Spain is a tempestuous wine market. It has a broad spectrum of regions offering a multitude of styles which fluctuate in popularity and fortune. Cava, for example, has been enjoying a revival across Europe in recent years but a harvest loss in 2023 of up to 55% has halted proceedings, while sherry is better known today for whisky ageing than it is wine production. In central Spain the Ribera del Duero region has just endured some extreme frosts which may be problematic for this year’s harvest, while one of its closest neighbours – Rioja – isn’t without its own set of challenges.
“We were slightly worried about a lack of rain, but that’s since changed quite dramatically,” says Guillermo De Aranzabal Bittner, deputy general director at Rioja Alta. “However, if we have another hot summer with hot nights, then we may have a similar problem to last year’s harvest.
“This is why we’ve been planning for the future, with climate change beginning to have significant impact on a more regular basis.
“One of the big projects right now is moving our vineyards to a higher location. Torre de Oña, one of our subsidiary wineries in Rioja Alavesa, has been buying very old vineyards since 2020 at up to 800m above sea level (almost double the average height of a Rioja plot).”
De Aranzabal Bittner says the winery has also been buying land at this altitude with the ambition of planting more vines at some of the highest points in the whole Rioja region.
“It’s a gamble for us because we don’t know if the grapes will mature effectively or not, and they still need to provide our house style,” adds De Aranzabal Bittner.
“Some of the existing small plots will provide limited-edition, very premium wine which will be released in September under the Torre de Oña name. Some of the wine will be used to improve other labels at Torre de Oña and another small amount will be used in our top wines at La Rioja Alta such as our Gran Reserva 904.”
Francisco Honrubia, director general of Familia Martínez Zabala, owner of Bodegas Faustino, the biggest exporter of gran reserva Rioja, isn’t as concerned about weather conditions in the region. “In Rioja we have plenty of wine stocks to compensate for poor conditions, so small pieces of frost aren’t a problem for us right now.”
Raúl Gil Garcia, international commercial & marketing director at Marqués de Cáceres, agrees with Honrubia, cementing the fact that “we have stocks to survive a poor harvest, unlike other, more fragile regions such as Cava”.
According to Honrubia, Faustino’s domestic sales have returned to pre-pandemic levels for the first time, but in terms of style, it’s not the full-bodied reds which are showing the most potential. “I think climate change and increasing temperatures around the world are pushing people more towards the lighter styles such as rosé and white wines, so it’s something we will continue to focus on,” says Honrubia.
“I also think it’s important to develop white reserve and gran reserve styles because they can be a standout product from Rioja in the global wine scene. But overall we’re continuing to increase our production share of white and rosé wines over red and I think it’s going to continue this way.”
Beer rivalry
It’s widely understood that younger consumers are opting for lighter-style wines which are more refreshing and easy-going than complex and full bodied. That’s another reason for the growth in rosé and white wines for the region, and De Aranzabal Bittner says beer is rivalling wine consumption domestically.
“Traditionally Spain has always been wine and tapas, but a combination of cheaper prices and lower abv has seen people switching to beer. The beer industry in Spain is very powerful and they’re imitating the traditions of wine – for example, they’re beginning to serve their beer in wine glasses, hold tastings and even use similar language to that of wine, and it’s working.
“Beer distributors in Spain are also providing a 360° service to bars which goes way beyond providing decorations and parasols. They’re offering financial support and providing free football licenses to gain more business, and they’re now beginning to buy out wine distributors. This is clever of them because they use the existing relationships of the wine distributors to continue selling the wines, but also offer beer through the same channel.
“For the premium end of the wine industry this is fine, so long as they know how to manage and handle the wine, but for the lower-quality wines which compete against beer it’s a big problem.”
In response, La Rioja Alta now has its own distribution operation in Madrid. De Aranzabal Bittner says that with such a growth in restaurant openings in the city it makes sense to have its own team based there with prospects to replicate the set-up in other cities.
Honrubia joined Familia Martínez Zabala in 2010 from outside the wine industry, which gave him a different perspective on the situation. “Wine consumption per capita is higher in the UK than it is in Spain, while beer consumption is higher in Spain, which many people would think is the other way around,” says Honrubia. “When I joined the company I realised that the wine distribution network was a bit old fashioned and fragmented. For example, we have to use more than 300 distributors just to cover Spain.
“If you ask any of the major beer distributors in Spain they will say that their strategy is to become an important player in the wine distribution business, but for me they’re yet to create a group of people with the knowledge to introduce fine wines. The opportunity is there for sure, and we work with a lot of the beer distributors, but I think they have to move forward.”
Better quality
According to De Aranzabal Bittner, one of the other major issues facing Rioja is the pricing structure. “Pricing is ridiculous, inflation has risen 15% but prices just 1% so it’s difficult for wineries right now. Fortunately we were able to increase our prices significantly last year, but for vinegrowers it’s even worse – 1kg of grapes is worth 70 cents in Rioja, which is nothing. Wine producers are struggling to support themselves on this so we need to increase the value of the grapes, and we can only do that by producing better-quality wines to sell for more.
“That’s what we’re trying to communicate because some producers are using 25-year-old barrels which have no effect on the wine, and there’s no minimum ageing time in bottle for crianza. So, there’s some basic regulations which we want to implement in order to grow the overall international reputation of Rioja.”
De Aranzabal Bittner says La Rioja Alta is in conversation with a group of wineries about the future of the category, of which these new basic regulations are a hot topic, and Marqués de Cáceres’ Gil Garcia says its wines go beyond the necessary requirements for the benefit of its own brand. “Of course the key to our success is pushing quality,” says Gil Garcia. “We age our wines longer than the minimum requirement anyway because we have our own standards when it comes to quality.”
Honrubia adds: “We need to improve the overall image of Rioja in our core markets because there are so many producers doing different things to their wine, which makes it difficult for consumers to identify what a good crianza is, for example. We would support regulation updates but we want them to be easy to understand for both producers and consumers, because it can get confusing if there are too many.
“I think regulation changes need to be based on the strong points of Rioja, those which will get it better recognised around the world.
“They also need to be focused on the future – where we want the category to be in another 15 years, otherwise we will be trying to tweak things every five years, which isn’t effective.”
It appears that Rioja brands across the region are all aligned with the idea of growing the presence and reputation of its wines, both domestically and overseas. However, the biggest challenge beyond climate change, local distribution networks and flawed regulations appears to be ‘how’, not ‘why’ they need to grow.
De Aranzabal Bittner concludes by highlighting an alarming trend within the category. “Over the past four years we’ve noticed the gap between the top Rioja brands and the more entry level ones, which equates to 95% of the overall market, growing significantly in terms of sales and investment [at the top]. This is a problem for everyone because we need to grow as one.”
