Market Watch, December 2020

DECEMBER 2020 MARKETWATCHMAG COM MARKET WATCH 57PHOTOS BY LEE OSBORNEplacements we had worked so hard over so many years to obtain We worked with our winery partners and distributor part ners to adjust our pricing so that accounts would be impacted as little as possible Doody added that he finds it particu larly inappropriate for the tariffs to continue amid the on premise devasta tion from Covid 19 Tariffs aside this year Spanish wine brands also had to face the consequences of Covid 19 which shuttered restaurants and bars starting in March While many states have slowly reopened their venues largely at limited capacity and with restrictions the threat of further lockdowns persists and the temporary loss of business has been a small blow to the Spanish wine category The key to sales and growth of a brand is lips on a glass says Baggett of Perinet which had to shut ter its on premise tasting room in March Covid really devastated the on premise but thankfully consumers were willing to look for wine elsewhere Indeed the blow from the on premise loss has been offset to varying degrees by the sales surge in the off premise Campo Viejo for one experienced its largest growth period in U S history this year according to Prior Familia Torres and Perinet also saw sales increase signifi cantly as consumers stocked up their at home bar supplies Luis of Sparrow notes that big Spanish brands are domi nating the sector more than they normally do accounting for about 6 of his wine sales Theyre outperforming the rest of the wine too by a significant margin in terms of profit he adds He notes that as consumers shop during this stressful time they gravitate toward the brands they know Familia Torres is one of those brands and Maczassek notes that the winery is no stranger to hardships When our winery was bombed during the civil war in Spain many customers in the U S helped us rebuild it by placing orders he says The same has happened through the Covid 19 crisis There seems to be a sort of timeless trusting relationship between the consumer and our wines he adds The U S isnt just another market theres a connection there with my family that goes through history Looking AheadIf consumers remain curious and continue to explore the world of imported wines Spanish table wines will certainly see contin ued growth in the U S in the coming years Spain is such a diversified wine country Sparrows Luis says Theres a lot to be discovered that even consumers who are experienced with Spanish wine would be surprised to find But Luis notes more consumers must pay attention to the category In addition to innovating and market ing Spanish wine brands may look to premiumization to make further gains in the future The majority of Spanish table wines in the U S market retail at less than 20 a bottle with many priced below 10 But now as consumers become more knowledgeable about Spanish wine regions they may be willing to pay up Baggett of Perinet certainly hasnt seen any resistance to the higher pricing of his winerys Garnacha and Carignan offerings Weve had no resistance to pricing and weve grown each year since our debut in 2017 in both the DTC and wholesale channels Baggett notes adding that 90 of the winerys sales come from DTC Brands can also help themselves by focusing more on consumer education Spain has historically been one of the largest produc ers in the world but its not as well known as France or Italy or the U S says Baggett But people understand Bordeaux and Burgundy so theyll come to be familiar with Spanish regions Maczassek of Familia Torres hopes that the curious appetites of todays consumers will continue to drive the Spanish wine cate gory in the U S Theres a new generation of wine consumers whose knowledge is growing every day he says This empowers Spanish winemakers to take risks and to start producing wines in new regions or with relatively unknown grape varieties mwFamilia Torres Waltraud cellar top general manager Miguel Torres Maczassek above is one of the familiar brand names consumers have turned to throughout the Covid 19 crisis as they drink at home