Seeing the trees instead of the forest

 

Most of what we’re reading about the current situation of Rioja wine in the media is macroeconomic in nature – the forest instead of the trees, so to speak. Sales are down, production is up and consequently, the inventory to sales ratio – the yardstick with which the overall state of the Rioja business is measured internally-  is high:  over 3,5 years of sales, when it should ideally be somewhere between 2,8 and 3,2 years.  We’ve already discussed that here. As of today, no solution has been agreed on by wineries and growers, so let’s move on.

 If we start to look at the trees instead of the forest – the microeconomic point of view – some interesting things are emerging that I want to share with you, because they’re not only what you, the consumer, will see in shops, but what will ultimately help Rioja move ahead in the market.

Last week I was invited to the 2010 Web Awards ceremony sponsored by LA RIOJA, our local newspaper.  For your information, Marqués de Riscal won in the winery category (www.marquesderiscal.com) but for me, the really interesting part of the evening was a new brand that was served at the cocktail party afterwards – Viña Bujanda.

Carlos and Pilar Martínez Bujanda, Pilar’s daughter Marta Santander and managing director Pedro León have just launched Viña Bujanda, made from a selection of grapes from the winery’s estate near Fuenmayor – Finca Valpiedra – that had, up to now, been sold to other wineries.

Finca Valpiedra originally launched a reserva, Finca Valpiedra, followed by a crianza, Cantos de Valpiedra, ostensibly to appeal to a wider audience. I haven’t had the chance to talk to the family in depth about the new brand, Viña Bujanda crianza 2007, but it seems logical that with a strong euro with respect to the pound and the dollar, it’s hard to keep established brands at sensitive price points (£6,99 in the UK and $9,99 in the USA for crianza).  This creates a dilemma for wineries:  do they lower the ex-cellars price of their established brands and cajole the distributor to reduce their profit to meet the price point?  Short term, this works, but how do you raise the price again once market demand picks up?  Studies show that once you lower the price of a brand, it takes at least three years to increase it.  A more reasonable solution is to create a new brand to hit the price point and/or enter a new segment of the market (supermarkets, for example), to keep the cash flow going.  When the market picks up, you play down the ‘crisis’ brand and emphasize your main brand again.

This makes perfect commercial sense – you protect the image of your leading brand, you give your distributor a product to run with at an attractive price and more importantly, you give the consumer a good price.

Álvaro Palacios, who wrote the rules for selling high-priced Spanish wines with Clos Dofí and La Ermita in Priorat, surprised wine writers (and was soundly criticized, sad to say) in Spain when he released Camins de Priorat, an attractively priced, crisis-busting wine with his signature.  Other wineries, including Viña Bujanda, have followed his lead.

While politicians are trying to redefine the forest, wineries are busy planting new trees.  This has to be good for Rioja.

 www.familiamartinezbujanda.com

2009 Rioja sales down 6%

It’s official.  Last week the Rioja Regulatory Council released the 2009 sales figures for Rioja worldwide, emphasizing a worldwide drop of 6%.  The Spanish market, which accounts for about 70% of worldwide sales, decreased by about 5%.  This was a real surprise, as everybody thought that the decline in sales to restaurants, Rioja’s most important market in Spain, would be more dramatic.

Sales outside Spain decreased 9%, with a loss of about 9,5 million bottles.  In my opinion, this drop was due to two factors:

  • The weak international economy in general.  Rioja was selling at a premium to other wines and consumers were looking for bargains in other regions;
  • Exchange rate fluctuation – the euro was strong with respect to the dollar and the pound throughout 2009, making Rioja more expensive to buy in the UK and the USA.  In the UK, a market that accounts for 33% of sales outside of Spain,Rioja sold 6,6 million fewer bottles.  The US market took 1,3 million fewer bottles as well.  These two markets accounted for most of the decrease in sales.

My main objections to the current situation have to do with the concentration of sales to a few markets.  75% of international Rioja sales go to five markets:  the UK, Germany, Switzerland, the USA and Sweden and 87% to the top ten markets (the above plus Belgium, Holland, Mexico, Norway and Denmark).  I feel that more effort should be made collectively (that is, by the Rioja Regulatory Council) to make a push in emerging markets.  I remember  when I first started working at Campo Viejo about 30 years ago that  my boss actively supported collective investment in the Dutch market in spite of the fact that Campo Viejo was about the only Rioja sold there.  “A rising tide raises all ships”, he used to say.

My feeling is that collective investment in emerging markets is being stifled to protect the interests of wineries that have already made inroads there.  I believe that Rioja has to diversify its consumer base to continue on the path of steady growth and hope that the Regulatory Council will see the benefit in pursuing that policy.

On the road to Rias Baixas and Ribeiro

You might think that after almost 40 years of constant business travel I would relish staying close to my home in calm, uneventful Rioja.

You’re wrong.

In spite of putting up with driving long distances to catch flights, delays, cancellations, lost luggage, unfamiliar beds, strange food, going to bed and getting up at ungodly hours, and coups d’état in South America (no kidding!) I actually enjoyed getting out of Logroño to travel around the world.

So when Gerry Dawes,  long time buddy from both the wine business and Pamplona  asked me to join him and Basilio Izquierdo,  a Rioja winemaker who was responsible for the wines from CVNE for many years, for a quick trip to Galicia to taste wines, I jumped.  I needed to get out of Dodge for a few days.

I left three days after Gerry and Basilio because of a lecture I had to give at the local university, so I had all afternoon and evening on the road to myself to listen to the news, music and just think from the relative safety of a four-lane highway all the way from Logroño to Pontevedra.  Not a single stop light for 750 clicks.

This in itself is a huge improvement over roads in Spain when I arrived in 1971, when going to Galicia, or for that matter, anywhere else in Spain, was an all-day trip on narrow two-lane roads and over snow-covered mountain passes choked with trucks and buses, making passing next to impossible.

To make a long story short, I arrived at the first winery, Gerardo Méndez, in Meaño in Rías Baixas at 8 PM.  After tasting three wines, Do Ferreiro 2008, 2009 and Cepas Vellas 2007 at the winery, and Do Ferreiro 2006 with seafood at dinner I learned that these amazingly elegant, complex wines age beautifully, something that white wine drinkers would be wise to remember.

This message was reinforced the next morning at Palacio de Fefiñanes in Cambados where we tasted a tank sample of 2009, two 2008s, two 2006s including a wine aged for 30 months in a stainless steel tank before bottling, a 2005 aged the same way, a 2003 and a 1999.  These wines totally blew me away, especially the older vintages with their aromas of honey, peach and apricots and their long, elegant, unctuous finish.

Late in the morning we drove to Ribadavia, near Orense, to taste wines from Ribeiro.  Our first stop was at Adega Manuel Formigo in Beade, a colleteiro (‘cosechero’ in Galician).  Manuel prepared a tasting of base wines as well as the finished blends.

While approaching Ribeiro, my mind went back 35 years to the seafood restaurants in Madrid, where cheap, extremely acidic red and white wines from this region were served in small white bowls.  They were totally forgettable.

 It was evident that I had some catching up to do.

Ribeiro whites today are usually blends of treixadura grapes, with some godello, albariño, loureiro, torrontés, albilla and even palomino.  However, treixadura and godello seemed to dominate in the wineries we visited.

These two varieties complement each other very well.  Treixadura is very aromatic, reminding me of licorice, citrus fruit and pineapple, with an undistinguished palate but zingy acidity.  On the other hand, godello isn’t as aromatic but adds depth and length in the mouth.  

Our next stop was to Adega Emilio Rojo, a 15 minute drive up a mountain.  Gerry told me that Emilio was considered the ‘bad boy’ of Ribeiro, and his sense of humor and impish grin seemed to back this up, but the two tank samples of 2009 we tasted were anything but bad.  In spite of not being ready for bottling, both wines showed a herbal, floral nose, vibrant acidity and elegance.

That night we slept in a country inn that was also a winery, Casal de Arman, outside Ribadavia.  We asked the owner to let us taste his wines in tank and they, too, were excellent.

I’m glad I took the time to visit Rías Baixas and Ribeiro.  I was already pretty familiar with Rías, but Ribeiro was a pleasant surprise.  Rías Baixas wines are widely available but Ribeiro takes a little more time to find.  Ask your local wine shop if any are available.  You won’t regret it!

Amaren reserva 2001 by Bodegas Luis Cañas

 

In our family we celebrate birthdays and saint’s days.  I was introduced to this Spanish custom by my father-in-law Antonio, who used to invite his family for a drink before lunch on San Antón, (St. Anthony Abbot), January 17. 

 We decided when our kids were growing up that we would treat them and ourselves by going out to dinner whenever one of our saint’s day fell.  Last week, January 28 was St. Thomas Aquinas, so it was my turn.

 The rules in our family are that you can choose where you want to go and can order whatever you want, so I decided we would go to the Iruña, a small restaurant on calle Laurel in the old part of Logroño.  We like it because it’s cozy, usually packed, often with people we know (after all, Logroño is a pretty small place) and the food and wine list are terrific.

 I decided I was going to order a steak, and as I looked over the wine list, saw Amaren reserva 2001 by Bodegas Luis Cañas and decided it was a perfect match. I had taken lots of wine writers to the winery over the years and knew the winery and wines very well.

 Bodegas Luis Cañas was founded in 1928 but the Cañas family had already been growing grapes for over one hundred years around Villabuena in Rioja Alavesa.  The family winery started as a cosechero, but gradually started buying barrels for aging the wines.

 Today, the company owns 90 hectares of vineyards and buys grapes year after year from farmers controlling another 200 hectares, all in Rioja Alavesa.  Their grape selection process is the most elaborate of any winery I’ve ever seen.  The winery keeps records of the 815 vineyards that supply grapes, with each one classified by age and varieties planted, so the winery knows which grapes are likely to be used for each wine.

 Each cluster of grapes is placed on a selection table where unripe or damaged clusters and leaves are removed, after which they go to a second table where each individual grape is examined.  The grapes are vinified in batches according to quality.

 Amaren (‘for mother’ in Basque) is a homage to Juan Luis’ mother and one of the winery’s top brands. The back label indicated that it’s 100% tempranillo from vineyards over 60 years old, aged for 18 months in French oak.

 My tasting note (a habit I can’t avoid, even at restaurants), made between bites of steak and roasted red peppers, said,

 Color:  intense black cherry

Nose:  dark fruit, spices and a hint of smoky oak

Palate:  ripe, elegant fruit with good acidity, a medium mouthfeel and a very long finish.

A modern Rioja showing a lot of  fruit but with the tannin and acidity to give it long life.  After ten years it showed perfectly.

 We shared a plate of artichoke hearts with small pieces of ham smothered in a slightly thickened sauce from the artichokes, and a big steak brought sliced and almost raw to the table on a sizzling hot clay plate, where we cooked each piece to our individual taste, with French fries and slivers of roast red peppers on the side.

 A lot of people say that you should never mix artichokes and wine because the artichokes give the wine a metallic taste, but I’ve never found this to be the case the way they’re cooked in Rioja.

 Amaren 2001 was the perfect choice with our meal.  As Toñica said, “good to taste and good with food!”