A study of Spain’s top five wine companies reveals many common themes. The first observation is that family ownership dominates, with some of these industry leaders having a number of generations behind them. This can make a clear picture regarding turnover a little difficult to obtain: most of the companies featured have provided their own figures.
Expansion has been the order of the day over recent decades, allowing these companies to remain at the top of the league and, in particular, build export sales. Indeed, against a backdrop of a domestic market which offers fewer opportunities for growth due to the economic crisis, export is being given increasing importance across the board and developing markets are being keenly eyed and not just by these companies but by the wider Spanish wine industry. Exports account for over 40% of sales in the case of every company profiled here, and significantly more in some cases.
The top five companies are well prepared for further growth in terms of their offering as there has been a general trend to develop a portfolio of wines from key DO regions including, of course, an all-important Rioja brand.
There is another noticeable trend: companies that traditionally focused on sparkling wine have expanded into still wines, while the reverse is also the case. Indeed, with sparkling wines enjoying good growth worldwide, many Spanish groups – including those here and other prominent groups – have invested in a Cava brand or may be about to do so.
If there is one potential obstacle to growth in the coming years it has to be supply. After two short harvests, Spain’s wine supply isn’t as plentiful as it has been in recent times. However, producers focusing on smaller volumes of higher-priced wines are somewhat better placed.
Grupo Freixenet
Ownership: Family-owned
CEO: Pedro Ferrer
Turnover: €520m
Exports: 80%
Production: Freixenet owns wineries in a number of Spanish DO regions, including Solar Viejo in Rioja, Valdubón in Ribera del Duero and Morlanda in Priorat in addition to its Cava business which spans three brands: Freixenet, Segura Viudas and Castellblanch. The company has also built up a portfolio of wineries overseas comprising: Gloria Ferrer in California; Finca Ferrer in Mendoza, Argentina; Yvon Mau in Bordeaux, France; and the Wingara Wine Group in Australia.
Freixenet can trace its history back to 1861 in Catalonia. Two longstanding families – the Ferrers and the Salas – were largely responsible for laying the foundations of a company that is today one of the world’s leading producers of traditional method sparkling wines. The Freixenet brand was established in 1915, and by 1920 the first shipments were making their way overseas. From 1970 onwards, one product – Cordon Negro – spearheaded development. The Cava’s iconic black bottle gradually built Freixenet into a major force in sparkling wine worldwide.
In the latter part of the twentieth century, Freixenet moved beyond its traditional heartland of Catalonia, establishing a portfolio of still wines in key Spanish regions and abroad. José Ferrer also established Gloria Ferrer in California in 1986, a winery dedicated to premium sparkling wine, as a tribute to his wife.
Another notable milestone was the acquisition of the Bordeaux négociant Yvon Mau in 2001, which has given the company a significant presence in France, and in the Bordeaux category. A few years later, Freixenet joined the ranks of foreign investors in Argentina where the company established Finca Ferrer in Mendoza. Nevertheless Cava still accounts for the lion’s share of business: by 2010, the company’s total Cava production reached 200m bottles.
A contemporary addition to the Cava line-up is Elyssia, two Cavas “to provide the sophisticated consumer with a wine to match their aspirations”, launched in 2010. The duo feature “bold new blends” or cavas featuring both traditional Cava grapes and more recently adopted varieties: Gran Cuvée Brut is a blend of Chardonnay, Macabeo, Parellada and Pinot Noir, while Pinot Noir Brut is made mostly from Pinot Noir with some Trepat (RRP approximately £15.00 [$24.00]). Elyssia reflects a more relaxed approach to grape sourcing – in the past Freixenet was staunchly local-to-local grapes – as well as its strategy of offering higher premium Cavas.
Meanwhile the Freixenet brand, with the emphasis on Cordon Negro, has benefited from a recent “Wonderfully Unexpected” international ad campaign. Aiming to highlight the sparkling wine’s spontaneous appeal and focus on its heritage, the campaign has run in the press, on the Internet, on TV and radio.
Today Freixenet is run by members of the Ferrer family and, with exports accounting for 80% of business, describes itself justifiably as a “truly international” company. Key markets are Germany (4m cases), France (3.3m), Spain (around 3m), with Japan, the US and the UK selling around 1m each. “Export markets have been growing in the past five years, while Spain has been stable due to the economic crisis,” according to the company.
Grupo Codorníu
Ownership: Family-owned
CEO: Javier Pagés
Turnover: €235m ($318m)
Exports: 50%
Production: Ten wineries throughout the world: eight in Spain – Bodegas Bilbaínas in Rioja, Legaris in Ribera del Duero, Raimat in Costers del Segre, Codorníu Cavas, Scala Dei in Priorat, Nuviana in Alto Aragón, Masía Bach in Penedès and Abadía de Poblet in Conca de Barberà. Outside Spain Codorníu has Bodega Septima in Mendoza, Argentina and Artesa in Napa, California. The company has vineyards in all the regions where it operates.
Grupo Codorníu was founded as a family company in 1551 when Jaume Codorníu, a landowner with vineyards and farm equipment, started to produce wine. In 1872, Josep Raventós Fatjó, his descendent, produced the first bottle of Cava. His son Manuel Raventós decided that the winery would devote itself to the production of Cava and ordered the construction of Codorníu’s historic cellars at Sant Sadurní d’Anoia in 1885.
During the twentieth century the business expanded significantly. The development of Raimat, an extensive estate in DO Costers del Segre dedicated to still wines, began in 1914. In 1949, production started at the Rondel winery with the aim of offering traditional method cavas to a younger consumer. There was further expansion with the acquisition of the Bach winery in the 1970s.
The next and most important phase in the company’s history “was motivated by the Raventós family’s desire to locate the Codorníu Group in leading wine regions, both domestically and internationally”. This involved the acquisition and upgrading of existing wineries, such as Bilbaínas in Rioja, and establishing new wineries as in the case of Septima in Mendoza (1999) together with Nurviana and Legaris in Spain in the early years of the new millennium.
Export development and innovation are the mainstays of the company’s strategy.
The group is present in over 100 countries on five continents and has subsidiaries in its key markets. The US is the main export market, representing 20% of exports, followed by the UK with 13% and Central Europe with 8%. The company says that its current export challenge is to “develop the Asian market in three main regions – Southeast Asia, China and Japan – with the aim of achieving double digit growth in the international market.” In recent months this has started to become a reality.
Codorníu says that “innovation is embedded in its origins”. Indeed, the group was the first to make a Cava with international varieties Chardonnay and Pinot Noir, as exemplified by its flagship Anna de Codorníu Cava. In 2010, Codorníu rolled out Reina María Cristina Blanc de Noirs, the first white Cava to be produced from red grapes.
Innovative development for the still wine portfolio can be seen in an increasing number of organic wines. They include Raimat Terra, an organic proposition from the grapes to the packaging (light-weight glass, natural ink and a label made from recycled paper). “Innovation, passion for wine, love of the land and a focus on quality are some of our main values. We are proud of our brands and we work hard to offer consumers the best and most innovative wines on the market,” says the company.
J. García Carrión
Ownership: Family-owned
CEO: José García Carrión
Turnover: €425m from wine business; (€850m in total)
Exports: 45%
Production: The company produces wines in 10 DO regions across Spain, including Jaume Serra Cava (DO Penedès), Marqués de Carrión in Rioja, Viña Arnáiz in Ribera del Duero, Solar de la Vega in Rueda, and Señorío de los Llanos and Pata Negra in Valdepeñas. Total wine capacity is around 100m cases from 20 production lines and 100,000 oak barrels.
J. García Carrión was established in 1890. Since then, five generations have built the business into a major force in Spanish wine (and fruit juice); the company’s export business now covers 130 countries and five continents. Over the years, the company has evolved by diversifying its product offering. One of the most significant developments was the launch of its Don Simón brand in 1980, the first box wine on the Spanish market, which the producer describes as “a radical innovation and a challenge to tradition” for the times. Thirty years later the brand enjoys international status, selling in over 100 countries.
In recent years, like many other Spanish wine groups, the company has developed a portfolio of wines in key DO regions, taking in both still wines and Cava. Indeed there has been “significant investment” in Cava (Jaume Serra and Pata Negra brands), allowing production to reach 60m bottles.
The company hopes to make further gains in export helped by “continuous innovation in our wines – adapting them to consumer demands across the world – and through alternative packaging options such as BIB, PET bottle and different bottle sizes.”
García Carrión’s strategy is now to focus on quality DO wines, especially oaked wines, and sparkling wines, while increasing production efficiency and offering a competitive price/quality ratio.
Furthermore, the company aims “to increase consumer loyalty and encourage people to buy our products by creating Spanish brands using the same umbrella brand across DO regions such as Rioja, Cava or Valdepeñas”. An example of this is Pata Negra, which has long-established roots in Valdepeñas but now extends to Cava as well.
Félix Solís Avantis
Ownership: by Félix (CEO), Manuel, Pedro and Juan Antonio Solis
CEO: Félix Solís Yañez
Turnover: €230m
Exports: 60%
Production: Félix Solís Avantis is the holding company responsible for the logistics, sales and marketing of Félix Solís and Pagos del Rey. The company has wineries in the following DO regions: Valdepeñas, La Mancha, Ribera del Duero, Rueda, Rioja and Toro. Since the 1990s, the company has also operated a bottling plant in Shanghai. Annual production is currently around 300m bottles.
Félix Solís Avantis was founded in 1952 by Félix Solís Fernández and, despite significant expansion over the years, remains entirely family-owned. Today the business comprises DO wines, Vino de la Tierra wines, and bulk wines from Spain. The company has offices in France, Germany, the Czech Republic, UK, Japan, China, Mexico and, most recently, the US.
The company’s roots lie in the red wine heartland of DO Valdepeñas, situated to the south of La Mancha. Its original winery is located in the town of Valdepeñas, home to the company’s flagship Viña Albali brand. The Valdepeñas operation – along with that of La Mancha since an acquisition in the region in 2004 – is a major production centre for the company today, as well as its headquarters.
One of the most significant developments of recent times took place in 1998 when the company established a bottling plant in Shanghai, one of the first from Spain to make such a move. Export director Félix Solís Ramos says that this was “a long-term investment … in the last five years we have seen very positive results and a significant increase in sales”. He adds: “Today we have two business lines in China: the bottling plant and the import-distribution company for the introduction of Spanish DO wines produced and bottled in Spain. China is now among our top 10 export markets.”
The new millennium has seen Félix Solís Avantis develop a portfolio of DO wines under the Pagos del Rey banner through sizeable investments in key regions. The first region to be targeted with a new winery was Ribera del Duero in 2002 (Altos de Tamarón and Condado de Oriza wines); the acquisition of Castillo de Mudejar in Rueda followed in 2005 for white wines Blume and Analivia; another new winery opened its doors in Rioja in 2006 where the Castillo de Albai and Arnegui wines are produced. More recently, in 2008, the company gained a foothold in Toro where it snapped up the Viña Bajoz cooperative. The key wines here are Bajoz, Finca La Meda and the most recent addition, Bajoz Roble, a young red with short oak ageing.
The Pagos del Rey portfolio therefore currently includes four wineries, but Félix Solís Avantis has hinted at future additions which could well include a Cava. Indeed the adverse economic climate in Spain is not stopping this increasingly prominent Spanish company from moving ahead with its plans.
The winery in Valdepeñas, already one of the largest and most modern in the world with an output of around 220m L and 14 bottling lines, will benefit from an extensive investment package. The aim is to keep it ahead of the game in terms of efficiency and competitive wine pricing. Meanwhile, the company is eyeing Chile where it sees good potential to establish a bulk and bottled wine facility which would allow it to take advantage of the growing demand for Chilean wines in both Europe and Asia. Solís Ramos concludes: “For the next five years, we see ourselves growing both nationally and internationally, both in production and distribution. In terms of production, we are considering Chile and California for our next steps and we expect to gain significant distribution in the USA after opening an office in Napa.” Solís Ramos sees particularly good prospects for export growth in Asia and South America over the coming years.
United Wineries
CEO: Victor Redondo
Ownership: Owned by the Enartis Wine Fund, a specialist investment vehicle managed by Madrid-based ARCO Wine Investment Group SA whose assets exceed €200m. United Wineries operates as an independent organisation.
Turnover: €182m in 2011*
Exports: 65%
Production: United Wineries’ total annual production is currently around 37m bottles. The company operates seven wineries: three in Rioja and one in Penedès (Monistrol Cava), Ribera del Duero, Rueda and Arribes (western tip of the Duero Valley), respectively.
The company was established in Switzerland in 1993 as Berberana International, the export branch of one of Rioja’s leading wineries, Bodegas Berberana. In 1998 it became known as ARCO International, and by this time represented a growing number of wineries, mostly from Spain, including brands that remain important today such as Bodegas Berberana, Bodegas Lagunilla and Cavas Marqués de Monistrol.
The company still has a subsidiary in Switzerland covering all German-speaking countries, but other wholly-owned subsidiaries in key international markets have been opened up as the export business has developed. In 2001 the company moved its headquarters to London following the acquisition of the minority stake (49%) in Waverley Group, from International Wine Services (IWS). Several other subsidiaries followed: United Wineries A/S in Norway covers this country as well as the Nordic region (excluding Sweden), Russia and Poland; United Wineries España covers Spain and Portugal, and United Wineries AB, in Sweden, deals directly with Swedish monopoly Systembolaget.
In 2009, United Wineries entered into partnership with the La-Vis Group of Italy to distribute a portfolio taking in premium regional brands, sparkling wines and pan-Italian brands including La-Vis, Canaletto and Villa Cafaggio.
The company’s current strategy has been developed to suit its two wine portfolios. Turning firstly to the Berberana brand, this range of wines – which now extends beyond Rioja to take in reserva wines from other regions, two Cavas and varietal country wines – is targeted at the supermarket retailer and specialist wine shops. The Berberana Riojas are positioned at slightly higher price points in relation to the rest of the range. Berberana has recently been supported by the consumer loyalty scheme ‘One Cork, One Point’ in a number of established markets. The scheme, thought to be a first for wine, encourages consumers to choose Berberana in return for a range of rewards from wine glasses to a luxury break at the company’s five-star hotel Hacienda Zorita. Berberana is set to remain a priority brand “which will continue to evolve and expand with innovation and new product development” says the company.
Meanwhile, on another tack, the company is developing its Marqués de la Concordia portfolio of wines from its estates in Rioja, Ribera del Duero, Rueda and Penedès. These wines are sold through the on-trade and independent shops as well as the Zorita’s Kitchen café restaurants which have been established in a handful of key locations, including London and Salamanca, home to Hacienda Zorita. Zorita Kitchens, operated by sister company The Haciendas Company Ltd, are set for significant international expansion in the coming years. Offering the opportunity to sell the Concordia wine portfolio both in-house and as a retail proposition alongside delicatessen products, they are likely to open in markets and regions being targeted for development such as Russia, Asia and the USA. Around 50 are planned by 2020. Summarising its future plans, the company says: “The Spanish economy is in disarray and the levels of unemployment are worryingly high. To mitigate the risks all this poses, United Wineries is looking to increase its exports to both current and developing markets around the globe. The aims for the next five years are to consolidate most of the portfolio under either the Berberana brand or the Marqués de la Concordia Family of Wines, simplifying the offer into mainstream and premium wines.”
