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.