Juan2013 - Spanish steps

What motivated you/Wine Intelligence to open an office in Spain? And why Valladolid in particular?

Spain is one of the top 3 players in the wine world in terms of production. Furthermore it’s a country that has successfully shifted its mindset from a producer for the domestic market to exporter over the past 10 years. We have been working with Spanish companies for many years, first with the most experienced exporters like Rioja DOCa, Torres, Osborne, also with the Observatorio Espanol del Mercado del Vino (OeMv) and then with regions or companies that take export markets more seriously such as Ribera del Duero. Currently I’m also part of the Plataforma Tecnológica del Vino (PTV) which is a conglomerate of the main Spanish producers that aim to grow by innovating and understand better market trends. On top of that, via Madrid I will be closer to South America where we work with Chilean and Argentinean clients. Valladolid is a smaller city but very well communicated with Madrid but also with important wine regions such as Rioja, Ribera del Duero or Rueda among others.

The Spain Landscapes 2017 report has just been published . What are the most striking changes in Spanish consumer behaviour/attitudes?

The Spanish market cannot be understood without acknowledging the big influence that the economic crisis of 2008 had in Spain. The years of expensive wine in restaurants were over, consumers spent less and drank fewer bottles and essentially relied more on the big and trusted producers. It was a period of hardship and consolidation for many producers. Now it seems that the market has at least stopped decreasing, it’s now more stable and consumers are starting to be a bit more adventurous now. Consumers are seeking wines that are easy to drink and affordable, but at the same time are increasingly confident to try a wine that looks interesting.

For the first time, Spain Landscapes features trade interviews with key industry figures. Are they confident about Spain’s future as a wine exporter, in face of dropping consumption and increased competition from New World countries?

We have spoken to top professionals in Spain and I’m very thankful to them. There is a saying in Spanish “De la necesidad se hace virtud” which means “To make a virtue out of necessity”. This summarises well the fact that Spanish producers had to learn fast how to become an exporter. However for me Spanish wine still needs to work harder in order to get its indigenous varietals known, its regions understood and to have more relevant brands especially in the Premium sector. Spain has prestigious top wines and can make very affordable wines, but still needs to work hard to make wines other than Rioja or Cava known by the average consumer.

What is Spain’s biggest competition/threat? Climate change, New World super-brands, fast-changing consumer tastes with a slow to evolve wine trade, Brexit (I think the UK is in top 5 export countries for Spain in volume)?

All of those mentioned are great threats. Producers are harvesting earlier, sugar levels are higher so winemakers need to control alcohol levels in the wines. Brexit is also seen as a threat especially if the UK economy slows down and consumers don’t have the disposable income they used to enjoy. But perhaps another notable threat is the risk of trying to be too many things at the same times in export markets, Spain sometimes enters a market with all regions competing between them, producers offering very different things and all it achieves is confusion. Knowing what you want to be in a market and having some sort of unity is perhaps what would benefit Spain the most in export markets.

There has been talk, in Rioja particularly, how classifications like Joven, Crianza and Reserva can limit innovation in winemaking. But according to Landscapes 2017, the ageing classification is the 3rd most important choice cue (after Region/DO and familiar brand). Do you think it is worth hindering winemakers, if it helps the consumer?

For the Spanish consumer that sort of classification is very important. Consider that the Spanish consumer relies much more on regions or ageing than on varietals or brands like in other markets like the UK or US. The key thing to understand is that what might work in Spain it doesn’t necessarily translate in export markets. Spain needs to understand its target market and adapt the offering accordingly. Campo Viejo has been cited as a successful example when they dropped the Crianza name on their bottles and started to promote Tempranillo instead. That has worked very well for them.

You’re currently conducting research into how branding works in the wine category. Can you name a Spanish brand you think is doing well, and why? What can other Spanish brands learn from them? Or perhaps a specific campaign you’d like to comment on?

Brands work well when they are easy to recognise and trusted by consumers, when they tell the consumer “I assure you this wine is not going to let you down: it will taste good and your guests will think highly of you”. So, in branding, reassurance is as important as offering something new or exciting. Leading brands combine “Centrality” or fulfilling the category expectations successfully and “Distinctiveness” or being easily found and spotted in the wine shop by the means of being associated with a symbol, shape, colour or a combination of those. We see that the same brand can be an absolute leader in one market and completely undistinguished in another. So a successful brand is not the one that has a particular nice design or specific flavour but because of what they have achieved in consumers’ minds. In this sense Chilean brands have been very successful in some key markets where they are leaders. But some Spanish brands have also been very successful such as Campo Viejo in the UK where they combine being safe with easy to find like no other.

Valladolid is surrounded by wine producing regions. If you were to open up your own winery tomorrow, which region would you pick? Why? Any particular varietals or blends you’d go for?

That’s a nice thought but I think my strengths lie elsewhere. Considering how the export markets work for sure I would go for a combination of wineries so I could offer a well balanced repertoire to buyers. In this sense Torres are the example to follow as they can offer wines from Catalunya, Rioja, Ribera, Rueda and wines from Galicia among others, all of excellent quality.

For more information about the Spanish wine market, take a look at our latest report, Spain Landscapes 2017. 

Author: Juan Park

Email: Juan@wineintelligence.com