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Rioja’s Bodegas Franco Españolas Focuses On U.S. As European Markets Struggle

July 10, 2012

One of the oldest and largest wineries in Rioja, Bodegas Franco Españolas sees ample potential for its namesake brand and the Rioja category in the U.S. market, where both are underdeveloped.

Established in 1890, Bodegas Franco Españolas produces around 1.1 million cases a year. Its top markets include Spain, Scandinavia, Germany, Switzerland and the U.K. With Europe’s economy currently bogged down, the group has increased its emphasis on other export markets, with particular focus on the U.S. and Mexico. In the U.S. market, Franco Españolas joined the portfolio of New Jersey-based Vision Wine & Spirits last year, after previously partnering with several smaller regional importers.

“Rioja is relatively well known, but it’s still underrepresented in the U.S.,” says Bodegas Franco Españolas export manager Juan Carlos Llopart. “We have the resources to become one of the major players in the category.” The brand currently sells around 11,000 cases in the U.S., across a range that includes Crianza ($12), Reserva ($15) and Gran Reserva ($22) reds; a semi-sweet white, Diamante ($11); and an entry-level Royal label ($9) with red and white variants. New packaging will be rolling out across the line in about six months.

Across its export markets, Franco Españolas’ higher-level wines have been growing at around 30%, Llopart says. In the U.S., Diamante presents an opportunity because of its sweeter profile. “Some retailers are beginning to break out sweet whites into their own separate section,” says Mark Tucker, director of marketing at Vision Wine & Spirits. “That’s where the market’s headed, and we’re capitalizing on it. Diamante’s up 11% this year for us.” Diamante isn’t as sweet as most of the Moscatos on the market, Llopart says, noting that it has 36 grams of residual sugar per liter, versus 2 grams for most dry whites from Rioja and as much as 120 grams for some Moscatos. “It’s sweet, but it’s not syrupy and you can enjoy it with food,” Tucker adds.

While Bodegas Franco Españolas is sanguine on its long-term growth prospects, challenges remain as it looks to differentiate itself in a crowded market. “With all the consolidation in the industry, there are fewer and fewer distributors, and they’re not especially looking to develop new things,” Tucker says. “So it’s a matter of coming in with the full marketing program to make it easy for them, not just quality wines.”


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