Now could be the time for Spanish wine to shine. At least that’s what many marketers and importers are hoping, as they see positive growth signs for Spanish entrants amidst a crowded field of wine players in the United States. “I see Spanish wines as the next discovery,” says Dennis Kreps, co-owner of importer Quintessential Wines. “Consumers are bouncing around from region to region, and right now they’re focusing on Spain.”
Matt Foley, brand director of wines for Pernod Ricard USA, also believes that Spain is on its way to moving away from the wine sidelines in the U.S. market. “There’s a lot of diversity, so consumers have much to discover from Spain,” Foley says. “It’s no longer just traditional brands with very traditional styles. We’re seeing a wider range of styles and a wider range of designs and brands, which makes it more interesting and accessible for consumers.”
Spain, the sixth-largest exporter of wine to the U.S. market, has seen ups and downs over the past decade, but leading brands have recently shown some strong positive momentum. In 2013, the 18 top-selling Spanish table wine brands combined for a 15.9-percent gain to 1.23 million nine-liter cases, according to Impact Databank. Marqués de Cáceres is the leader at a steady 158,000 cases, followed by Marqués de Riscal, which registered a 2.3-percent increase to 132,000 cases. New entrant Don Simon had depletions of 120,000 cases, while Campo Viejo gained 5.5 percent to 115,000 cases and Bodegas Muriel more than doubled its volume to 105,000 cases.
Sam Messina, co-owner of the Wine Connextion store in North Andover, Massachusetts, notes that positive press about Spanish wines has helped spur interest. “Of our 600 or so SKUs, about 50 of them are from Spain, and I plan to add another five offerings,” Messina says. “The region is taking a bite out of Argentina, and I think we’re going to cut back on Chile even more to make room for Spain.”
Over the past year or so, positive reviews of Spanish wine have been plentiful in outlets like Market Watch sister publication Wine Spectator, which named the 2004 Cune Imperial Rioja Gran Reserva the No.-1 wine on its “Top 100” list in 2013. Nicolás Bertino, international sales director for González Byass, says that the spotlight on a Rioja, as well as mentions of several other Spanish wines in Wine Spectator’s “Top 100,” helped underscore the quality and value message that marketers have been pushing for years.
Kreps agrees, noting that ranking a Spanish wine in such a high-profile spot “legitimizes” the category. “Consumers realize that one of the best wines in the world came from Rioja last year,” he says. “It spurs them to explore Rioja and see what it’s all about. Once consumers get into it, they discover there are great wines for the money at all price points.”
The boom in Spanish food in the United States is also driving more consumers to explore wines from the country. Julian Chivite, chairman and proprietor of J. Chivite Family Estates in Navarra, Spain, has noticed increased interest from importers. “That’s partly due to the popularity of the region’s cuisine, which is trendsetting at the moment,” he says.
Bertino notes the plethora of Spanish restaurants popping up around the country. “Spain is quite fashionable at the moment,” he says, noting that knowledge on the wine side still remains slim. “If you talk about the average wine consumer in America, they know very little about Spanish wines. The only category where they have a certain amount of knowledge is Rioja.”
This growing interest in Spanish cuisine is opening the door for more consumers to learn about the country’s wine. Spain is extremely diverse, boasting an array of varietals and regions with unique characteristics. Some varietals that seem to be capturing consumer attention include Albariño for white wine and Garnacha and Tempranillo for red.
“Rioja as a category is very strong right now, and Albariño as a grape is also very popular,” says Patrick Mata, cofounder of Olé Imports. “Overall, I see people shifting to more classic-style appellations. Within Rioja, people are seeking the old Crianza and Reserva styles. A few years ago people were running away from those wines, but now they’re very popular.”
Rioja is made primarily with Tempranillo, a grape that’s beginning to resonate with U.S. consumers. Foley notes that some major wine brands without defined countries of origin—such as Cupcake Vineyards—have launched Tempranillo line extensions. “It’s an indication that Tempranillo is on its way to becoming more of a recognized and mainstream grape variety in the United States, and that trend is really exciting for us,” Foley says. “We see it as one of the big opportunities for Spain.”
Foley also notes the expansion of Garnacha, which typically sells at the sub-premium or premium price level. “The growth of Garnacha has been an interesting development over the last two years,” he says. “It has a very approachable, fruit-forward style that’s helping attract more consumers.” Bob Paulinski, senior vice president of wine at Concord, California–based retail chain Beverages and More (BevMo), notes that Garnacha is “performing extremely well in both red and rosé styles.” He adds that dynamism is helping to fuel the overall Spanish wine sector at BevMo.
Regions are also differentiating themselves. “People are certainly buying across a broader spectrum,” Paulinski says. “Beyond Rioja, wines from the Toro, Navarra, Catalonia, Priorat, La Mancha and Ribera del Duero regions are also gaining traction. There seems to be more interest in the broad assortment from Spain.”
Ryan Arnold, wine director for several Lettuce Entertain You Enterprises properties, also notes the emerging regionality. “Right now, the Spanish wines that people are looking for come from Rías Baixas for white wine, as well as Rioja and Ribera del Duero for red,” he says. “Most of our selections come from those three regions of Spain, and they seem to be far and away the most requested.” Arnold adds that Spanish wines are represented on just three of the 10 wine lists for restaurants he works in, and Spanish wines continue to underperform compared to wines from California, France and Italy.
At the Four Seasons Hotel in Austin, Texas, beverage director Mark Sayre gets a lot of traction from Rioja and adds that wines from the Priorat region are increasingly easy to sell. “The power of these wines translates for many diners,” Sayre says. “We still live in a Cabernet-driven world, and Priorat delivers to guests who want a new experience. Many fantastic Old World wines won’t sway the New World drinker, but I find Priorat to be a fantastic segue.” One favorite at Four Seasons is the 2011 Alvaro Palacios Finca Dofí Garnacha ($154 a 750-ml. bottle).
On the white side, Albariño from Rías Baixas is resonating. “Beyond Chardonnay, Sauvignon Blanc and Pinot Grigio, Albariño has crept into the canon of the more educated and adventurous wine drinker,” Sayre says, noting the “favorable price point” for most wines made with the varietal. One favorite at the Four Seasons in Austin is the 2012 Pedralonga Albariño ($48 a 750-ml. bottle).
Virtually every major Spanish wine region “is growing by leaps and bounds at Wine Connextion,” Messina says. “The prices are just spectacular for the quality.” One favorite is the 2012 Bodegas Viña Nora Nora from Rías Baixas, priced at $13 a 750-ml. bottle.
As the popularity of Spanish wine increases, some marketers continue to struggle with the “value” moniker that often is associated with Spanish wines. They want consumers to see a strong quality-value relationship, but are weary of Spanish wines’ reputation simply as inexpensive options. While some report a trading-up trend, old perceptions remain.
“We still have that bargain image,” says Luis Burgueño, export manager for Marqués de Cáceres. “There’s an upside to that reputation, but also a downside when it comes to selling higher-end wines. People don’t want to spend $50 on a Spanish wine because they think their money is better spent on a wine from another country. We’re fighting that trend and trying to get consumers to understand that we offer values when it comes to everyday wines, but we can also offer great prices at the high end.”
Chivite notes that importers are typically looking for wines at around the $10 mark and says the value reputation helps Spain move lots of volume in the United States, but it’s a handicap for the country’s higher-end offerings. Kreps, however, believes the battle is getting easier and notes that Spain is retaining a positive quality-value image. “Consumers realize that a good Rioja Reserva brand at in the $15-to-$20 price range is equivalent to a lot of other regions’ $30-to-$40 wines,” he explains.
Michel Rolland recognizes the potential for Spain’s super-premium wine offerings. The renowned enologist has teamed up with Spanish wine producer Javier Galarreta to launch a new label, Rolland Galarreta, that focuses on the Rioja, Ribera del Duero and Rueda regions. Galarreta sees potential for Spanish wine as a category at the $20-to-$25 price point at retail in the United States. “Spain is now coming up,” he recently told Shanken News Daily, noting that the country previously hurt its reputation with too much reliance on the bulk wine segment. “Today, Spain is much more concentrated on producing quality wines, and I think it can play a bigger role in the global wine industry.”
Those price points are at the high end of the sweet spot for current Spanish wine pricing at BevMo. “It seems to me that the hot spot falls between $15 and the low-$20 range,” Paulinski says. Pricing will remain a key variable as marketers gear up for what they hope will be a sustained demand boom. But overall, marketers remain bullish for growth. “Consumers are fueled by their sense of discovery,” says Foley, noting the recent emergence into the spotlight of so many Spanish brands, varietals, regions and price points. “With the way the Spanish wine category is set up right now, it’s poised very well to thrive in that realm.”