Rioja Wines Make Inroads With U.S. ConsumersJune 18, 2014
Spanish wines have been enjoying growth in the U.S. market, with bottled shipments up by more than half a million cases over the past two years. Within the 4.6-million-case Spanish category in the U.S., wines from Rioja have been a major contributor to growth. In 2013, Rioja’s shipments to the U.S. jumped 18% to the equivalent of about 1.1 million cases, capping a run in which its U.S. presence has expanded by nearly three-quarters since 2009.
“We’ve identified the U.S. as a key market, and we’ve broken the awareness barrier with U.S. consumers,” says José Luis Lapuente Sánchez, general manager of the Consejo Regulador D.O.C.a. Rioja. “Our aim is to participate along the whole range and concentrate especially in the affordable quality areas, where consumers can buy every day and not just for special occasions.”
Much of the D.O.C.a.’s focus is on educating the market about Rioja’s Reserva and Gran Reserva wines, which already account for about 60% of the category’s U.S. volume. “We’re able to compete very effectively in the $20-$50 range,” Lapuente says. “These wines are unique because they’re ready to drink but can also be kept in the cellar, and because they’re affordable.”
Currently, Rioja exports only about 37% of its total 31-million-case volume, but the industry is aiming to balance its domestic/export sales ratio to 50-50 by 2020.
One standout Rioja producer that’s been drawing global attention to the category is Compañia Vinicola del Norte de España (CVNE), whose Rioja Imperial Gran Reserva 2004 was named Wine Spectator’s Wine of the Yearfor 2013.
CVNE produces about 200,000 bottles each of its top cuvées Imperial and Contino and several hundred thousand cases of its lower-priced Cune and Viña Real labels, with prices ranging from about $15 for Cune Crianza up to $100 for Contino’s single-parcel offerings. About 25% of the company’s production is exported. “Our wines have been very much ‘insider’s’ wines,” says CVNE CEO Victor Urrutia. “I’d like them to go beyond that, to be widely accessible.”
Enhanced distribution going forward will be vital to furthering that vision. Where CVNE can’t find the right partners, Urrutia says, it will look to acquire existing players or create distribution units of its own. The company, which has a market capitalization of around $350 million, recently made such a move in Japan, where it purchased fine wine distributor Mikuni earlier this year. CVNE also already has its own distribution operation in Spain and, as it looks to exert control of its destiny in export markets, Urrutia sees opportunities to distribute agency labels as well as the company’s own brands. In the U.S., CVNE’s wines are imported by Europvin.
“I see us as ambassadors for Spain,” Urrutia says of CVNE’s role in the category. While noting the opportunity for Spanish wines to continue rising in the global market, he adds that the segment faces certain challenges as well, including the danger that Spain’s reputation for value at the lower end of the market could ultimately impede its luxury-tier progress down the road. “The threat is the large Spanish producers who make huge amounts of wine and sell it at super-low prices that we can’t even contemplate,” he says. “In the end, I think that hurts the Spanish category.”