Back to the Future? First Impressions of Wine and Wine Tourism in Cyprus

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Cyprus is known for many things: culture (fantastic archaeological sites), cuisine (haloumi, the wonderful grilling cheese), international politics (the ongoing dispute with Turkey over the island itself), and tourism (beautiful beach resorts).

Cypriot wine? Probably not on your radar for reasons I will explain in next week’s column. But that wasn’t always the case. Commandaria, a wonderful sweet wine, was once treasured throughout Europe along with Tokaj, Sauternes, and Vin de Constance. Cyprus Sherry was popular, too, and bulk wine exports once found their way to Russia, the UK, and elsewhere.

Cyprus wine today? Not much seen outside of Cyprus. But that might be changing. Stay tuned.

Pafos: Cultural Capital of Europe

Sue and I came to Cyprus as guests of the Cyprus Tourist Organization to attend the 10th Cyprus Wine Competition in Pafos and spend several days exploring wineries and wine tourism opportunities. This is the first of several columns that report what we learned from this fascinating experience.

Our first day in Pafos was spent recovering from jet lag and taking in a few sights. It was a short walk from the luxurious Almyra Hotel  where we stayed to the archaeological park (a Unesco World Heritage site!) where we saw beautiful mosaics featuring wine-swilling Dionysus (how appropriate) and saw the Berlin Philharmonic Orchestra was setting up for a lunch concert.

Wait! The Berlin Philharmonic? Yes. Pafos is a European Capital of Culture for 2017 and there is a fantastic line-up of events planned for the year. The concert was sold out, so we couldn’t stay, but we could hear the music quite clearly from the balcony of our hotel room. A sweet introduction to Cyprus!

Cyprus Wine Industry Symposium

It was back to business the next day. I gave a keynote speech to a Cypriot wine industry symposium that also included speakers from OIV, local university research projects, and the head of the wine competition.  Panos Kakaviatos, who was part of our group of international visitors, has written about this event and the Cyprus wine industry more generally on his blog Wine-Chronicles.com — you should check it out.

I spoke about the lessons that can be learned, both positive and negative, from successful wine regions and several of the points I made seemed to strike a chord with the Cypriot winemakers. Here’s a quick summary of the key take-aways.

Competition versus Cooperationc1

Wine is a very competitive business, but one lesson I have learned is that successful wine regions find ways to set aside retail competition to a certain degree in order to cooperate to build reputation and the regional “brand.” Cooperation is the key, both among wineries and also with local and regional tourist and government authorities.  There really is strength in numbers.

This simple point seemed to resonate with many people in the room who commented about it later that day and when I talked with them later in the week, too. Everyone seemed to believe that Cyprus wine players need to learn to work together more effectively and to build the public-private partnerships that are so useful in other wine regions.

I sensed that there was pent-up frustration about the lack of teamwork. My goal in giving talks like this one isn’t so much to tell people what to do as to give them something to think about and if my remarks stimulate some thought and eventual action in this regard I will be very satisfied.

Wine Tourism Leverage

Since we were visiting as guests of the tourist authority, I spent a little time talking about how important wine tourism can be, not just to sell wine, but to create brand ambassadors who will carry the story of your winery and region with them when they go home. Cyprus has the raw materials — excellent wineries and world-class tourism infrastructure. Leveraging these resources through wine tourism seems like the logical next step.

But it will take work (and teamwork) to accomplish this. One winemakers told me frankly that no wine tourists came to his winery. Plenty of tourists visited — they stopped by, tasted wines, and made purchases. Indeed, his winery could not survive without the tourist trade.

But they are not wine tourists, he said. The haven’t come to this part of Cyprus because of the wine.  Creating real wine tourism, where wine drives the agenda, that’s a challenge.

One Wine to Rule Them All?

Readers of this column already know the I am skeptical of the idea that every region needs to have a “signature variety” of wine. Napa has Cab, Argentina has Malbec, New Zealand has Sauvignon Blanc. We need to put all our chips on one grape variety to power our wine industry, too. That’s the conventional logic and I have my doubts.53994_lg

As it happens, Cyprus is having its own “signature” wine discussion just now and so my comments got some attention. Commandaria (a.k.a. “the world’s oldest wine”), we were told, was the key to raising the international profile of Cypriot wine.  The Cyprus wine people we talked with were convinced about this. Commandaria will lead the charge and the other wines will gallop behind to victory.

The “internationals” in our little group were unconvinced by this strategy and hopefully our comments were helpful even if we really didn’t change anyone’s mind. Commandaria is a sweet wine, we said, and sweet wines are a small category and a tough sell around the world today. Port struggles to get traction. Commandaria faces a steep climb.

The thing about Commandaria is that it is unique to Cyprus and has a distinguished history. But I am not sure that the wine is well known outside of traditional markets and so selling it requires expensive consumer education resources, which might more effectively deployed elsewhere.

It might be better to have another wine lead the way, one that fits into a more popular market segment. Xinistera, for example, a delightful dry white wine with instant appeal.  More about this is future columns.

Everyone Loves a Winner

Finally, I noted that many wine regions use wine rankings and competition results to promote their wines. Consumers are drawn to lists and ratings like the Classification of 1855, for example, or the Wine Spectator Top 100. I suggested that Cyprus had some work to do to get the word out about its finest wines in this way.

The wine competition we came to Pafos to attend, for example, seemed to be a Cypriot secret. It was difficult to find any mention of it on the internet. And the results from previous  years were nearly impossible to find. A missed opportunity to cultivate interest by promoting the best that Cyprus has to offer.

It didn’t take long for this message to sink in and for action to be taken, which is great. I am hoping that the 2018 wine competition will more thoroughly publicized and that the wineries will be able to leverage the results more forcefully, both in domestic and export markets.

In the meantime, the 2017 Decanter World Wine Awards results have been released and 78 Cypriot wines received recognition. That’s a great opportunity for the Cyprus wine industry to blow its own horn and for consumers to begin to learn about the excellent wines made on this beautiful island.

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Greetings and thanks to everyone we met on our brief visit to Cyprus. Special thanks to Maria, Panos, Per, Jean-Claude, Dimetri, Georgios, Patrick, Pambos, Mary, and Nektarios. (More thanks to come in future columns.) Come back next week for an analysis of the state of the Cypriot wine industry today and the unexpected history behind it.

Goodbye Columbus? Three Variations on a Barcelona-Based Wine Tourism Theme

kvesp1089pThe monument to Christopher Columbus at the foot of the Las Ramblas promenade must be one of the most-viewed sights in very scenic Barcelona. Standing atop his tall column, Columbus points to the sea, an act that makes sense both for Columbus himself and for Barcelona, a city that has long turned its face to the sea and to the international influences that it provides.

Columbus points to the sea — that’s what people think he is doing. But I have another, somewhat less literal theory. I think that he is really pointing, in a vague and perhaps somewhat misguided fashion, away from Barcelona’s bright city lights and toward the not-too-distant vineyards — to the Penedés and Priorat wine regions. Tourists, he is saying, you need to visit wineries and learn about Spanish wine!

My evidence? Wishful thinking, of course (reinforced by a poor sense of direction),  but more significantly this fact: if you walk down the stairs in the base of the Columbus’s column you will find not a maritime museum as you might expect but a wine tourism center, there established to help you enjoy winery visits in this region.

Visitors to Barcelona really should make time to visit wineries — and many thousands of them do. Columbus was busy during our visit, so we relied upon FEV, the Spanish Wine Federation, to organize our itinerary. Here are three case studies that show different sides of wine tourism in this part of Spain.

Arte Nouveau Cava at Codorníucodorniu

History is an important part of any visit to Codorníu-Raventos. Josep Ravenos was the first to make a Spanish sparkling wine using the traditional method and it is a leading producer of Cava wine today.

Codorní receives about 80,000 guests each year and most of them begin their visit in the extravagant arte nouveau hall that you see here (the exterior architecture is just as fascinating and unique). The tour makes good use of the beautiful gardens, which hold many delights including a fascinating wine museum in another striking arte nouveau building.

We met with the  head winemaker, who was excited help us understand Cava today and to show us the lab where he experiments with micro-fermentations in a constant effort to raise quality and draw out new expressions of Cava. It was an intense and fascinating visit.

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Take the Frexinet Cava Train

The architecture is distinctive and historic at Freixenet, but what’s inside the building (and underground, too) was more the point here. We walked down, down, down — deep underground — to the miles of tunnels where Cava was stored for second-fermentation in the bottle for many years.

Like most of the 90,000 visitors who come here each year, Sue and I boarded a small train to tour the tunnels — if you have visited Champagne you may have taken a similar ride there. One of our stops was at the yeast lab — Freixenet believes that their distinctive yeast variety is one key to the unique quality of their wines and so they put much effort into yeast research. Fascinating.

A special tasting was set for us with Pedro Bonet, head of the Freixenet winery family and President of the Cava DO. The goal of the exercise was to show us the enormous diversity of Cava and it was an eye-opening experience. Cava isn’t one thing or two, but a whole spectrum of tastes and aromas. Delicious!

Both Cava winery visits impressed us with the fact that while Cava is a product that uses traditional winemaking techniques, it is also constantly changing both to improve quality, develop new expressions of the wine, and to achieve more efficient production. The market for sparkling wines is very competitive — both among Spanish producers and between them and international rivals. Robots and machines now replace workers where possible for routine jobs, freeing human creativity for higher tasks.

There was much more to see and do at Freixenet, but we had to move on. Lunch was waiting at our next stop!

The Torres Experience

winedayOne of the brochures we found at the wine tourist center at the base of the Columbus monument was for Miguel Torres. “Wine Day at Torres Winery” presents a number of options for Barcelona tourists including a seven hour guided bus tour with stops at Torres, Jean Leon and Saint Sadurni d’Anoia wineries for €71 (children under 8 ride free) or an 8 hour guided bus tour with stops at Torres, Montserrat (with tastings of traditional liqueurs), and a tour of scenic Stiges for €63.

Not everyone likes a bus tour so train and auto options are also on offer. Take the train from Barcelona to Vilfranca del Penendés, for example, then a shuttle to the nearby Torres winery for a visit, tasting, and return trip with a tour of the scenic village.  The trip lasts about 5 hours and costs just €15. I think it would be very pleasant way to spend a day riding the train, seeing the countryside and enjoying the wine experience, too.

There are many options for Torres wine tourists with their own transportation, which you can view at the Club Torres website.   Our tour of Torres began with lunch at the winery’s Restaurant Mas Rabell, which features a daily set menu of traditional cuisine paired with Torres wines, of course. What a great way to taste the wines! We enjoyed chatting with Miguel Torres, who had attended my FEV talk in Valladolid and asked the toughest questions.

Then we toured the Mas La Plana vineyard and winery with a winemaker. The vineyard, planted to Cabernet Sauvignon vines, redefined the idea of wine in this region and the Mas La Plana wine, which has its own winery, raised the bar, too. The tour stressed quality, innovation, and sustainability.

Torres, Freixenet and Codorníu are three case studies of wineries that have invested in wine tourism and are gaining the benefits, both for themselves and their communities. They are great role models for other ventures around the world.

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Goodbye Columbus and Barcelona, too. Sue and I loved visiting the city and learned a lot at our winery visits. Thanks to everyone we met for their kindness and hospitality.

Sketches of Spain: State-of-the-Art Wine Tourism Does More than Sell Wine

pagosWine tourism is no longer about just selling wine. Wineries understand that it is a way to build or strengthen a brand and to create brand ambassadors. The United Nations World Tourism Organization Wine Tourism initiative goes further . The UNWTO  proposes that wine tourism is or can be a set of rich experiences that use wine to connect history, culture, tradition, and cuisine in a way that links the global tourism market to distinctive local environments.

The best wine tourism experiences, like the best tourism experiences generally,  surprise, delight, inform and sometimes inspire and transform. That’s a powerful force. I guess that’s why wine tourism is one of the fastest growing segments of the wine industry.

Sue and I encountered several state-of-the-art wine tourism programs during our recent FEV-sponsored visit to Spain. Here are sketches of three of the most memorable to give you a sense of what’s on offer in this dynamic wine nation. Come back next week for three more case studies.

More than a Museum

You travel to Morales de Toro by passing through acre after acre of century-old goblet-trained Tinto de Toro (the local variety of Tempranillo) vines. What a sight! When you get there you are drawn to the Pagos Del Rey Wine Museum, which is located in the building that once housed the local cooperative winery and radiates the sense of its utilitarian origins.

Most of the wine museums I have experienced are built around collections of old equipment, and this is true here as well. Both the garden and the museum itself have these displays. What gets your attention, however, is the main hall, which features the double row of concrete tanks (see photo above) that was the hard-working part of the winery. Interactive exhibits stand between the rows, but the real fun begins when you round the corner and enter the first tank.

A video kicks on a you quickly realize that you are actually in the tank as the grapes are loaded in and fermentation takes place over and around you (interrupted by periodic pump-overs). Each of the other tanks presents its own video that explains the vineyard and winery process until you reach the end, which immerses you in the local harvest festival.

This might be the most interesting wine museum we’ve ever visited in the way that all the senses are engaged and linked to both the wines but also local culture and tradition. No wonder so many wine tourists make there way here each year (click here to take a virtual tour right now). Congratulations to the Felix Solis group, one of Spain’s most important wine companies, for creating this small treasure, which seems to tick all the UNWTO boxes so well.

A Monastery with a Michelin Starabadia

A completely different experience at Abadia Retuerta  and its associated hotel LeDomaine, which are located just outside the Ribera del Duero zone (Vega Sicilia is just down the road, so it is a good neighborhood). This is a very ambitious luxury wine tourism project of Swiss pharmaceutical group Novartis. The hotel, with its Michelin-rated Refectorio restaurant, is housed in a restored 12th century monastery, which Spanish friends tell me was in ruins before the project began.

The careful restoration preserved a sense of the place while upgrading amenities (including a spa) to appeal to luxury wine tourists. The chapel feels like what it once was and the cloisters have that quiet sensibility that makes them special. The restaurant is in the old refectory and makes dining there an experience that is about more than food.

Sue and I enjoyed one of the set dinner menus that sought inspiration in local ingredients and traditions. We got very lucky on the wine as the Novartis board had met there the day before and we helped finish off some of the magnums that they had enjoyed with their meal.

It is hard to stop thinking about the hotel and restaurant, but the wine side is special too. The wine tourism experiences are mainly organized around the various old vineyards with e-bike, horseback and 4×4 transportation modes all available.

The total package — vineyards, winery, hotel, restaurant, and spa — is quite spectacular.  A tip of the hat to Novartis for seeing the potential of this place making such an important investment in the wine tourism future of this region.

Compare and Contrast
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We left Abadia del Retuerta and set our gps for Elciego in the Rioja region, stopping along the way in Burgos for lunch and a tour of the famous cathedral. Our destination was Marqués de Riscal, the oldest wine producer in Rioja, and its famous hotel, which rises above the winery at the top of the hill.

The main hotel structure was designed by architect Frank Gehry, all bright colors and unexpected angles. Most of the hotel rooms and the spa are found in a more conventional building adjacent to the Ghery structure and over-looking a vineyard block. It is quite a place and, in a funny way, its sharp contrast with Spanish tradition serves to bring out some of the features of the small village on the other side of the road (especially the church, I think).

Down the hill from the hotel  you find the historic winery, which produces 10 million bottles of wine a year (65% for export) and receives about 80,000 visitors. Wine tourism is well organized here with a large public relations staff and an excellent program that takes visitors from the original 1858 building on through the winery ending at bright and colorful tasting room and gift shop area. The brief video that summarizes the main messages of the winery and tour was one of the best of its type we have seen.

We got a real sense of Rioja wine history at Marqués de Riscal, a winery that lives up very well to the goals of the UNWTO wine tourism initiative. It promotes wine, but does much more, creating jobs in the hospitality industry, drawing attention to the region, its culture and history. That’s what wine tourism today is all about.

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Thanks to Susana and FEV for inviting us to Spain and to everyone who welcomed us to Pago del Rey, Abadia del Retuerta, and Marqués de Riscal. Come back next week for three more case studies of wine tourism in Spain.

How Will Brexit Impact World Wine Markets? A Dismal New Forecast

brexitMy remarks at the Unified Wine and Grape Symposium‘s “State of the Industry” session earlier this year focused on the uncertainty surrounding Brexit (Britain’s choice to exit the European Union) and the great potential it has to damage wine markets in both the UK and other countries.

I called Brexit a “known unknown” because we know (or should realize) that we really don’t know what Brexit will look like when the two-year exit process concludes or what its impact will be when the dust finally clears.

The exit negotiations will begin in earnest after the June 8 elections in the UK, which Prime Minister Theresa May and her Tory party are expected to win although perhaps not by as big a margin as originally conceived.

An Inconvenient Truth

One particular problem for the wine industry is that wine isn’t very important to the overall British economy (so don’t expect it to get much special attention in the trade negotiations), but the British market is extremely important to the global wine industry, both as a major importer and a bottling and distribution center.  The UK market is a top target for many wine exporters, including Australia, New Zealand, Chile, and even the United States.

Kym Anderson (University of Adelaide) and Glyn Wittwer (Victoria University, Melbourne) have taken a first stab at understanding what is at stake in a study that they released earlier this month titled “Will Brexit Harm UK and Global Wine Markets? (pdf). Anderson and Wittwer ran three Brexit scenarios through their econometric model of the global wine market and reported the results.  I encourage you to take the time to study their research.

Major Impact on Wine

Anderson and Wittwer’s conclusion, to cut to the chase, are that there would be substantial Brexit impact on UK wine imports:

In our ‘large’ Brexit scenario, as compared with the initial baseline scenario, the consumer price of wine in 2025 would be 22% higher in the UK in local currency terms (20% because of real depreciation of the pound, 4% because of the new tariffs on EU, Chilean and South African wines, and -2% because of slower UK income growth). The volume of UK wine consumption would be 28% lower (16% because of slower UK economic growth, 7% because of real depreciation of the pound, and 5% because of the new tariffs). Super-premium still wine sales would be the most affected, dropping by two-fifths, while sparkling and commercial wines would drop by a little less than a quarter.

The authors examine three Brexit scenarios, judging that the most likely general outcome (the “large” Brexit model) is that the UK would adopt the same tariff barriers as the EU27 in the short run and then work eventually to restore free trade arrangements with Chile and South Africa. This makes sense to me if for no other reason than that Britain lacks the time and staff necessary to negotiate Brexit and to work out its own detailed tariff regime and also to negotiate detailed free trade agreements to replace those that will be lost.

Losers and Winners?

Brexit will obviously have high costs for UK wine consumers and retailers and for the bottling and distribution industries as well. Who will suffer the most among countries that export wine to the UK?

Australia, New Zealand, and the US will have to deal with the negative income growth rate effects of Brexit and the exchange rate impacts, too, but won’t see an increase in tariff rates under the “large” Brexit scenario, since their exports to the UK are already subject to EU rates. They will gain a little form a more level playing field with respect to European wine producers in the UK market.

Chile and South Africa are more vulnerable to Brexit woes because they currently have preferential access to the EU (and thus British) market. Their wine exports to the UK will be subject to tariff at least until they can reach new free trade agreements.

European wine exports (France, Italy, Spain and others) previously had tariff-free access to the UK market and so will face new barriers to trade. But, as Anderson and Wittwer note, the likely tariff rate of 13 pence per liter is dwarfed by Britain’s domestic excise tax of nearly £3 per liter and 20% VAT.

No Rising Tide

Does anyone win in this analysis of Brexit? Well you would think that the small but growing UK wine industry would gain from the various hurdles that imported wine faces — and they will. But Brexit is also likely to make imported winemaking and vineyard equipment and supplies more expensive and restrict or increase the cost of migrant seasonal labor, so it is unclear if Brexit will be truly beneficial.

And of course the declining overall wine market is bad news — the opposite of the idea that a rising tide raises all ships, if you see what I mean.

The devil is in the details of scenario forecasts like this and we won’t really know what to expect until the May government announces its intentions (and even then we might not know because the government has developed a recent habit of reversing itself on economic policies and, of course, the final outcome depends on the EU negotiating stance, too). Until then, however, this forecast is a very good place to start your thinking.

This column is just a summary of the new research with a few thoughts of my own. I encourage you to read the Anderson-Wittwer paper and note your own thoughts and reactions in the Comments section below.

Can Sherry Be the Next Big Thing?

tioCan Sherry be the “Next Big Thing” in wine? I know what you are thinking. Sherry? C’mon! That’ll never catch fire in a big way. And you may be right, but give me a chance to make my case before you close the door on the Sherry cabinet.

One of the things that Sue and I wanted to do during our recent visit to Spain was learn more about Sherry. But the itinerary seemed to work against that. No time to jet south to Jerez de la Frontera in Andaluca, Sherry’s home. We would have to piece together our education in other wine regions. With a little luck and some helpful friends, we managed quite well.

Stumbling on Sherry in Madrid

Madrid is a long way from Jerez, but we found Sherry all around us, suggesting just how much it is a part of Spanish culture. Walking the aisles of the historic San Miguel market near the Plaza Mayor, for example, we stumbled upon a market stall called The Sherry Corner where dozens of different wines were offered by the glass at bargain prices. We had fun trying new Sherry wines and revisiting old favorites.

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The Sherry Corner offers a fun self-guided audio tour of Sherry wines. For €30 you get six glasses of different Sherries in a special carrier, coupons for six matching tapas from various market stalls, and an audio program available in six languages. It is quite a bargain when you do the math and it lets you both get to know the wines, experiment with pairings, and take advantage of the amazing tapas on offer at the market.

We found a completely different experience at the restaurant Zahara de Osborne in the Plaza Santa Ana, which was close by our hotel. The restaurant is owned by the Osborne wine group that is famous for its Sherry wines (you can see the Osborne bull staring down from hilltops all around Spain).

The idea of the restaurant was to bring the food and culture of Andaluca to Madrid. We challenged our waiter to create that experience for us and he did a great job choosing the dishes and helping us with pairings. Gosh, the Fino was delicious with a delicately fried whole fish!

Indigenous Sherry Culture

Not that Madrid does not have its own indigenous Sherry culture. There are Sherry bars in several parts of the city. Friends guided us to one called La Venencia, where the Sherry is served en rama, fresh and unfiltered, right from the barrel, which is a style I like a lot. My university colleague Harry uses La Venencia as his office when he is in Madrid (which is a lot) and he made introductions to José and Gabriel who worked the bar that day.

La Venencia has as much depth and character as the wines that are served there.  If you have any pre-conceptions, you must check them at the door and accept the bar for what it is, which is true of Sherry wines, too. And then, well, it is a complete pleasure. Sherry really isn’t like anything else you will ever drink and La Venencia is just the same.

I have seldom been anywhere that was so totally itself and I will always associate that strong impression with the dry Manzanilla Sherry wines we enjoyed at La Venecia.osborne

A Little Help from our Friends

We got a little help from friends at Osborne and Gonzalez Byass wineries in our quest to learn more about Sherry. Santiago Salinas arranged for a tasting of Rare Old Sherries when we visited Osborne’s Montecilla winery in Rioja. These were wines for philosophers and poets. It is stunning to discover what great Sherries can become with time. We were inspired by Santiago’s passion for the wines and, of course, by the wines themselves.

Our visit to Finca Constancia near Toledo was organized around a rather extravagant seminar and tasting of Gonzalez Byass wines ranging from their signature Fino, Tio Pepe, on to a special Tio Pepe en rama bottling, and then carefully and thoroughly all the way through the line-up to the sweet, concentrated Pedro Xeménez.

Marina Garcia, our guide on this Sherry tour, was not afraid to draw out the complexities of the wines, which is great. As I told my audience at the General Assembly, sometimes complicated things need to be understood in complicated ways. Our favorite? We discovered the Palo Cortado Sherry style and it made us think. I love it when a wine does that.

Sherry doesn’t have to complicated … or sweet either, for that matter, although many people put the wines in that category. A chilled bottle of very dry fino or Manzanilla is pretty pure pleasure and will change many minds. But you’ve got to try it yourself to be persuaded and that’s a  challenge.constancia

Sherry’s Moment?

If you look at the fundamentals, it is easy to conclude that this could be Sherry’s moment. The wines are great and well-priced. They come in a range of styles that variously make great aperitifs, pair well with food, or help unleash that inner poet. Apparently Sherry works really well as a cocktail base, too. Gotta check that out.

Tourism in Spain is on the rise and Spain’s tapas culture cuisine, which matches up so well with dry Sherry, is increasingly popular. Sherry, as much as any wine I know, is a product of time and place, and wears its authenticity proudly.  Authentic, affordable, food-friendly. Aren’t these the things that wine drinkers are looking for today?

Sherry’s burden is its reputation as that sweet old wine that grandma drinks. There is so much more to Sherry for those who pull the cork. If enough curious wine drinkers pull enough corks, perhaps Sherry’s “Next Big Thing” potential can be realized!

Is Sherry going to be the next big thing? Probably not. But it doesn’t have to be. It is a timeless wine waiting to be re-discovered by a new generation of wine drinkers.

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Thanks to everyone who helped us with our Sherry research. Special thanks to Susana, Mauricio, Marina, Santiago, George, Cesar, Greg, Harry, Jensen, Gabriel, and José. Thanks to Sue for these photos of the big Tio Pepe sign in Madrid’s Puerta del Sol, the menu at The Sherry Corner, the rare old Osborne Sherries, and the many hues of the Gonzalez Byass Sherry wines.

Questioning the Conventional Wisdom About the Spanish Wine Industry

riscalThe conventional wisdom is that Spain is an Old World wine country (along with France, Italy, Portugal, etc.) and it is easy to see why. First there is geography. Old World = Europe. QED. End of discussion.

Old World Wine

Then there is the matter of wine culture. One of the characteristics of Old World wine countries is that their per capita consumption levels, once very high, have been falling for decades. Spain’s per capita consumption today is less than 20 liters per person, for example, but was more than 100 liters a head in the 1890s and more than 60 liters per capita as recently as the 1980s.

Finally there is the obvious factor of age. Wine has been made in Spain for a very long time. It was hard not to think “Old World” when we were in the Toro region, for example, to visit Pagos del Rey winery. Gnarly goblet-trained Tinto de Toro vines (the local Tempranillo variety) looked as old as centuries and some of them really were since phylloxera never invaded these vineyards. At the winery we were served “young wines” made with grapes from”only” 70 year old vines. Vines as old as 130+ years provided grapes for the senior wines. Amazing.

Confusing the Issue

John Kenneth Galbraith famously argued that the conventional wisdom is always wrong and there is something to be said for that in this case if we think of Spain in terms of its wine industry instead of its location, wine culture or aged vines.

One of most interesting stops on our recent tour of Spanish wine regions, for example, was at Marqués de Riscal in Elciego.  This is one of the oldest wineries in the Rioja region, although you might not realize it as you approach town, your eyes distracted by the post-modern Frank Gehry-designed winery hotel that sits on the hill above the historic cellars. Fantastic.

The winery was founded in 1858, which makes it old, but not much older than the “New World” Charles Krug winery in Napa Valley, which dates from 1861. Wine is much older in Spain than California, but the wine industry perhaps not as much.

Pagos del Rey, for example, is part of the prominent Felix Solis group, one of Spain’s most important wine producers. Their inspiring true story of how a mom and pop wine operation grew to grand dimensions reminded me of the Gallo family in the United States. But Gallo is actually older — starting out in the post-prohibition 1930s — while Felix Solis’ roots date to the 1950s.

It’s a New World After All

The modern Spanish wine industry is relatively young (much  younger than those Toro grape vines). Some might argue it was re-born in 1986, when Spain entered what is now the European Union, and began to compete head-on with wine from France and Italy. Competitive pressures, plus EU wine market reforms and adjustment aid, helped Spain’s wine industry reinvent itself for the 21st century.

The result is in some respects a New World wine industry in the Old World.  Spain is not unique in this, but it is a very good example of the successful transformation of the wine sector.  Bodega Finca Constancia in Otero is a perfect illustration of where this path has led. Founded in 2001 by the Gonzalez Byass group, it features beautiful vineyards (including several experimental blocks developed along with a university research team) and a state of the art winery that hugs the ridge line, blending into the landscape.

The wines at Finca Constacia are impressive, deftly balancing tradition and transformation. We saw several examples of this fusion during our time in Spain.  Bodegas y Viñedos Viña MayorGrupo MatarromeraBodegas Manzanos, Torres, and Campo Viejo were particularly striking, each in its own way. And the wines in all these cases display that special quality that we often call “authenticity” today, although I prefer “integrity.” (Why? Long story — I will save it for another time and place.)

Conventional Wisdom Risks

The conventional wisdom sees the adoption of international styles and techniques as the way forward, or at least one important path, and I think this is correct, which is one reason I am so optimistic about Spain’s wine fortunes. But I think it is possible to go too far in pursuit of wines that will seem familiar to global market consumers — so I urge due caution.

A few years ago I was invited to participate in a seminar on Spanish wines in the U.S. It was a great experience and I learned a lot, but there was one rather shocking thing that happened that is relevant here. At the end of the first day some of the local sommeliers went out to dinner with our seminar leader and a six pack of Spanish wines from various regions and varieties, all made in an international style (stainless steel, a bit of new oak, etc.)

They returned the next morning and were more than a little subdued. It seems that they had played that “blind tasting” guessing game with the wines and, well, they really couldn’t tell them apart, even with a little cheating. The producer of the wines, it seems, had sacrificed integrity for marketability through international style.

They were nice wines — you  wouldn’t hesitate to drink them —  but it was hard to see why you would choose them over other wines on the market. It is important to make wines for today’s consumer, but not to forget the old world qualities that make them special.1982

Old World Revisited

Santiago Salinas made the argument in a different way when we visited him at Bodegas Montecillo, which is part of the Osborne wine group.  Santiago had arranged a tasting of his Gran Reserva Seleción Especial wines from the 1975, 1982, 1999, and 2001 vintages (1982 was a stellar year in Rioja and we tasted it from a magnum, so this was a treat).

He wanted us to see Rioja’s history by tasting wines made when blending of grape varieties was more important than it is at some houses today and before the impact of climate change was so strong. The wines were more subtle and elegant when, after some years in barrel and bottle, they were finally released, Santiago suggested.

The old wines were wonderful the way that old Burgundy can be wonderful and Santiago’s point was clearly made. Hopefully today’s wines will taste this good when they are thirty or forty years old, but maybe they won’t. Maybe we will find that something has been lost along the way and so perhaps we should be working hard to prevent that.

I am not one who thinks the the most important quality of a wine is its ability to age well, but a tasting like this provides valuable context and a warning not to push the conventional wisdom further than is wise.

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Special thanks to Santiago Salinas and Marina Garcia for their hospitality.

Sketches of Spain: Spanish Wine Industry Challenges and Opportunities

davissketc_0809_1_1204852187Sketches of Spain is the title of the 1960 Miles Davis/Gil Evans album that deftly walks the line between classical and jazz genres, with Davis’s virtuosity shining throughout. Scroll down to the bottom of this column if you’ve never heard this great recording.

Sue and I have recently returned from a visit to Spain, where I spoke at the General Assembly of the Spanish Wine Federation (Federación Española del Vino or FEV), so Spain and Spanish wine are on my mind and I have been puzzling over how to write about our experiences and all that we learned. Such a big country! So many impressions! The Miles Davis album solved the puzzle.

Davis and Evans gave us a few powerful sketches of Spain and its music, not a detailed musical portrait, which would be impossible in the context of a ’60s-era 33-rpm vinyl recording. A perfect choice! In this and the next several weekly columns I will try to provide sketches of the Spanish wine industry, which I hope you will find useful, leaving a more detailed portrait for another time and place.

Sketch 1: The Spanish Wine Supertanker

They say that it is not easy to turn around a big ship because of all the momentum it has to continue on its path and this might be a good metaphor for Spain. Spain is certain big when it comes to wine. Spain has the largest area of vineyards of any country in the world and is the third largest wine-producing nation (after Italy and France). Spain produces nearly 70 percent more wine by volume than the United States, which is number four in the global wine table.

The Spanish wine industry has devoted enormous effort to changing wine market direction, investing in more productive vineyards planted to grape varieties like Tempranillo that are more attractive to global wine buyers, and in new or updated production facilities.

The wineries we visited have made the transition and are now sailing in the right direction. As I said to the General Assembly audience, it seems to me that Spain has all the pieces in place to succeed in the new global wine market environment that has emerged, where value matters much more than sheer volume. I am an optimist about Spanish wine. But I am also a realist …

Sketch 2: Breaking the Glass CeilingFEV2

Improving Spanish wine is one thing (a good thing!), but achieving greater success in the global market is another because of reputational momentum.  Spain’s wine reputation has not caught up with its reality in many markets. Citing data from a Nielsen Company survey of U.S. on-premises wine drinkers (thanks to Danny Brager for his help), I noted that Spain was stuck under a “glass ceiling” in terms of consumer perception.

Italy and France — these are the countries that American diners think of first when they consider imported wines. Spain, despite its status as the third largest producer, ranks far below with perception roughly on a par with Australia, Argentina, and Chile and only a bit above tiny New Zealand, which is number 14 on the world wine production table, lodged between Romania and Hungary.

Spanish producers would love to break through the glass ceiling to achieve market status of Italy and France, but — let’s face it — everyone wants to do that.

A more interesting question for Spain, I proposed, is why it does not rank higher above Argentina, Chile, and New Zealand. Do they make more wine than Spain? Better wine? Do they have better generic market promotion programs? The answer is no in each case. What do these much smaller countries have that Spain does not that allows them to punch so far above their weight? This got my audience thinking, which is always my intent.

Sketch 3: Spain at the Crossroads

Hard thinking is necessary because Spain’s wine industry is at a cross roads of sorts. A graph of domestic vs export sales of Spanish wine shows that an important line has been crossed. Domestic wine consumption continues to fall in Spain as in other Old World producer countries. The opponent is not so much France and Italy as spirits and beer and changing consumer habits generally.

Wine exports are rising and now exceed domestic sales. This is important since the industry would be in crisis if exports did not replace lost domestic purchases, but that doesn’t mean that slowly losing your most biggest market is not a cause for concern. It was rare for us to meet a wine producer in Spain who had as much as 50 percent domestic sales.

Global markets are congested and competition for high value sales will only increase when Brexit’s full impacts are finally felt.  Reversing the decline of the domestic wine market is Spain’s next big challenge.

Fortunately, I think there is an realistic opportunity for domestic wine sales growth. Spain was hit very hard by global financial crisis and the austerity policies that followed in Europe. Only now, ten years after the crisis, is Spain’s gross domestic product approaching its pre-crisis level. A lost decade! No wonder exports have been the focus.

But growth has picked up in the Spanish economy and optimism is in the air, something Sue and I could feel on the streets of big cities and small towns alike. Beer is a tough opponent, but perhaps this is Spanish wine’s moment at home as well as abroad! More to follow in the weeks ahead.

Thank You Notes

Sue and I would like to send out big “thank you” notes to Pau, Susana, José Luis and Eduardo and everyone else at FEV and to all the people we met at the General Assembly in Valladolid.

FEV organized a series of winery visits for us in the two weeks following the General Assembly (I will report on this fieldwork in future columns) and we would like to thank everyone who took the time to meet with us and share their stories. Here is a list of the wineries we visited:

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The Wine Economist will pause next week so that we can travel to Cyprus where I am giving a seminar on regional wine reputation and we are visiting wineries, and attending the annual Cyprus wine competition. Come back in two weeks for more sketches of the Spanish wine industry. In the mean time, here’s the original recording of Sketches of Spain. Enjoy!