Producers and importers of Spanish wines have been known to bristle at the recurring assessment that the category offers good value. Most would agree that Spanish wines do indeed offer an attractive quality-price dynamic, but it’s the word “value”—the implication that Spanish wines should be inexpensive—that some say is detrimental to the higher end of market.
“Little by little, people are moving to higher quality wines, but it’s difficult to rid ourselves of the ‘good value’ image,” says Nicolás Bertino, CEO and manager of González Byass USA. “That reputation helps sell bigger volumes, but it’s a handicap when it comes to selling higher-priced wines from single estates, when importers are typically looking for wines at around the $10 mark.”
Andrew Holod, national sales manager for Grapes of Spain, Inc., focuses on smaller, often family-owned wineries. He’s making inroads as buyers become increasingly cognizant of the quality Spain has to offer, but hurdles remain. “We still see retailers reluctant to stock the mid-to-upper-tier Spanish wines,” despite the fact that they typically over-deliver on quality, Holod says. “A $12 wine from Spain is competent and potentially interesting, and an $18 wine is likely to be world class,” he adds.
The lack of development of a luxury tier of Spanish wines in the United States is “probably our biggest gap,” according to Javier Murua, co-owner of Bodegas Muriel, Viña Eguía, Conde de los Andes and other wineries. “We’re recognized as very good value, but I don’t think the consumer has the perception of Spanish wines being as luxurious as they perceive France or Italy,” he notes.
Daniel Toral, beverage director for 50 Eggs Inc.—which owns Chica at The Venetian Las Vegas, as well as other restaurants—assesses the situation from a different viewpoint. Chica’s wine list is dominated by South American wines, although Spanish wines make up about 25 percent of the menu. “More and more guests are willing to pay a little more for Spain than for Chile or Argentina,” Toral says. “With a little push from our sommelier, we’re able to get those wines in front of people.”
Investing Behind Brands
Spain is an Old World producer that doesn’t have the history or reputation of peers like France and Italy. Instead, it’s often viewed as a newcomer along with many New World producers. Murua says the onus is on producers and importers to ensure Spanish wines are properly recognized. “Our introduction to the market has really only been over the last 10 to 15 years, and establishing a premium brand takes a lot of time and consistency,” he explains. “Though we’ve had that in the domestic and European markets, the U.S. market is still quite new to us. We need time, patience and investment.”
Communication is also key in a competitive landscape that includes luxury stalwarts from France, Italy and elsewhere. “The difficulty for Spain is to open up the sector to more expensive wines, where France and Italy are very well represented,” says Bertino of González Byass. “Spanish wines are obliged to have strong brands that are well-rated. This is a long-term job and one in which communication is more important than price.”
Patrick Mata, co-owner of Olé Imports, agrees that connecting with consumers is the best strategy for growth at the higher end. “Our company is making great effort to directly engage with the consumer and do events where we show them higher-end wines,” he says. “If we weren’t doing those types of events, selling higher-end wines would be almost impossible. Without them, consumers risk paying $50 for a bottle they don’t know about.”
For online retailer Wine Access, Spanish wines priced between $20 and $25 are growing, but the sector is dragging down the company’s average retail price because Spain has few players in the $50-plus price category. Matt Deller, a Master of Wine and the chief wine officer at Wine Access, suggests communication needs to ramp up. “Collectors seem to have a mild interest in Spanish fine wine, but there’s a lot of opportunity to build awareness for classic Spanish wines as a cellar must-have,” Deller says. “More vertical tastings for collectors, trade and media are recommended.”
Murua of Bodegas Muriel notes that Rioja has invested considerable resources in promoting its wines to U.S. consumers, but suggests that a more individualized approach is warranted. “If we promote it as generic, Rioja will be recognized as generic,” he says. “Investment in the luxury and premium sectors has to be made by the brand.”
One development that helped start conversations about higher-end Spanish wines occurred in 2013, when Wine Spectator named the Cune Rioja Imperial Gran Reserva 2004 as its Wine of the Year. Dennis Kreps, owner and national sales manager for importer Quintessential Wines, says that “did a lot to legitimize the country.” Listings in prominent restaurant chains followed and have stayed strong. Because of the nature of his portfolio, Kreps sees thriving demand for Spanish wines at higher price points. “We’ve always had a little bit of trouble with a consumer understanding what a Crianza is, but once you get to Reserva or Gran Reserva, the recognition is a little better and the pull-through is a lot better,” he says.
Rioja Classification Changes
Changes in the way producers communicate provenance and quality are underway in Rioja, Spain’s most prominent wine-producing region. In June, Rioja’s Consejo Regulador voted to approve the creation of a single vineyard, or “viñedos singulares,” classification. Under restrictive rules, the change will allow wineries to identify a single vineyard of origin on wine labels. At press time, the Consejo Regulador was expected to consider another change, allowing the naming of specific villages in which a wine is produced.
The vineyard classifications will complement the existing age statements for Rioja wines: Joven, Crianza, Reserva and Gran Reserva. “The vineyard designation will step up the image and reputation of the region,” Kreps says. “It will start there and then move into village-level wines as well, so you’re going to have a Burgundy-like classification system for Rioja which will move prices and reputation up.”
Mata of Olé Imports notes that the changes will give consumers a better understanding of the region’s attributes. “There are many faces to Rioja and now communication is going to be deeper and more thorough, and that’s going to engage more consumers,” he says. But Murua of Bodegas Muriel says the new designations could run the risk of “over-informing” the consumer. “Sometimes we need to consider how much information we can supply to the consumer versus how much information they can retain,” he explains.
Delivering Value
While producers and importers seek ways to gain recognition and volume for Spain’s higher-end wines, many others are fully capitalizing on that “value” mantle that has long been associated with the category in the United States. “Spanish wines represent a great value at all price points and segments,” says Taylor Case, vice president for the Southeast region at Vineyard Brands. “There’s opportunity to communicate to the average wine consumer the price-value benefit of Spanish wines, and also to showcase the overall category.”
Jo Adamo, vice president of marketing for wines and Champagne at Pernod Ricard USA, says wines like Campo Viejo and other category leaders have “tapped into a drinker that’s looking for more modern wine styles that are great with food. These wines are great for everyday consumption.” Adamo says volume of Spanish wine overall is “fairly flat,” but that value is rising, with multiple brands competing in the $10-to-$15 price band.
Case notes that the “sweet spot” for pricing at retail is edging up somewhat, rising to $12.99 to $14.99, compared to $9.99 to $11.99 a few years ago. Holod has a different experience. He says Spanish wines in the Grapes of Spain portfolio were averaging well above $15 at retail before the economic collapse of 2008. Since then, “our average price is down at retail,” he says.
Volumes are also stagnating, although leading brands had wildly varying performances in 2016. The top two Spanish wine brands in the United States—Marqués de Riscal and Campo Viejo—both registered double-digit volume increases, as did a number of other top-20 wines. But those gains were countered by a similar number of double-digit declines. In total, 19 leading Spanish wine brands combined for a 0.3 percent decline to just under 1.3 million nine-liter cases, according to Impact Databank. Those wines together accounted for 30.9 percent of Spanish wine volume in the United States in 2016.
Complementing Food
At any price point, wine professionals say value is a key driver in consumer interest in Spanish wines. But that’s not the only draw. Darren Scott, general manager and sommelier at Red Room Lounge in Austin, says Spanish wine works on every level of his wine program. “Spain treats wine as part and parcel with a meal, so there are many affordable, idiosyncratic styles that pair extremely well with food and my guests really love,” Scott explains. Red Room’s by-the-glass selections include the 2016 Rezabal Getariako Txakolina Rosé, made from the Hondarrabi Beltza grape varietal ($13), and the 2015 Bodegas Alfredo Maestro Viña Almate Castilla y León Tempranillo ($12). When it comes to the restaurant’s bottle selections, Scott says his guests are seeking bottle aging and an affordable price, which wines from Spain regularly deliver. One popular label is the 2005 López de Heredia Viña Bosconia Rioja Reserva ($82 a 750-ml.).
Wine professionals also point to the modern techniques employed by some Spanish winemakers, which helps to differentiate them from Old World stalwarts. “Spanish wines are generally clean and polished, and many of the newer regions are focusing on a more international style of wine that resonates with American drinkers,” says Brahm Callahan, beverage director and master sommelier of Himmel Hospitality Group. “Generally speaking, most Spanish wines are great values. Regions like Ribera del Duero or Toro produce world-class wines that are values when compared to similar wines that come from the domestic market. While they might be modern in style, most Spanish wines are still extremely food-friendly, making them appealing for the table as well.”
At Himmel Hospitality’s Grill 23 & Bar in Boston, two popular Spanish selections are the 2007 Viña Ardanza Riserva Rioja ($78 a 750-ml.) and the 2012 Hacienda Monasterio from Ribera de Duero ($110). Taurean Philpott, a wine consultant for Murphy’s Restaurant in Atlanta, also notes the value and style combination. “People are drawn to Spanish wine due to the fact that it has Old World sensibility with New World flavor,” Philpott says, adding that “value is a big part of Spanish wine, as many are priced very well.” Two wines exemplifying that value, according to Philpott, are the 2011 Marqués de Cáceres Reserva from Rioja ($52) and the 2006 Can Ràfols dels Caus from Penedès ($56).
Ripe for Exploration
One factor that could work in Spain’s favor, aside from the value proposition of its wines, is the fact that many of the country’s wine producing regions are largely unknown in the United States. “The American consumer is not generally up to speed with the different Spanish Denominaciónes de Origen—historically the most recognized tend to be Rioja and Ribera del Duero,” González Byass’ Bertino notes. But, he adds that American wine drinkers are increasingly “curious and open to trying new things,” which bodes well for the sector.
Rioja is by far the most prominent region in Spain, offering a familiarity to consumers that other regions can’t currently match. That can help with those who want a certain comfort level. “We push regions and varieties other than the easily recognizable ones, but always find that established estates in Rioja outsell others,” notes Toral of 50 Eggs.
Other regions, or in some cases individual varietals, are ripe for exploration. “In the on-premise, I believe we will see millennials exploring more of the lesser-known regions and varietals as they are very adventurous with their selections,” says Case of Vineyard Brands. “This will help with varietals like Verdejo and Albariño, as well as Spanish red blends.”
Olé Imports’ Mata is currently bullish on wines from the Galicia region in Northwest Spain. “Before, Spain was about Priorat, Rías Baixas and Rioja,” he says. “The next phase for American wine drinkers is to learn about small, artisanal producers located all over Spain. There is a great concentration of them in Galicia. There are more than 200 varieties grown in this area, so there’s a lot of room for discovery.”
Mata sees a bright future in coupling millennial consumers with Spain’s diverse offerings. “Spain produces wines that millennials like to drink—not only in terms of price point but also varietal and regional diversity, regional growth, and the emergence of artisanal producers,” he says. “They just need to be conscious of engaging the consumer.”