Samuel Lowenberg - Independent Journalist biography articles articles

Rioja And Then Some

Forbes  June 06, 2005

 

Spain may be the Old World, but it has wine producers like the Barcelós who like the New World ways. Juan Enrique Barceló is part of a wine insurgency. While most French producers noticeably struggle, Spain is gaining. Hijos de Antonio Barceló has seen sales shoot up over the last decade from Ø10 million to Ø41 million. Mirroring the new boldness of Spanish exporters, the 130-year-old Barceló winery has pushed to open a U.S. market and now sells tens of thousands of cases to Costco and Sam's Club, the biggest warehouse-style retailers. For Juan Enrique and his two brothers, who share in running the wine business founded by their great-grandfather, the Gallic fall from a lofty perch in Old World winemaking is an opportunity. France in general has become a lesson in what not to do, some industry participants say, citing arrogance, high prices, poor marketing and unwillingness to adapt to modern palates.

By contrast, the Barcelós and much of the Spanish industry have been overhauling their techniques for more efficient production, consistent quality and flavorful vintages. Gone are the days of aging wine for three to six years in ancient, traditional barrels. Now Spanish wines are emerging full and fruity after a mere three to six months in new French oak. The stodgy character of the old-line wines fell to the revolution spearheaded by American critic Robert Parker, who, as the New Yorker put it, favors "blackberry jam wines." The Spanish have embraced the taste revolution. While traditional Riojas, from the region in the northeast of Spain, are still the biggest seller, Spain's insurgents want to move toward a broader "tierra de España" designation that will allow them to also incorporate regions like Jumilla, Toro and La Mancha, which alone may not yield predictably good wines at a consistent price. Blending across the map, more common in so-called New World winemaking, is an answer.

Spain actually has the largest vineyard acreage in the world, but frequently dry conditions limit output below that of France and Italy. In regions like Ribero del Duero, which has become increasingly popular, growers have invested heavily in more efficient growing and harvesting techniques. "When they become famous, production increases," says Rafael del Rey of the Spanish Wine Federation.

The haughty Bordeaux-driven insistence on selling by district of production and other pedigrees, when extended to producers of lesser note across France, has cost that nation as wine's popularization worldwide brings in new consumers. Patrick Dieterich, of Switzerland's wine importer Felsenkeller AG, says the French attitude has been "I know how to make wine, I know what's the best, and you have to buy it." France's sales by the case to the U.S. have declined 14% in the last four years.

Comparatively humble Spaniards like the Barcelós, meanwhile, are also taking charge at the sales end. As Del Rey says, "You need to have your salesman in an office in New York, with a telephone in one hand and a bottle of wine in the other."

For Hijos (sons) de Antonio Barceló that has meant sales offices in New York, Chicago and Miami, as well, plus their own warehouse for storing quality wines to guard against a shortfall. The $4 million plunge into the American market since 2000 involves an even bigger gamble: taking control of their own importing. Usually foreign wineries depend on specialized firms to get their product to market and are at their mercy. Get lost in the shuffle and you won't reach the distributor, the only really important step in the American market hierarchy, says Juan Enrique.

Comparatively humble Spaniards like the Barcelós, meanwhile, are also taking charge at the sales end. As Del Rey says, "You need to have your salesman in an office in New York, with a telephone in one hand and a bottle of wine in the other."

For Hijos (sons) de Antonio Barceló that has meant sales offices in New York, Chicago and Miami, as well, plus their own warehouse for storing quality wines to guard against a shortfall. The $4 million plunge into the American market since 2000 involves an even bigger gamble: taking control of their own importing. Usually foreign wineries depend on specialized firms to get their product to market and are at their mercy. Get lost in the shuffle and you won't reach the distributor, the only really important step in the American market hierarchy, says Juan Enrique.



By the Numbers

Ripe Sales

€700 million 2004 Spanish wine exports, up from €260 million ten years ago.

33% The yield of a Spanish vine compared with a New World one. 2.3 millionCases of Spanish wine exported to U.S in 2004, up from 785,000 in 1994.

Sources: Spanish Wine Federation; IWSR.

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