Ask Gerald Weisl about Spanish wine, and the long-time San Francisco Bay Area retailer offers the same answer that he has offered for years.
“With so many Californian wineries abandoning comfortable price points, Spain provides consumers a great alternative,” says Weisl, who owns Weimax Wines & Spirits. “That’s why we sell so many good Spanish wines.”
Which, in a nutshell, may be well describe Spanish wine’s strengths, as well as its challenges, in the US these days. Yes, there is high quality. Yes, there are brands and regions that consumers know and feel comfortable with. And, yes, prices remain competitive, among the most competitive in Europe.
Why sales are plummeting in the US market
So why are Spain’s sales down in the US, in both volume and dollars? Some of that is more about wine’s troubles in the US than about Spain. But talk to many who specialise in Spanish wine, be they retailers, importers, or wholesalers, and there is almost an unease about what’s going on.
That consumer familiarity may be less of an advantage than it used to be, because selling yet another bottle of Rioja may not make much difference to the category in the long run. And pricing, once such a great advantage? These days, with consumers buying fewer, but more expensive bottles, some say too much cheaper Spanish wine is poorly made and of declining interest to US buyers, who are focused on wine costing $15 and more — the current US pricing sweet spot.
Spanish wine, historically, has to be a value and has to be a great deal to be considered.
Spanish wine may not be at a crossroads in the US, and it remains an important category that does hundreds of millions of dollars’ worth of business each year.
But, say many of those interviewed for this article, it’s almost certainly facing hurdles that it hasn’t faced in a good long while.
“Spanish wine, historically, has to be a value and has to be a great deal to be considered,” says Fellipe Silva, the Iberian portfolio manager for California’s Chambers & Chambers Wine Merchants. “But if you look at its pricing, $10.99 to $12.99, that’s a conflicted price point. So maybe Spanish wine has to try and move in a different direction. At least that’s my opinion.”
Spanish wines by the numbers
Spanish wine exports to the US declined 8% from 2021 to 2022 in volume and 3.7% in dollars, according to the Wines from Spain trade group. Though 2021 sales were the highest since 2017, thanks to the post-Covid recovery, and which might make the comparison seem worse than it could be, both volume and dollar numbers have been treading water since that time, save for the 2021 outlier.
Sales are stable, but volume is down because of what happened over the past several years.
“Sales are stable, but volume is down because of what happened over the past several years,” says Silva.
Overall, Spain is the eighth biggest exporter to the US by volume, sandwiched between Argentina and South Africa, and fourth in dollars, between New Zealand and Australia.
Its best-selling wines in the US remain what they have always been – Cava and Rioja, say the Wines of Spain numbers. The sparkling accounted for a bit more than one-third of all exports with Rioja almost a quarter of exports in 2022. Not surprisingly, sales figures from the 15-store Bottle King chain in New Jersey, show seven of the 13 best-selling Spanish still wines this year are from Rioja — and the list includes four Sangrias. Almost all of the those are less than $20, and there is only one white wine among that group.
None of this is a surprise to Phil Ward, who works for Bottle King has and has also been an importer and a distributor. He says his customers – often upper-middle class – see Spanish wine as a value buy compared to the rest of Europe, and especially to France. They’re buying Spain the way they’ve always bought it, he says, because it offers more bang for the buck.
Internal and external influences
The reasons for all of the sales confusion are many. They start with the pre-Pandemic Trump wine tariff, which added 25% to the cost of many Spanish wines and clobbered sales in the US They include the Pandemic and the toll it took on the Spanish wine business, as well as the supply chain challenges as the Pandemic ended.
In addition, several important Spanish wine regions are facing their own troubles, including disputes and legal challenges among growers and producers in Rioja and Ribera and several well-regarded Cava producers leaving the appellation over its direction and future.
“There are just a lot of problems,” says Kat Thomas, who oversees the wine program for Ada’s Food + Wine in Las Vegas and makes a special effort to bring new and different Spanish wines to her list. “And that’s more than the pricing issue. It’s difficult for a lot of producers to change, so they don’t even try. They don’t want to be out of their comfort zone.”
The various internal disputes center around tradition. Should they keep making and marketing wine the traditional way, with higher volumes to offset lower margins, or to change and consider styles and winemaking approaches that don’t revolve around oak age or specific appellation requirements – and where the wine costs more money.
Making changes to Spain’s image
In one respect, this shouldn’t much matter to consumers. Save for the trade and the Spanish wine geek, who cares about Spanish DO wrangling? But Dan Fredman, a California wine marketer who has worked with Spanish producers, compares this – and specifically in Ribera – to what happened in Tuscany and how the birth of the Super Tuscan changed the market for inexpensive Italian wine, especially Chianti.
“In Tuscany in the 1980s, the DO regulations forced winemakers to make wine that wasn’t as good as it should have been, so they said ‘screw it’ and created the Super Tuscans that allowed them to put whatever the hell kind of grapes they wanted into the bottle,” says Fredman. “The same thing is happening in Spain, at least in Ribera. The winemakers realized that they could make pretty good wines if they didn’t have to age them for three to four years in cask and then more time in barrel.”
Fruitier, more intriguing wines – with higher margins.
The result, he says, has been fruitier, more intriguing wines – and with higher margins: “They had their own Super Tuscan wines that the public loved and were willing to pay more for than the traditional Cosecha.”
There have also been attempts in Rias Baixas with Albarino and Bierzo with Mencia to move away from less expensive wines to higher quality products that would appeal to the new American wine demographic. In Rias Baixas, says Silva, quality has improved markedly as a variety of producers moved away from wines costing less than $15 to those costing $20 to $25, and he sees these wines successfully competing against similarly-priced wines from other countries in California.
It’s about the producers making wines that they’re comfortable with, and not the wine that they’re ‘supposed’ to make.
Thomas sees the beginning of the same process in Bierzo, with the caveat that the region and its grape aren’t as well-known as Rias Baixa and Albariño and that there is less wine available for the export market. “It’s about the producers making wines that they’re comfortable with,” she says, “and not the wine that they’re ‘supposed’ to make.”
Cautious optimism
Not everyone is as worried. André Tamers, the founder of North Carolina’s De Maison Selections, which imports Spanish and French wine, says “it’s the most exciting part of the wine business today,” and he cites enthusiasm for wines from Rioja, Galicia, the Basque country, and Grenache-based wines from the Madrid region.
His take: That it’s more an issue about education and getting these wines in front of sommeliers and retailers than anything else – to stop pigeonholing Spain as only about being value but to realise it’s about quality as well. There are opportunities to sell unique and intriguing wines like those made from the Basque grape Txakoli, and that it’s both difficult to pronounce and spell Txakoli isn’t necessarily a problem.
Which may be just one more challenge that Spanish wine has to face.
