In 2020, worldwide wine drinking dropped by 2.8 percent, although there had been optimistic reports of people stocking up on wines. This is the third year in a row that worldwide wine intake has declined. Despite general population growth, worldwide wine drinking is at its lowest level since 2002 (wine-searcher.com). Even in China, wine consumption dropped 17.4 percent (the world’s sixth-largest wine market) while the people in Spain stopped drinking as much (down 6.8 percent), and the Canadians moved on to other beverages, cutting their wine drinking by 6 percent.
Drinking Less. Enjoying it More?
Ample Challenges
In addition to a decline in wine sales, in 2020 Spain faced three trials: Mildew, Covid 19, and labor shortages. It was a very wet year, especially for the coastal regions as the spring rains coincided with temperatures warmer than usual creating ideal conditions for mildew. After intense efforts in the vineyard the problem impacted on yield rather than quality. In the end, drier weather and higher summer temperatures saw mildew retreat.
It should have been a successful year for Spanish wine with a bumper crop of grapes resulting in millions and millions of extra bottles for home and abroad. However, with Covid -19 there was a catastrophic drop in wine sales resulting in the government of Spain offering growers subsidies to destroy part of the year’s record grape harvest.
Faced with over-production in a shrinking market, 90m Euros were allocated to be used on either crop destruction, the distillation of grapes into brandy, and industrial alcohol. Lower limits have been set on the amount of wine that can be produced per hectare. The 2020 harvest was expected to produce 43 million hectoliters of wine, compared with 37 million in recent years. Even without Covid, this exceeds the combined domestic and international demand of 31 million hectoliters. To make matters even, restaurant sales declined by 65 percent, and exports declined by 49 percent since the beginning of the pandemic.
Winemakers are not happy.
Why? Because the government of Spain has been slow to respond to the crises. By mid-2020, the government had only approved 10 percent of claims for the green grape harvest, the term used for destroying crops. Because laborers from nearby countries (Romania and North Africa) were unable to enter Spain during the lockdown, fruit was left to rot.
A White, Rose and Red Future
Spain has the largest vineyard area in the world. Well aware of the significant impact of the environment on viticulture and the importance of preserving the land for future generations, Spanish winemakers are making important investments in organic wine production and currently have 113,480 hectares of certified organic vineyard (12 percent of the country’s total vineyard acreage), making it the world leader in organic viticulture.
The Spanish Organic Wines initiative started in 2014 and there are currently 39 family wineries as members with the goal of 160,000 hectares of certified organic vineyards by 2023. Most of the wineries are small to medium estates and own their own vineyard and make their own wine. The group is committed to adding value to local areas, revitalizing vineyards and preserving biodiversity, mitigating climate change by reducing its carbon and water footprint while crafting high-quality wines.
More than Sangria
When I walk into a wine shop I usually head to the Italian, French, California, or Oregon sections and maybe, if I have the time, ask for the location of the wines from Israel. Rarely do I direct my immediate attention to Spain – and – Shame on Me!
Spain is producing delicious wines that are both user-friendly and not a burden to my budget.
For centuries, wine has been an important part of the Spanish culture as the vines covered the Iberian Peninsula since (at least) 3000 BC with wine making starting around 1000 BC thanks to Phoenician traders from the eastern Mediterranean. Today the export of Spanish wines is very important to the country’s economy as the domestic market is shrinking and small towns rely on the industry for employment.
Diversity
Currently, Spain is home to more vines than any other country on the planet (13 percent of the total world vineyards, and 26.5 percent of European ones), with a national wine output exceeded only by France and Italy. There are seventeen administrative regions, and as the climate, geology and topography are variable, so are the Spanish wine styles.
In the cool northern and northwest vineyards, the wines are light, crisp, white and exemplified by Rias Baixas and particularly Txakoli (a personal favorite). In the warmer, drier regions, further inland – the wines are mid-bodied, fruit-driven reds (think Rioja, Ribera del Duero and Bierzo). Close to the Mediterranean, the wines are heavier, and more powerful reds (i.e., Jumilla), except in higher-altitude districts where reduced heat and humidity encourage the production of lighter reds and sparkling Cava. Sherry controls its own space as its distinctive style is the product of humans and their winemaking techniques rather than a climatic influence.
Over the most recent decades, Spain has modernized its wine industry resulting in significant improvement in quality and reliability. The modernization is encouraged and supported by the government and the nation’s wine-classification system is heavily influencing the new techniques.
International vs. Domestic Marketplace
According to the Spanish Wine Association, winemakers in Spain lead in global sales volume, ranking first in terms of wine export volume, and third worldwide in terms of export value, trailing France and Italy. Spain may export more wine than other European countries; however, France sells about 33 percent less wine but earns about three times more because a large portion of Spanish wine exports are directed to low -price countries, especially in Europe (i.e., France, Germany, Portugal, and Italy) where lower price is related to the sale of wine in bulk. Countries paying a higher average price (including the US., Switzerland, and Canada) have not only increased their prices but also their share of the total.
In 2019, Spain exported more than 27 million hectoliters, above the annual average for the last 10 years. Wine is the fourth most exported product in Spain, behind pork, citrus fruits, and olive oil, and more than 4000 companies export their wines.
In 2020, domestic wine consumption declined to 9.1 million hectoliters’ (-17 percent compared with 2019), severely affected by the cancellation of shows and events and by restrictions in the hospitality industry. In addition, the Covid-19 infection rate was relatively high in Madrid and Barcelona, the two main centers for wine consumption.
Some of the consumption eliminated by hotels and restaurants was transferred to domestic enjoyment through retail purchases which increased substantially, making it the main sales channel with 47.5 percent of the total. Spanish household spending on wine increased by 15.3 percent in 2020, after posting growth of 15.7 percent in 2019.
Change, Change, and Change
The wine sector must adapt to changes in consumer preferences as they are increasingly concerned with health, sustainability and the environment. In general, these changes translate to a more domestic, healthier consumption that values more organically grown grapes and recyclable packaging. Wineries and retail outlets are now developing alternative sales methods such as home deliveries, and e-commerce sites, including virtual experiences such as tours and tastings.
The wine industry also supports the care and conservation of natural resources, since the survival of vineyards depends on protecting species, ecosystems and natural habitats. This is particularly the case of organic viticulture which is becoming increasingly important in Spain. With over 121,000 hectares in 2020, just over 13 percent of the total area of vineyards for wine making it is estimated that organic viticulture produces over 441,000 tons, positioning Spain as a world leader in terms of organic wine production.
Wine Tourism
The environment in which vines are grown is an attribute that enhances the experience of wine consumption. This is the essence of the appellation of denomination of origin (DO), integrating both tangible and intangible features linked to the local area (climate, soil, grape variety, tradition, cultural practice) helps to determine the uniqueness of each wine.
Wine tourism offers a different experience in the marketing of wines through visits to wineries, food and wine days, and various events. It combines wine and culture, is complementary to tourist activities and services, generates income for hotels, restaurants, and other local businesses and is not too seasonal. It might even benefit from the health crises as wine tourism is an attractive activity for people looking for quiet uncrowded places with open spaces, and close contact with nature.
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This is a four-part series focusing on the Wines of Spain:
1. Spain and its Wines
2. Taste the Difference: Quality Wines from the heart of Europe
3. Cava: Sparkling Wine Styled by Spain
4. Label Reading: Spanish version
© Dr. Elinor Garely. This copyright article, including photos, may not be reproduced without written permission from the author.
