In focus: Spain bounces back from meagre 2017 harvest
Between drought, hail and heatwaves, 2017 saw Mother Nature deal a challenging blow to winemakers throughout Europe, with a cocktail of erratic weather events leading to one of the smallest vintages in living memory. Spain was no exception.
Volumes dropped by around 20% compared with the previous year, bringing with it pricing and supply pressures most intensely felt in the bulk wine market. Then, production stood at 35.6 million hectolitres, compared with 44m in 2016 – a 19.6% drop – according to Spain’s Ministry of Agriculture and Fisheries, Food and Environment. Spain’s five-year average is around 43m hl.
Now, a year on and with the 2018 harvest behind us, the outlook for Spain, and indeed Europe, is much rosier. While Spain’s 2018 harvest is still being assessed, volumes are expected to bounce back, returning to levels seen in 2016, with early estimates placing production at 42m hl. The final figure could well be higher, says the Spanish Wine Embassy, marking a return to normality.
“There are high hopes for a vintage offering fine quality and good volumes as the last grapes are picked in the Spanish wine regions this autumn,” the embassy said, ahead of a full report on the harvest, due in January. “After the extreme conditions of 2017, this year [2018] the weather has been largely favourable, with more generous rainfall and slightly cooler conditions. Many producers are describing fresher wines and an ‘Atlantic’ style for the new vintage.
In areas badly affected by frost in 2017, the vines have often recovered well and surprised growers, especially in the DOs of Castilla y León. Favourable conditions in early autumn have allowed growers to pick gradually, and harvest dates have generally reverted to more traditional dates.”
“ABNORMALLY PRODUCTIVE”
In Rioja, the 2018 harvest was described as “abnormally productive” by Joan Esteve, viticulture technical director at Codorníu-Raventós, even more so as vineyards that suffered frost damage the previous year. “Vines had extra reserves after one year without crop and developed a lot of fruit. Vineyards that were not thinned enough had difficulty reaching full ripeness because of rains during that time. Canopy management has been essential to balance fruit yield and quality.”
In Penedès, some growers suffered with downy mildew, “reducing yields significantly”, adds Esteve, especially those operating organically. However, a dry summer resulted in clean and ripe grapes in much of the region. “We expect good wines from Penedès: clean, fruity and higher acidities than usual, especially in the past two years.” Conditions in Rueda meanwhile, were described as “perfect” by Jesús Díez de Íscar, technical director of DO Rueda. “We harvested the grapes according to the maturation levels in each plot, seeking the perfect balance between potential alcohol and acidity. This year [2018] the grapes were in excellent condition.”
With volumes set to recover in Spain’s key wine regions, inventories will be replenished, says Rafael del Rey, director general of the Observatorio Español del Mercado del Vino, which will “soften the current increase in average prices, and will allow for more exports and a recovery of the domestic market in 2018-19”, particularly at the entry-level/bulk end of the market. “Premium wines are less affected by changes to harvests from one year to another, particularly in those areas where ageing – and therefore, keeping wines from a series of crops in the winery – is normal. For younger wines, a larger crop will probably mean larger sales in international markets. However, better harvests in France and Italy will probably reduce the demand for Spanish wines from these markets, giving Spanish exporters an incentive to sell directly to final consumers in areas like Asia, Eastern Europe and North America. Improving direct sales to final-consuming countries, through better distribution of our brands, is a key element of the Spanish strategy.”
EXPORT STATISTICS
Despite a challenging 2017 harvest, export figures from the OeMv for January to July 2018 point to an excellent performance for Spain. Overall, exports by value hit €1.9 billion (£1.69bn), a 7.9% increase on the same period in 2017, while volumes declined by 8.5% to 1.5m hl.
“The wine year from August 2017 to July 2018 has been influenced by the small harvest in autumn 2017, which at the same time affected France, Italy and Spain,” says del Ray. “The three major world wine producers all had one of the smallest crops in years. This meant less wine to be sold and at a higher price. In the case of Spain, the low production and higher prices seem to have provoked a relatively small domestic consumption, which was recovering from previous years of economic crisis.”
By value, there was particularly strong export growth to Italy (up by 122%), France (25%), Norway (25%) and Ireland (19%). However, declines were recorded in Russia (-45%) and China (-15%) in particular. The UK saw a decline of 1% in the value of Spanish wine imports. By volume, the largest declines in exports were seen in Russia (-69%), China (-49%) and Portugal (-20%). Italy bucked the trend, increasing volumes by 87%. Scandanavia also performed strongly, with Norway up 26% and Finaland up 12%. “In a peculiar year such as this one, most markets have shown the same pattern: lower purchase at higher average prices, forced them to pay more for the wine they buy,” says del Ray. “Exceptions to this rule have been Italy – which despite being more expensive, bought more Spanish wine than the previous year – Denmark, Sweden, Norway and Finland, which have all increased purchase of Spanish wines in the year up to August.
“In euros, however, most markets have developed very well for Spanish wines in 2018, showing outstanding growth in France, Italy, Germany, Portugal, Mexico, Ireland and the already-mentioned Scandinavian countries.”
SPAIN IN THE UK ON-TRADE
In the UK on-trade, Spain is now the second-highest-value wine origin per 175ml (£4.76) after New Zealand (£4.90), according to Accolade’s 2018 Wine Report, holding a 6.1% share of the on-trade market. A bubbling up of hot Spanish restaurants in the capital has helped support this success, with stalwarts of the Spanish dining scene, including José Pizarro, Borough Market’s always-rammed Brindisa, Spanish fine dining haunt Cambio de Tercio on Brompton Road and Exmouth Market’s Moro, still going strong. Spanish restaurant group Camino now has five venues in London, including the Sherry lover’s haven Bar Pepito. Barrafina was among the first of London’s new wave Spanish eateries when it opened in Fitzrovia in 2003; this year [2018] it opened its biggest branch to date at new King’s Cross hotspot Coal Drops Yard. Elsewhere, chef Nieves Barragán, who helped propel Barrafina to a Michelin star, opened her debut solo venture, Sabor, in Mayfair.
OFF-TRADE
While Spanish wine is gaining ground in the UK on-trade, it’s a different story in the off-trade, where Spanish wine commands an average of £5.28 a bottle, down by -0.39% year-on-year. Rioja bucks this trends, sitting at £6.89 a bottle, up by 2.2% year-on-year. However, this is set against a backdrop of declining prices for the Spanish market as a whole.
“Consumers still look to certain styles of wine from Spain that offer safe and reliable taste profiles and quality: Rioja, aged reds from central Spain and southwards, and flavoursome Albariño,” says Beth Willard, Spanish buyer at wine merchant Laithwaite’s. “This consistency of style, and value for money, is a huge advantage for Spain as customers regularly repeat buy from these varieties and regions. However, it also proves very challenging to encourage consumers to try other styles of wine, and more premium Spanish wines, apart from in a strong hand-sell.”
Aside from the challenge of convincing consumers, particularly in the off-trade, to trade up, consumers are becoming more adventurous in their wine choices, and seeking out lesser-known regions and varieties. Spanish whites in particular are dynamically making their mark in the on- and off-trades.
“Gradually, people seem to be branching out to explore other styles beyond the obvious – we are now selling more of grape v
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arieties such as Godello and Verdejo, Graciano and Mencía,” says Richard Bigg, owner of Camino. “Whites in particular have seen such fantastic improvements in quality in recent years that we happily list a number of wines different in style to the usual Albariños and unoaked white Riojas, and feature these varieties on a new section of our wine list called ‘Wines off the Beaten Track’ or Vinos Fuera del Camino Trillado. Examples include a Xarel.lo from Catalunya, a Merseguera from Valencia and a blend of Palomino and Pedro Ximénez from Cadiz.”
In 2018, white Rioja continued its upward trend for the fourth consecutive year in the UK, with value sales up by 34.9% and volume sales up by 32% in the off-trade, according to Nielsen. White Rioja now makes up 7.9% of Rioja by value (up from 5.9% in June 2017) and 8.7% of Rioja by volume (up from 6.4%
in June 2017).
Garnacha Blanca is also gaining traction at Laithwaite’s, says Willard, citing the popularity of its Flor de San Martín Garnacha Blanca 2017 from DO Navarra. “It offers something a bit different; a mineral but rich white at a very competitive price,” she says. “It’s proving a popular and better-priced option in comparison to wines like Picpoul, which have experienced great success in the UK market over the past few years.”
Christina Forner, president of Marqués de Cáceres, cites old vine Garnacha Blanca, Godello, Verdejo and Sauvignon Blanc from Rueda as key to Spain’s emerging white wines, while also noting growing interest in red wines made from Monastrell, Mencía and Bobal. “At Marqués de Cáceres, we anticipated these tendencies, and launched our Albariño, Deusa Nai, and our white wines from Rueda – Verdejo and Sauvignon Blanc – produced at our own vineyards between the villages of Serrada and La Seca.”
In Rueda, where Verdejo is the flagship grape, the region’s DO is also gearing up for a big year, having refreshed its logo and quality seal. “Our new, fresh logo and back labels bring the Rueda brand to the fore, appealing to young people yet maintaining our current consumers”, explains Carmen San Martin, president of DO Rueda. “The challenge we have set ourselves for the next few months is to reach out to consumers with our new back labels. We want consumers to be clear about the radical change we have made. Consumers will no longer see Verdejo, Sauvignon Blanc, sparkling or Dorado on our labels, because instead we want to emphasise the DO Rueda brand.”
RIOJA: JEWEL IN THE CROWN
Spanish whites might be on the rise, but traditional Rioja remains the jewel in Spain’s crown. According to Wines from Rioja, in 2018 Rioja accounted for 36.3% of Spanish volume sales in the UK, and remains Spain’s flagship wine region by value, accounting for almost half of Spanish value, at 47.3%, with 90% of volume sales red. “Rioja remains phenomenally popular, and the quality continues to improve,” says Bigg. “This, along with increasing innovation and experimentation, whether with single vineyards or perfecting more traditional blends, keeps the region at the forefront in sales terms, and keeps it exciting.”
in 2018, the region rebranded, introducing new rules that would permit a new category of single vineyard wines, peeling back the layers of centuries of blending tradition, while relaxing labelling laws of specific municipalities. It’s hoped the move will allow producers greater flexibility to diversify their ranges beyond the traditional.
For example, in 2018 Viña Pomal launched a Rioja that “breaks all the rules”, according to Alejandro López, winemaker for the brand at parent company Bodegas Bilbaínas. Called Compromiso, the new label is priced at £35, but shuns the classic quality designations of reserva or gran reserva, and doesn’t express a particular site. “With Compromiso we are breaking all the rules; it is not a wine from a single vineyard, it is not a reserva or a gran reserva, and it is not a single-varietal wine either,” explained López.
“It is just a ‘generic’ young wine,” he added, referring to Rioja’s official classification, which would see the new product billed as ‘generico’, the entry-level classification for Rioja previously known as ‘joven’. Launching with the 2015 vintage, Compromiso is a blend of five varieties – Tempranillo, Garnacha, Maturana Tinta, Graciano and Mazuelo – each of which is vinified separately, then aged for 14 months, including four months in 225-litre French and American oak barrels. Notably, the US oak barrels are covered in tattoos by six of the world’s most-celebrated tattoo artists, making Compromiso the first wine to be aged in tattooed barriques, says Pomal.
While old traditional regions such as Rioja, Galicia, Penedès are launching new products based on old traditions, new regions are emerging as a generation of young winemakers work to renovate old vines and recover traditional varieties, while implementing new winemaking practices.
“Young producers are creating amazing Garnachas in different parts of the country, like Aragon, Navarra and Castilla y León,” says del Ray. “There is a fantastic revolution in the eastern part of Spain, based on new Bobal and Monastrell (Mourvèdre). There are new producers exploring higher altitudes to make very fresh wines. There is also a white revolution, led by Rueda, but followed by Albariños in Rías Baixas and Godellos in Galicia, as well as some new white wines in Catalunya, innovative unfortified whites in Jerez and great wines in Somontano. And new producers in Extremadura, the Canary Islands and Mallorca are making small quantities of fantastic wines.”
SHERRY: YET TO CATCH FIRE
Beyond still wines, Sherry remains a burgeoning opportunity, particularly in the on-trade. Beloved by the trade, the fortified wine never quite caught fire in the UK, despite perennial proclamations of its potential. “Sherry production may have fallen, but the quality has never been better, and it remains extraordinary value for such a high-quality wine category,” notes Bigg. Meanwhile, the ongoing popularity of Prosecco presents an opportunity for Spain with its own fizz, Cava.
Despite being traditional method, and therefore more complex and expensive to produce, Cava has lost significant ground to tank-method Prosecco, and has failed to capitalise on the boom for bubbles, says Bigg. “With initiatives such as the high-end Cava de Paraje Calificado classification, we should see a gradual pick-up in sales in this category because of the emphasis on the very best quality, and this message filtering down,” he says. “This ought to help the category as a whole, which I feel is much deserved because there are so many well-made Cavas that are dry, balanced and amazing value. It’s hard to find a sparkling wine to match at the entry-level price point. And there are some very good ones available for not a lot more. Maybe now that Prosecco sales seem to have peaked, people are looking for something less sweet and a more sophisticated, which they can find with Cava for no more outlay.”
A healthy 2018 harvest will put Spain in a strong position heading into 2019, with the past 12 months largely a rebalancing act following a challenging 2017. Spain remains a strong and respected brand around the world, including in the UK, but, as Forner sums up, “It is yet to affirm and consolidate the image of its prestige wines that deserve a privileged positioning and reputation on an international scale. Spain has the advantage of a recognised potential for quality, centuries of history, vine stocks of 100 years old and more, soils and climates that favour the production of superb wines.” She adds: “The way forward is to consume better quality in moderation and maintain competitiveness, rather than low-cost wines that discredit the cultural richness of wine.”
Change is happening. Cava’s new Paraje Calificado single vineyard classification, among the strictest sparkling wine classifications in the world, is a flag in the sand. Rioja’s efforts to reassess its rules – the first in decades – fly in the face of centuries of tradition. Spanish whites are carving an exciting new niche, and regions previously abandoned are being revived with intent. The high quality and breathtaking diversity of Spain’s offer is not in question, rather its ability to effectively communicate this message to the world. That will be the true test for success.
