27/04/2015

1

The Spanish Wine Market:

Where does it go?

Ricardo Sellers-Rubio

Index

I. The Spanish wine industry

Wine in figures: supply and demand

II. Wine marketing in Spain

III. Case study: Bodegas Enrique Mendoza

27/04/2015

2

I. The Spanish wine industry

Vinyards and wine production Wine Industry Wine Exports Domestic market

Vinyards and wine production

• 954.378 Has.(MAGRAMA Nov 2014)

• 41,6 mill. Hltrs.(MAGRAMA Nov 2014)

27/04/2015

3

Wine production (Mill. Hl.)

0

10

20

30

40

50

60

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

30 mill. Hltrs 40 mill. Hltrs

• From the 2014 harvest:– 51.1% will go to red and rose wines– 48.9% will go to white wines

• The most common grape types in Spain are:– Airén (23.5% - W)– Tempranillo (20.9% - R)– Bobal (7.5% - R)– Red Garnacha (R), Monastrell (R), Pardina (W), Macabeo

(W) and Palomino (W).

Wine production

27/04/2015

4

• Firms: +4.500 wineries

• Sales: 6.465,3 mill. Eur.

• Employees: 24.051 pax.

(INE – 2013)

Wine industry

Wine industry

• It is estimated that about 4.500 wineries make stillwines, sparkling wines and liqueur.

• For the most part, these are small businesses, familyowned, while a great number of them are made upof agrarian co-operatives.

• It is also highly concentrated: 5 top companiestogether hold almost 28% of the market.

27/04/2015

5

Major players in this sector:

• Freixenet• J. García Carrión• Codorníu• Arco Wine Invest Group• Grupo Domecq Bodegas• Grupo Miguel Torres• Félix Solís Avantis• Grupo Faustino.

Regulations Governing Wine in Spain:

27/04/2015

6

• 90 PDO:– 67 Denomination of Origin (DO)– 2 Qualified Denomination of Origin (DOCa)– 7 Quality Wine with a Geographical Indication

(“Vino de Calidad”)– 14 Qualified Estate Wine (“Vino de Pago”)

• 41 PGI:– Country wines (“Vino de la Tierra”)

Regulations Governing Wine in Spain:

27/04/2015

7

Winery 8

Winery 7

Winery 5

Winery 4

Winery 2

Winery 3

Winery 9

MARKET

Winery 1

P.D.O.

P.D.O.

P.G.I.

Winery 6

J. García Carrión: Pata Negra(PDO: Rioja, Rueda, Ribera del Duero, Valdepeñas and

Cava)

27/04/2015

8

Wine of theyear XXX

“Cosechero”

Crianza Reserva GranReserva

Regulations Governing Wine in Spain:

Ageing Total Months(minimum)

OakContainers(max. 330 lts)

CrianzaWhite and Rosé 18 6

Red 24 6

ReservaWhite and Rosé 18 6

Red 36 12

GranReserva

White and Rosé 48 6

Red 60 18

Regulations Governing Wine in Spain:

27/04/2015

9

Wine exports

• Firms: 3.897 wineries• Volume: 22,43 mill. Hl.• Value: 2.518 mill. Eur.• Price: 1,15 €/l

(AEAT – 2014)

0

5

10

15

20

25

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Exports

1.244 mill. €

2.548 mill. €

Wine exports (Mill. Hl.)

27/04/2015

10

• Europe: 1.755,5 mill. Eur. (69,7%)– UE (1.567,1 mill. Eur.): Germany, UK and France.

• America: 431,7 mill. Eur.– USA

• Asia: 212,8 mill. Eur.– China

• Africa: 90,7 mill. Eur.• Australia and NZ: 15,2 mill. Eur.

Wine exports

Domestic market

• Value: 2.455,3 mill. Eur.• Volume: 9,48 mill. Hl.• Price: 2,59 €/ltr.• ±18 ltrs./person

(MAGRAMA - 2014)

27/04/2015

11

0

5

10

15

20

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Domestic

Domestic market (Mill. Hl.)

2.455 mill. €

0

5

10

15

20

25

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Exports Domestic

Wine exports & Domestic market

2.548 mill. €

2.455 mill. €

27/04/2015

12

0

2

4

6

8

10

12

14

16

18

20

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Home HORECA Direct

Domestic market (by distribution channel)

• The domestic consumptionof wine in Spain shows

worrying figures.• It is estimated 18 litres per

person per year.

Why do the Spanish drink so little wine?

Domestic market

27/04/2015

13

Reasons for not drinking wine

• “I don’t know about wine”• “I don’t understand the wine vocabulary”• “Wine is expensive (specially in restaurants)”• “My parents drink wine”• “Wine is old fashioned”• “Drinking wine is not cool”

Qualitative research (UA – 2013)

II. Wine Marketing in Spain

27/04/2015

14

Wine Marketing

“Success is NOT making great wine!

It is making wine and selling it at a

great profit”.

Paul Wagner(Balzac)

Bottle Red: 4,70 cts

Bottle White: 4,15 cts

PRODUCT

PRICEPROMOTION

PLACEMarketing – Mix

Strategy

27/04/2015

15

Intrinsic attributes:

Extrinsic attributes:

Wine Marketing: The product

Organoleptic properties: Grape Alcohol volume Year Flavour Etc.

Packaging Brand/LabelWinery PDO Etc.

WINEOrganoleptic Characteristics

GrapeAlcohol volume

YearFlavour

etc.

Bottle

Label

Back-Label

Winery

PDO

Brand

Packaging

Cork

Services Credit

PromotionLogistic-Delivery

27/04/2015

16

Bodegas Bocopa(PDO Alicante)

"con tan sólo 50kilocalorías por copa“

"igual que unamanzana“

"cuida tu salud desdedentro“

"con antioxidantes yaminoácidos naturales"

Bodegas Valduero: 9 Sobresaliente(PDO Ribera del Duero)

27/04/2015

17

Wine Marketing: The packaging

Celler del Roure: Setze Gallets(PDO Valencia)

5 euros / bottle of 750 ml

16 euros / pack (4 bricks of 750ml.)

27/04/2015

18

Bodega San Ginés: Campos de Benítez(Without PDO)

27/04/2015

19

Bodegas Protos(PDO Rueda)

Bodegas Canopy(PDO Mentrida)

27/04/2015

20

Azpilicueta(PDO Rioja)

1. Clasical approach

2. Artisan/Natural approach

3. Modern approach

Rouzet and Seguin (2004)

Wine Marketing: The brand/label

27/04/2015

21

1. Clasical approach.

Wine Marketing: The brand/label

2. Artisan/Natural approach

Wine Marketing: The brand/label

27/04/2015

22

3. Modern approach.

Wine Marketing: The brand/label

3. Modern approach.

Wine Marketing: The brand/label

27/04/2015

23

3. Modern approach.

Wine Marketing: The brand/label

Bodega Matsu (Vintae Group)(PDO Toro)

27/04/2015

24

27/04/2015

25

+18%

sales

Heretat de Cesilia: Lizana(PDO Alicante)

Cingles Blaus: Auri(PDO Montsant)

27/04/2015

26

Cingles Blaus(PDO Montsant)

27/04/2015

27

Beso de Vino (PDO Cariñena)

27/04/2015

28

When it tells a story…

Wine Marketing: The brand/label

27/04/2015

29

Wine Marketing: Branding

27/04/2015

30

Berberana(PDO Rioja)

La Rioja Alta (PDO Rioja)

27/04/2015

31

Promotion

27/04/2015

32

27/04/2015

33

27/04/2015

34

Diversification

27/04/2015

35

Diversification

Thank You!!

Ricardo.Sellers@ua.es

@mkalicante

www.marketingandwine.com

www.linkedin.com/pub/ricardo-sellers-rubio/65/848/7ab

Ricardo Sellers-Rubio