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Spain’s Gonzalez-Byass Sees U.S. Opportunity

January 30, 2013

Spain’s Gonzalez-Byass has long been known for its Sherry and brandy business, but in recent years the company has aggressively diversified into table wine, which now accounts for 44% of its export sales. Of Gonzalez-Byass’s roughly €200 million ($270m) in annual revenues, exports comprise about 35%. Shipments to the U.S. rose 12% to nearly 30,000 cases last year, and Gonzalez-Byass USA president Felipe Gonzalez-Gordon tells Shanken News Daily he’s targeting an acceleration to around 20% growth for 2013.

Gonzalez-Byass USA’s wine portfolio, handled by San Francisco Wine Exchange, includes Rioja’s Beronia, Somontano’s Viñas del Vero, Toledo’s Finca Constancia, Cadiz’s Finca Moncloa and Vilarnau Cava. Most of its wines sell in the $15-$20 range, an area Gonzalez-Gordon says is still ripe for growth. “With the very short harvest last year across France, Italy and Spain—down 20% or 25% in some places—lower-end export wines will go up in price,” he says. “That will close the gap between the lower end and the premium segment, where we operate, making our wines more attractive.”

Gonzalez-Byass sees U.S. opportunities for Beronia and Viñas del Vero in particular. Beronia has already gained critical recognition, landing among Wine Spectator’s annual Top 100 Wines for the past three years (its Rioja Gran Reserva 2004, $28, scored 92 points and ranked number-61 on the 2012 list). Viñas del Vero specializes in Garnacha, offering White ($15) and Old Vine ($35) versions. “There’s a U.S. following now for Garnacha from Spain,” says Gonzalez-Gordon. “We see an advantage in marketing indigenous varieties—where you can align the grape with the geographic place—rather than trying to duke it out in the ‘fighting varietal’ category.”

In Sherry, which still accounts for nearly 40% of Gonzalez-Byass’s global exports, there’s been “a bit of a resurgence” in the premium category, says Gonzalez-Gordon. “We’re having success with a 100% PX Sherry called Nectar ($25). It’s a sweeter wine and a unique proposition. Solera 1847, a cream Sherry retailing at $20, is also doing well. At the high end, our 30-year-old Sherries continue to receive a lot of interest from upscale retailers and restaurants,” he adds.

The Gonzalez-Byass spirits labels—Lepanto and Soberano brandies and Chinchon anis—are handled by Anchor Distilling in the U.S. market. Those brands, which compete at the premium level, are making inroads through appealing to the mixology community, Gonzalez-Gordon says.

 

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