Key market studies of the sector, presented in May at the Consejo Regulador, corroborate the strategy of generating value in the Denomination.
– Rioja shows significant growth in value in the domestic market, particularly in the Hotel, Restaurant and Catering (HORECA) sector (+8.3%).
– 3 in 10 bottles of exported Spanish D.O. wines are from Rioja. The appellation is gaining ground in markets such as Belgium, Ireland, Norway, Mexico and Canada.
– Rioja’s first wine tourism study shows that in 2018, there were 810,000 visits to wineries in the region, confirming Rioja’s importance as an enotourism destination.
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The Consejo Regulador of the DOCa Rioja has published the findings of studies carried out by Nielsen and the Spanish Wine Market Observatory on Rioja’s positioning both domestically and abroad, as well as a further pioneering report, undertaken by consultants Akimy and Dinamiza, which looked at the enotourism sector of the region.
Spain
The conclusions of these studies reveal that, overall, 2018 was not a good year for wine sales in Spain, where the D.O. share fell by 0.5%. In this context, Rioja sales were not positive, as the Consejo Regulador announced in its annual balance sheet for February. The effects of a complicated 2017 harvest, along with inclement weather which did not encourage consumption in 2018, had a negative impact on sales with a decline of 3.9%, according to Nielsen data.
However, the same report shows a new and significant increase in value. It is worth highlighting that the most significant growth was seen in the HORECA sector where Rioja is growing (+8.3%) faster than the D.O. wine category (+7.6), thus improving value share.
A large part of Rioja’s positive performance in value is due to the upward curve in white wine sales, which, despite a slowdown in 2018, increased its share in the hospitality sector by a tenth and now stands at 5%.
Rioja’s aged wines also experienced an upward growth in terms of value in the HORECA sector with an increase in the Crianza (77.1%) and Reserva and Gran Reserva (67.5%) categories.
The president of the Consejo Regulador, Fernando Salamero, stresses “the importance of this growth in value, recalling that this is part of Rioja’s strategic plan and a priority objective for the region’s growth”.
The channel with the most significant drop in D.O. wine sales is the food and drink retail market (- 1.1%), where smaller appellations which compete on price points are maintaining their positions better, resulting in a relative loss of volume share for Rioja.
The report concludes by stating that Rioja accounts for 37% of sales of D.O. wines in Spain. Three in 10 bottles of quality wines consumed in Spain are from Rioja, a figure that rises to eight in 10 in the HORECA sector, which is significant when considering the higher value of wines, such as the aged reds which are consumed in the hospitality sector.
“The situation in Rioja is one of balance and we are in a strong enough position to be able to face the next fiscal year with peace of mind. Our marketing department is working to recover Rioja’s position in the food and drink retail sector. To this end, the promotional campaign will focus its efforts on reinforcing the value and perception of the Rioja brand, especially among younger consumers and women, communicating in fresh new ways and through different channels”, concludes the President.
According to Ricardo Alcón, Head of Development at Nielsen, “the commitment to value is a key factor in Rioja’s sales strategy as we can see in this year-on-year comparison how, despite the complex market situation this year, Rioja continues to be the main driver of value increase in the D.O. wine category”.
Outside Spain
According to customs data presented by the Spanish Wine Market Observatory (OeMv), Rioja DOCa wine exports reached 101.5 million litres in 2018, which represents 31% of Spanish exports of D.O. still wine. In terms of value, this percentage increases to 40%, reaching 480.6 million euros.
It should be noted that the average export price of DOCa Rioja wine is 48% higher than that of other Spanish D.O. wines. The price stands at 4.74 €/litre, which represents a 7% increase compared to the average price recorded in 2017. If compared with the average price per litre of total wine exported by Spain (1.03 €), the differential for wines from the Rioja DOCa rises to 361%.
Looking at sales figures from the 12 key Rioja export markets, Rioja accounts for almost a third of the value in euros of wine sold to these countries across the Spanish still wine category (83% of value and 84% volume). However, 2018 was not the best year for sales in key markets such as the United Kingdom, Germany and Switzerland, where there was a decline in both volume and value, with more moderate falls in the USA, Holland, Sweden and China.
Rioja gained market share in Belgium, where exports grew by 18% both in value and volume, whilst imports of wine in this market grew by 1% in value, losing 3% in volume. Also noteworthy was the positive development of Ireland, with growth of 15% in value and 7% in volume, when overall purchases of packaged wine in this market fell last year. Norway saw growth of 12% in value and 5% in volume, whilst Canada saw an increase of 3% in value and 6% in volume. Sales in Mexico grew 3.1% in value.
Rafael del Rey, General Director of the Spanish Wine Market Observatory Foundation, highlights the importance of “the commitment to strengthening value through price increases and dividing up the portfolio through a sound commercial network and increasing diversification into other growing markets”. In addition, del Rey highlighted “the solidity of the key strategic markets” referring to the United Kingdom “where Rioja maintains an overwhelming 53% of the volume and 64% of the value of wines imported from Spain”.
Wine tourism
Wine tourism is a key strategic focus for the growth and enhancement of Rioja and one that already directly contributes to 800 jobs in Rioja wineries. With this in mind, the Consejo Regulador of the DOCa Rioja has been a pioneer in creating an enotourism study that offers a detailed picture of what enotourism means for the whole of the Designation of Origin.
This innovative study goes much further than existing reference tools in this sector. Not only does it include all the activities currently available on the wine routes, it adds relevant information on non-associated wineries that add value to the region as a whole. The study also collects information from the 185 main wineries that create the basis of the tourism offering in Rioja, which combines quantitative and qualitative aspects, as well as economic significance and comparison with other competing regions.
The most revealing aspect of the study is the fact that 810,476 visits to Rioja wineries were registered in 2018, which shows how the Denomination is leading the way with enotourism in Spain. Despite already being one of the most established enotourism destinations, the report highlights a year on year growth rate of over 12% in recent years, with an increase of over 40% between 2015 and 2018.
The report also shows how visitors to the region are likely to stay longer, and spend more than they would in other destinations; the average stay is 3.21 days and the number of wineries visited amounts to 2.7.
Manuel Romero, director of the consulting firm Dinamiza, believes that the report “provides an insight into the enotourism phenomenon in Rioja DOCa and helps to understand the evolution of the sector, allowing the target audience to be identified and spotting trends in both what’s offered and what’s expected. The tool will allow Rioja wineries to tailor their offerings in order to consolidate their position as a benchmark destination of quality tourism”.
