Follow-up: 2009 grape purchases by Catalan wineries

Further news on expected grape purchases by the three leading winery groups in Catalunya:

Of the big three, only Codorníu has committed to supporting local grape growers this year by holding prices at 2008 and annoucing intentions to buy 10% this year over last.

Freixenet will be maintain volume, but at a lower price, citing increased worldwide competition and a drop in wine consumption due to the economic crisis.

Torres will hold prices at 2008 levels, but will stick with their previously announced plans to lower purchase volumes: -30 to -50% less for red wine grapes and -15% to -30% for white.

The Catalan Department of Agriculture, Food and Rural Support (DAR) has stated that the crisis appears to be having a greater negative effect on still wines than on sparkling Cava

50% drop in 2009 grape purchases forecasted for Catalan wineries

The economic crisis and excess stock is setting the scene for a drastic drop in grape purchases this year among Catalan wineries. In La Vanguardia (July 15, '09) Ramon Francàs reported that many in the market expect purchases could be down by 50% this year.

According to the article, the Torres winery, leading still wine producer in Catalunya, has sent a letter to its 620 grape suppliers informing them that the winery will be taking in 50% less red grapes and 30% less white grapes. The two other major players in the market, cava giants Freixenet and Codorníu as saying they will hold volumes, but there is no mention yet of price.

Third largest cava producer Juvé & Camps confirms that purchases will be lower, in part due to recent increases in their own vineyard holdings. Gramona, another cava maker, has announced that they too will be buying less.

Growers union representative Mr. Joan Santó (Unió de Pagesos) estimates that small and medium size winery grape purchasing will be down by 50% and that his members are "terrified" at the prospect.

Codorníu 2008 results: US sales up 135%

The purchase by leading cava and wine group Codorníu of US distributor A.V. Brands has shown immediate benefits; group sales, which includes imports to the US and those of Artesa, Codorníu's Napa Valley winery, rose in 2008 to 35.2 million euros, up from 12.8 million in 2007.

Overall, total group sales rose by 10.5% to reach 244.47 million euros. Codorníu's sales in Spain were also up: cava by 6% and still wines by 4.7%.

Sourced from: Expansión Feb 17, by Sergi Saborit.

Cava for the crisis?

Report in El Pais on Monday 1/12 notes that Cava production remains high despite negative forcast for holiday party spending. The article quotes a source from Cava giant Freixenet as saying production levels for cava are as high as ever and hinting that export sales results are superior to domestic Spanish performance. Despite any as yet undetected changes in consumer spending, the company is looking to nudge up prices to reflect higher operating costs and also drive certain brands in supermarkets.
Cava's other major producer, Codorniu, said any price changes would be insignificant, and that they would be focusing on Raimat sparkling wines (traditional method non-cavas).

Given their higher on average prices, the large growth in recent years of Champagne sales in Spain may be threatened and Cava could possibly win back domestic market share.

No repeat for Freixenet's Scorsese ad

Last year Cava giant Freixenet made a big splash by hiring Martin Scorsese to direct an ad that garnered a lot of attention via Internet views (over one million hits according to one Spanish economic newpaper, and a random search via YouTube shows some users-published versions having tens of thousands of views). Freixenet had announced that they would be continuing in 2008 with a new director, bandying about such names as Coppola, de Palma, Lynch and Tarantino, but instead the project has been cancelled. They will return to their standard for-the-Spanish-market TV ad, this time featuring Spain's Olympic silver medalist sychronized swimteam.

So, does this mean that the Scorsese ad was not successful, or was too expensive to make? Or maybe it was so successful that it can continue to be a reference point on its own? Or perhaps the TV ad's importance for the Spanish market (newspaper TV guides in Spain have in the past of listed the ad's showing times, just like a sit-com or police drama) was seen by the company as a better investment.

Cava made with gold

I recently saw news about a Cava made with 24 carat gold flakes. Its made by Artesanos del Vino in Valencia. Their web site doesn't mention how much gold is used, but the price certainly is impressive at 120 euros per 750 ml bottle.

UK sparkling wine sales up by 44% from '02

In a recent market report from Mintel, sales in the UK of Sparkling wines are up by 44% since 2002, up 13% from last year to reach 42 million liters, outpacing Champagne volumes (29 M liters) by 20% for the same five year span.

In value, sales of sparkling rose to 385 million pounds, up 27% from 2002, led by Cava and Australian sparklers.

The report pointed out that while non-Champagnes are strong in the off-premise market, they need to improve much more in the on-trade, ie. projecting a stronger quality and prestige image.

Quoted in Decanter, Jo Sorensen, brand manager at Codorniu, said 'We see further growth opportunities for the future. UK consumers are ready to try the upper tiers of the sparkling wine category and the statistics show that they are actively trading up.'

Castellroig: the best cava in the world?

In the recent rankings of Spanish wines by The Wine Advocate (a.k.a. Robert Parker), the small family owned and operated winery and cava producer Castellroig (pronounced: cas-TEL-roch) earned the highest point score of all cavas reviewed: 91, for their Castellroig Reserva Familiar Sabaté i Coca.

The points given by Parker were awarded to two separate vintages (the 2001 and the 2003), making this cava (arguably) the best in the world.

Scorsese Freixenet ad: over 870,000 hits

An item printed in today's La Vanguardia newspaper states that Freixenet has had over 870,000 on-line visitors view their ad directed by Martin Scorsese - a huge amount of traffic! Who knows how much this campaign cost the company, but Freixenet says they're very pleased with the results.

Scorsese Freixenet ad now online

The ad for Freixenet created by Martin Scorsese is now on-line. As an homage to Alfred Hitchcock, its great, but as an advertisement for the product, I'm not so sure (unless of course, the bottom-line reason is that people -myself included - are posting about it on-line!).

All that expense to promote one of the company's more downmarket products seems like a waste of effort. After all, if the trailer is called "The key to reserva", shouldn't they have used their Reserva Real instead of Carta Nevada?

Codorniu - back in the black

Europa Press reported this week that major Cava and still wine producer Codorníu has announced a return to profitabilty in the most recent fiscal year (June 2006 to July 2007). Invoicing rose by 11% from the previous year to 221 million euros. The net profit was 38 million euros, aided by the sale of their downtown Barcelona headquarters to a hotel group. The previous fiscal year included the costs of a restructuring program resulting in a net loss of just under 1 million euros.

35% of sales this past fiscal year came from export markets, led by the UK (35% of the group's exports) and the US (22%). Export sales rose by 10% for the period and domestic sales by 12% for the year. Leading the rise were the brands of Legaris (D.O. Ribera del Duero), La Vicalanda from the Bodegas Bilbainas winery (D.O.C. Rioja), Anna de Codorniu cava and Codorniu Pinot Noir cava.

Also of recent note was Codorniu's purchase of A.V. Imports of Maryland to further boost their presence in the US market.

Martin Scorsese to film Freixenet TV ad

News today that legendary director Martin Scorsese will create the big year-end TV ad for Cava giant Freixenet. The spot will run about seven minutes and will be shot in New York City.

No word as yet who will star. It may well be done with unknown actors as Freixenet is departing from its big name star approach of the past 30 years to feature big name directors. The 1977 spot starred Liza Minelli and last year's featured Gweneth Paltrow. Other stars have included Demi Moore, Pierce Brosnan and Penelope Cruz.

Spanish wine exports 2007 - up 12% in first trimester

First trimester exports of Spanish wines showed double digit growth in both value (+12.5%) and volume (+12.6%). The FEV data is based on customs' reports for January through April 2007 and provides comparisons with the same period last year.

The highlights for the 1T 2007 period:
Higher value exports to the US: among Spanish wine's 5 highest value markets, the US market grew fastest, up 15,25%, spending 39 million euros on D.O. wines and 10 M€ on Cava. Germany is still the overall most valuable market: at over 92M€, accounting for 18% of Spanish wine exports by value. Second most valuable market is the U.K. at 75M€. The U.K. imported the highest value amount of D.O. wines, 50M€.

Bulk exports to Russia continue to grow, up 420% to 50 million liters. The trade ban on main Russian market suppliers Moldova and Georgia continues, providing commercial opportunities for Spanish bulk suppliers. France was Spain largest bulk wine market for the period at over 60M liters. And Germany is the largest market overall at over 80M liters.

Bottled wines from D.O. were up nearly 9% in value for the period, on flat volume. The majority of the growth in value was the +14% growth the value of white wine shipments. While for bottled red table wines growth in value and volume was at roughly 15%. Cava grew nicely at 12% growth in value on 5% volume growth.

2006 cava sales hit domestic record

Sales of cava within Spain hit a record of 101.3 million bottles, up by over 8% from 2005, evidence that the "cava boycott" in the rest of Spain is completely over. However, the inroads made by cavas not produced in Catalunya, which had benefited from the boycott, continued their growth in sales: up by 53% in 2006, on the heels of 2005's unprecedented 93% growth.

On the less positive side, exports of cava, which had grown over the past decade from 153 million to 224 million bottles, dropped by over 4% last year. Most likely responsible for this was the 18.5% drop in cava's main foriegn market, Germany. Major export growth occured in Japan, whose imports rose by 27%.

Codorniu bites the bullet

Codorniu, the family-owned Cava/Wine group that produces roughly one-third of all Cava, has announced losses for the first time in their +125 year history. Their last fiscal year (July 2005 - June 2006) ended in red by 905,000 euros, on sales of 201 million (a drop of 3%, attributed in large part to the Cava boycott). A large factor in these losses has most likely been the cost of internal reorganization.

This fiscal year, the group is forecasting increase in sales of roughly 9% to 218 million euros. Codorniu is planning to invest some 12 million euros this year to: buy 150 hectares of vineyards in Argentina's Uco Valley, further improvements to their Rioja winery, Bodegas Bilbainas, as well as to Artesa, their winery in Napa, and to Raimat, their winery in the Costers de Segre D.O.

Raimat's sparkling wines will return to D.O. Cava clasification, with the recent change in the Cava D.O.'s stance on the use of Pinot Noir to produce white sparklers, which Raimat will continue using.

Codorniu's Managing Director , Xavier Pagés, has played down rumors of additional winery buy-outs which had been triggered by the news that one of the Raventos family members (which owns Codorniu) had stepped down from the board of directors and had bought fellow cava producer Parxet.

Canals & Munné cava

I had previously seen bottles of this cava producer in shops around Barcelona, but had never tried it, perhaps due to their rather staid and traditional labels. But yesterday, the family and I went to a late-Thanksgiving lunch at a friend's. Also attending was Eduard Montserrat, who works at the winery, and who had brought along a few bottles of their reserva rosé cava. It was great.

Typically, rosé cavas are made from trepat grapes, which tend to be somewhat light and un-inspiring. The Canals & Munné rosé is made from 75% Monastrell and 25% Garnacha, making for a more dynamic base, and is aged for nearly three years in the bottle, making for a nicely refined sparkler; not at all acidic with steady bubbles. In all, a very nice find.

Pime Cava - the little guys speak up

This week saw the first public steps of Pime Cava (pron.: pee-MAY) a group of small and medium-sized cava makers that formed back in February, and who had been silent since. Tuesday, the group held a conference in Barcelona at which several of Pime Cava's organizers spoke, including group president Xavier Nadal (Cavas Nadal) and Agustí Torelló(Agusti Torelló i Mata). Quoted in La Vanguardia on Wednesday, Mr. Nadal emphasized that the goal of this group of 73 wineries is emphasize quality Cava, brake with soft pricing trends and promote indigeneous grape varieties, among other goals. Mr. Torelló added that the small and medium producers could, together as a group, be an important voice in a sector with two "large production companies who get bigger everyday and are less tied to the sector". Recent declarations of the end of the Cava War between two giants of Cava, Codorniú and Freixenet, may have caused concerns on the part of smaller producers that too much friendliness between the big guys might not be best for them.

Cava production is dominated by the two giants of Cava, Codorniú and Freixenet, who between them bottle more than two-thirds of all Cava. The last third is made by the other 244 Cava houses, who make up 91% of the total number of producers. The average production of these 244 Cava makers is 585,000€ of sales per year on 103,000 bottles.

It is not at present clear how Pime Cava plans to reach the goals outlined by its president, but hopefully they can help expand the reach of the quality small cavas to new customers.

Cava Week program / the mood of the Cava world

Last night, the cava promotional organization the Confraria del Cava released the program of Cava Week (Setmana del Cava: Oct 7 to 15) and the new poster by leading designer Xavier Mariscal. The presentation provided clues to the mood of Cava producers going into the all-important year-end season.

In general, the mood is of cautious optimism following the cava boycott of a year ago in parts of Spain. In all sales of cava in Spain declined 7%, while exports rose. The Catalan Government's Counselor for Agriculture, Livestock and Fishing, Jordi William Carnes i Ayat, said that the boycott can have the positive effect of raising awareness of cava by its having been talked about so much.

The presentation included calls for more international promotion of cava and promotion of drinking it not only at year-end and that the cava producers should all be working together to build markets - an oblique reference to the end of the Cava War between Freixenet and Codorniu, the two major cava houses that produce roughly two-thirds of all cava.

This year's Cava Week event will overlap and continue on after the open air tasting event Cavatast, Oct. 6 to 8. and will feature the parties and competitions, the crowning of the Queen of Cava, plus a conference on the effects of global warming on viticulture and enology.

The Cava War: the war is over

Appearing in today's La Vanguardia newspaper was the news that Freixenet and Codorníu, the two giants of Spain's sparkling wine sector (Cava) have reached a "peace" settlement. These two companies, who between them produce roughly two-thirds of all Cava, have been suing each other for the past 10 years over alleged fraudulent trade practices. According to today's report, the various lawsuits have been withdrawn and there have been rumors of some "economic compensation" being made, but the details as to the amount and type of compensation, and by whom - to whom have not yet been revealed.

The "cava war" was launched in 1996 when Codorníu accused Freixenet of releasing cava that was aged less than the mandatory 9 months in the bottle. Freixenet's position was that when the time required for the bottles to reach the consumer was factored in, the nine month period was met. Then they countersued Codorníu for using white frosted bottles, mainly in the UK, which Freixenet considered to be a violation of trademark for one of their signature products, Carta Nevada. Each side won some of the courtroom battles, but in the end, no conclusive decisions were issued by the courts, while a great deal of effort was made in waging battles that most likely did more to harm than good to the image of cava.

Additionally, one of the disputed issues concerning the Cava D.O.'s prohibition of Pinot Noir in white Cavas, which had promoted Codorníu's Raimat brand to leave the Cava D.O. and produce their own style of sparkling wine, had been rendered moot a year ago when the D.O. changed its stance, allowing Pinot to be used in white as well as rosé cavas.

So, now, the two heavyweights can try to get on with things, which means principally in the domestic market, overcoming the effects of the "cava boycott" outside of Catalunya, which saw sales in 2005 drop by nearly 7% or 6.6 million bottles, while Champagne sales in Spain shot up dramatically last year. Internationally, the volume of Cava export sales are nearly equal to those of Champagne.

Cava sales 2005

The Spanish national newspaper El País published an article on Monday about the 2005 sales results for Cava, both within Spain and in the export markets.

Last year just over 222 million bottles were sold, a 0.46% increase from 2004. 58% of sales were for export, with Germany (56 million bottles) , the UK (29 million) , the US (12 million) and Japan (3.7 million) as the top four markets for Cava. These four countries accounted for 78% of all Cava exports, which rose 6.6% from 2004, helping to offset a drop of 6.6% in sales within Spain.

The main challenge facing Cava sales within Spain last year was a politically motivated boycott of Catalan products in the rest of Spain, of which Cava bore the brunt. Because the Cava D.O. region extends to areas outside of Catalunya, such as La Rioja, Valencia, Extramadura and others, sales of non-Catalan Cava shot up 93% in Spain last year.

Another factor slowing domestic sales of Cava was increased imports of Champagne, which were up by 36% in Spain to 916,000 bottles. Cava exports of 128.9 million bottles was just short of the 2005 export mark for Champagne at 129 million bottles; testament to the growing popularity of Cava around the world. Cava exports have grown by 112% from 60 million bottles in 1995.

The Cava industry continues to focus on two objectives: gaining more ground in export markets and increasing sales through the year, not just at during the holiday season.

My star of CavaTast: Cavas Mestres

This past weekend was the annual Cavatast event, a three day exhibition, tasting and block party in the town of Sant Saduni d'Anoia, the capital of Cava. There were 45 local cava producers, restaurants and delis on hand to supply the goods. Last year, over 50,000 people attended and this past Sunday, it felt like a good many of them had returned! There was a great, convivial atmosphere and plenty of good cava.

For me, the big discovery of the event was the new presentation of the Celler Mestres brand.

This is a high quality, upscale producer whose "simplest" cava is bottle aged for 36 months, or 4 times the aging required by the Cava D.O. This extra aging gives their cavas a creamy richness that is well set-off by the tiny persistent bubbles.

Mestres has totally redone their packaging, using texts and typefonts from historical documents to make the capsules, and a few of the bottle labels. Other bottles use solid color labels, and their top of the line Gran Reserva cava, "Mas Via", which is first aged in oak for 1 year and in the bottle for a further 7 years, simply has 3 plus symbols where you would normally see the main label (this is a play on the name "Mestres", which in the local catalan language could mean "plus three").

Mestres currently sells most of their cavas in Spain, with some activity in the UK. In 2006 they plan to make further expansion in overseas markets. With these cavas and packaging, they should really get noticed!

Demi Moore and Cava

In yesterday's edition of the La Vanguardia newspaper was the news that Demi Moore will appear in the year-end TV ad for Cava giant Freixenet.

This ad campaign is an annual media event that draws so much local attention that the newspaper TV section lists the timeslots when the ad will be run. Stars appearing in past ads include Pierce Brosnan, Meg Ryan, Don Johnson, together with notable Spanish personalities.

Cava week

Last night, I attended the presentation of activities for la Setmana del Cava, or Cava Week, which will take place October 8th to 16th in the town of San Sadurni d'Anoia, the unofficial capital of Cava.

This will be the 24th year of Cava Week and it will be full of events surrounding this sparkling wine that holds an important place in Catalunya's wine industry and cuisine. A new Queen of Cava will crowned, there will be a gala dinner offered by a group of leading chefs as well as a 9K foot-race for which 1st prize is the winner's weight in cava!

In all, a real community festival.

At the presentation event last night, Mr. Pere Bonnet, President of the Confraria del Cava, presented the program of events. Also present was the head of Cava D.O. , Gustau Garcia Guillamet, who diplomatically called for unity in the Cava sector, a veiled call for an end to the recent protests by some grape growers' associations about the low prices being paid by the cava producing wineries for grapes. Mr. Magi Raventós, President of the Cava Insitute added his comments that with unity and dialogue, these disagreements could be overcome. And the speeches were closed with comments of the Catalan Agricultural Minister, Antoni Siurana, which recognized the high quality of cava and that it reflects the values of enjoyment of life here in Catalunya that can be shared by nearly everyone around the world.

Changes in Cava D.O.

Appearing in Barcelona's La Vanguardia newspaper on Sunday July 24 was an article on the Regulatory Council of Cava, which is the agency that oversees the Denominacion de Origen Cava, which produces Spain's traditional method sparkling wine.

Last year the region produced 221 million bottles of Cava and in the last 8 years exports have increased by 142%. Consumption in Spain continues to expand, last year growing by over 2%.

The Council has applied for conversion of the region from a D.O. to a Denominación de Origen Calificada (D.O.C.) which would further estabilish the high standards of quality among the various grape growers and Cava producers.

There are no plans to expand the areas in the Cava D.O. but there are moves afoot to permit the use of Pinot Noir in "white", that is so say, not rosé, cavas. The present rule against Pinot had caused the industry leading Codorniu Group to remove their Raimat sparkling wines from the Cava D.O. The Raimat sparkling wines are sold as V.E.C.P.R.D. (or Vinos Espumosos de Calidad Procedentes de un Region Determinado, which means Quality Sparkling Wine from a Designated Region).

Additionally, the conditions for designating a Cava as a "Reserva" will require 15 months of aging. For "Gran Reservas", 30 months of aging will be required.

Freixenet enters Rioja

The giant cava group has purchased Santamaría Lopez winery in the Rioja Alavesa region for 10 million euros. This winery, which has a production capacity of 250,000 9L cases produces Solar Viejo and private label wines. According to Freixenet president Josep Lluis Bonet Ferrer, the aim for the latest wineries is to invest in it, launching new labels, and moving away from volume-based business.

Codorníu: cava and more wine

The major traditional method sparkling wine producer, Codorniu, has seen a 50% increase in their still wine sales. For their last fiscal year, ending June 2004, sales were slightly off, by 2.7%, but profits were up 6.4% from the previous year to just over 12 million euros.

The Group has wineries in several regions in Spain (including Priorat, Rioja and Ribera del Duero) one in Argentina, and another in California. They may also be considering purchase of a winery in Andalucia. Could it be a Sherry producer?