not, “They are listing wines from other areas because they are cheaper. They are doing it for profit, not because they feel passionate about Valdepeñas, for example.” Nevertheless, Rolfe does add that stocking wines from different regions is of interest to buyers, after all it elevates them from being merely brokers of wine, and in fact it’s really the consumer for whom Spain’s less well-known regions are of little interest. Hence, as Morrisons’ senior wine buyer Suzie Cornwell admits, “We don’t actively try to promote different DOs other than Rioja mainly due to the fact that there seems to be little consumer comprehension about the areas themselves. Indeed,” she adds, “unless the DO has a unique selling point (and many of them have not worked out what their USP is yet) there is little point confusing the customer.”

Nevertheless, Cannetti believes, “Once you see success in the category, you see people take on new wines. I know Co-op, for instance, have listed a Rueda, a couple of Somontano wines, and they are looking further afield. Waitrose have always looked further afield and have an exciting range of Toro and Ribera del Duero wines.” He adds that he’ll be curious to see what happens at Asda and Tesco, who up until now have not really focused on Spain. He thinks this will change, however, noting that in Tesco, Sainsbury’s and Co-op, “There’s a new generation of buyers who really want to shake things up, so I think you’ll see a lot of excitement.”

Grape or terrain?

One way of encouraging the consumer to experiment is, of course, by grape variety, rather than region. “When the consumer is buying New World wines they are definitely not buying regions, but brands and grape varieties,” argues Rolfe, implying that the consumer is looking for specific (and therefore known) varieties, names or packaging cues. Hence Cornwell’s suggestion that, “A much more interesting way to go is to charm the customer with the delights of various grape varieties intrinsic to Spain’s mix – Tempranillo, Garnacha and Monastrell.”

Also helping is the planting of international varietals in Spain which are sometimes blended with indigenous ones to steer consumers in new directions. Rueda’s native Verdejo, for example, is often blended with Sauvignon Blanc, while Jean Leon’s Terrasola range from Penedès includes blends such as Syrah/Cariñena, Muscat/Parellada and Sauvignon/Xarello. However, as Simon Fance of Masterpiece Wines says, “The adoption of international grape varieties catapults a wine straight into the arena of price competition, and Spain is not best placed for competition here”, citing the fact that Spain does not have a low-cost economy. It’s refreshing to hear, therefore, despite Cornwell’s comments on varietal-led labelling, that Morrisons is planning an overhaul of its Spanish range in the early summer and, according to Cornwell, “We would like to see more variation in the range in terms of DO. If we can find competitive, attractively-packaged, great-value wines from the likes of Ribera del Duero, Priorato, Somontano, Toro, I would love to include them in the range,” she says.

Another way to encourage consumers to experiment between regions, if not using a well-known grape variety, is with a brand they trust, hence United Wineries Haciendas de España project, where an “H” branded onto the bottle acts as a cue to the consumer, wherever the wine is from – even from a new DO like Arribes del Duero, near the Portuguese border, where United has recently built a winery called Hacienda Unamuno. Nevertheless, Cornwell reminds us that it’s difficult to develop a range of wines from different DOs with the same brand and design – like Morrisons’ “Southern Collection” from Languedoc Rousillon – in Spain, because of the strict wine laws. She cites her experience with Poema Garnacha and Sauvignon, the latter of which cannot include Rueda on the label because the brand is registered to the Garnacha which comes from Calatayud. For a producer’s frustration with just such a problem see this month’s brand builder, Felix Solis’ Viña Albali (page 34).

Areas of emphasis

But laws, consumer perception and buyer’s preference aside, there are still certain areas outside Rioja that are increasingly a focus of attention, even if it’s yet to be reflected fully on the UK shelf. These are regions which are drawing investment from established wine producers and interest from agents. For instance, Cannetti cites the Aragon region, where PLB is concentrating on Cariñena, Somontano, Campo de Borja and Calatayud, “mainly because Garnacha is so strong there. There are a lot of bush vines and the yields are very low – as low as 2,800 kilos per hectare (compared to Rioja which is around 7,000) – so you are getting a lot of concentration, colour and alcohol and a lot of flavour for your money.” And PLB is bringing out a new wine from Cariñena which will be a Grenache/Shiraz blend. “Shiraz is relatively recent to the area, but we thought we would try a classic Rhône blend.” The wine is yet to be named, but Cannetti hints that it may be called Profundo.

Guy Anderson Wines is also launching new wines from the Aragon region, notably El Burro from Campo de Borja. It’s from Bodegas Borsao and the company describes it as a “kickass Garnacha” at £7.99.

The other area Cannetti sees as being important is Valencia, as well as neighbouring Utiel-Requena. PLB works with the producer Cherubino in the area, and Cannetti suggests the Bobal-based wines are of good quality for the price. Similarly, Alan West’s Oakhouse Wine Company is representing Anecoop in the UK, which has “a new state-of-the-art winery in Valencia that has cost £10 million and will produce in excess of 18m bottles per annum.”

Other predominantly red wine producing areas that are looking strong at present include Toro which, although they are quite expensive, produces wines which are still considered good value for money.

Ribera del Duero is also on the up, with the likes of Faustino, for instance, building a new winery in the DO and one that’s designed by British architect Norman Foster. United Wineries also has a new facility in the region, while Torres is releasing Celeste from the DO, the company’s first Spanish wine produced outside Catalunya. Codorníu has its smartly packaged Legaris, while Felix Solis is behind the biggest winery in Ribera del Duero, called Prado Rey. This two-year old operation is supplying Ribera del Duero wines to the UK supermarkets for under £5, which is rare for this famously expensive region. Priorat too, like Ribera del Duero, is one of those areas attracting outside investment and press interest. But, as Carlos Latas, export manager for Rioja-producer Federico Paternina, who also produce the Ribera wine Marqués de Valparaíso, adds, “the volumes sold abroad from Ribera are still small, although they are growing in the UK, Germany and USA, and Rioja is the bread and butter of wine business in export.”

Nevertheless, Navarra in particular has for some time proved attractive for Riojan producers wanting to expand, and wines from the region tend to offer significantly better value than those from neighbouring Rioja, and consequently are of interest to UK buyers. For instance, Martin Watts from Cellar Trends, UK agents for Faustino, which produces the Fortius brand from the Valcarlos bodega in Navarra, suggests some from Rioja have invested in the region quite simply because it’s so close. But he can’t understand why more wines from the region aren’t listed in UK retail outlets. “The Rioja name is so powerful that when I was in the supermarket the other day there were seven or eight Riojas and no Navarra at all. Now that’s nonsense, especially when Navarra offers such incredibly good value.” However, he also notes that a current surplus of reserva Riojas are driving prices down, “which will impinge to some extent on the success of reds from other areas.”

The Castilla-La Mancha region, on the other hand, is key for many of Spain’s largest brands, including the likes of Viña Albali from Valdepeñas. And Allied Domecq has just refreshed the Albor brand, sourced from just south of Madrid. With modern packaging and a screw-cap closure, it is aimed at a youthful wine consumer, and is designed to reflect “the Manchegan terroir in a more contemporary way”.

East of La Mancha and south of Valencia, Jumilla is a name that repeatedly crops up. Iain Muggoch, buying manager at Bibendum, says the region is “the most exciting area” in Spain for the company, which is working with Casa de la Ermita. “It [Jumilla] is becoming one of these trendy areas,” says Muggoch, but he warns, “There is an awful lot of over-extraction, but if you can find balance, regionality – which is basically Monastrell – then the wines are phenomenal.” In fact, he adds, “that whole part of Spain, the south east, is a place to watch out for in the future”, mainly because it is an area suited to producing “well-priced wine with a more fruit-driven character than Rioja, and therefore more suited to modern tastes”.

White revolution

But that’s just the reds. As for the whites, most report an increased interest in Albariño. Muggoch suggests the grape variety, grown mainly in Rias Baixas, “is becoming one of these almost must-haves in the prestige on-trade market,” and he reports that Bibendum has joined forces with producer Castro Martin to develop a branded Albariño called A20. Meanwhile, Allied Domecq has just repackaged its Terra D’Ouro Albariño, while PLB is supplying Tesco with an Albariño, and Cannetti notes that the supermarkets are showing more interest in the grape “now prices are a bit softer”.

Other top quality Spanish whites are increasingly emerging from Rueda and Penedès, and as Muggoch asserts, “Penedès through to Rueda and up to Galicia are the three white wine areas to look out for, producing clean modern styles. Forget Rioja’s traditional love-it-or-loathe-it kind of white wine style”. Rioja producer Marqués de Riscal has certainly had enormous success with both its Verdejo and Sauvignon Blanc from Rueda, while Torres has almost single-handedly driven sales of whites from Penedès, which explains the 11% increase in sales from the region (see table). As Lorne Gray from John E Fells, Torres’ UK agents, points out, “Torres is a key contributor in the growth in sales of wines from both Penedès and Catalunya. Torres had a very successful 2004, with total UK sales increasing by 22%. This growth has been mainly driven by the continued success of Torres’ white wines, such as Viña Sol, up 26%, Viña Esmeralda, up 24% and to the continued growth of both Sangre de Toro, up 14% and Gran Sangre de Toro, up 73%.”

Furthermore, Paternina’s Latas adds that whites from Somontano, west of Penedes, are having some success abroad, but because they tend to use international grape varieties.

Overall, there seems to be what Muggoch terms a “revolution” in Spanish white wine. When it comes to the reds, it appears Syrah is an emerging variety, first really shown to be suitable in Marques de Griñon wines some six years ago. Nowadays, Cannetti says there is “great Syrah coming out of Jumilla and Aragon”, and he believes, “Tempranillo, Garnacha and Shiraz blends will be the future.” Certainly, United Wineries has planted Syrah in Rioja, Ribera del Duero and Arribes del Duero, as the climate in these areas is perfectly suited to ripening the variety which demands plenty of heat.

However, as Rolfe says of lesser-known Spanish regions, “They need to use every marketing tool in the book, because if you are not doing an in-store tasting, or you’re not on promotion, it is difficult to get your wine off the shelf.” Similarly, Cannetti comments, “If I were a buyer I would look at Spain as very much the future in Europe, because there’s more and more you can do and the wineries are becoming more and more sophisticated. It’s just the marketing that’s the final bit that needs to be got right.”

At the moment however, the areas the press are excited about, the likes of Toro or Priorat are still niche in export markets, while those regions the supermarket buyers tend to be interested in, Valdepeñas and La Mancha for instance, are attracting attention because, as Latas says, “the prices are lower than Rioja.” But don’t expect them to take over from Spain’s most famous region just yet, because, as Latas also comments, “In terms of price and quality, Rioja is still in a very good position.

© db April 2005

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