In Changing Market Landscape, Spain's Navarra Region Seeks Global Wine Sales Opportunities


Lush vineyards in Navarra, Spain produce red, white and rosé wines that satisfy a demand at home and abroad. (Photo by Mike DeSimone)Photo by Mike DeSimone

With sales of its wine on the rise in China, Spain’s Denominacion de Origen Navarra seeks to continue that momentum while increasing its global wine sales. The region just released final tallies for 2017, which show that it was the best year Navarra had in the last decade. Much of the increase is thanks to the rise of the Chinese market. Within the last five years China has reached Navarra’s top export position and represents 26% of total international sales. Individual brands and the region as a whole continue looking for and opening new markets around the world.

According to David Palacios, a 40-year old viticulturist from the town of Olite, who is the current elected head of the D.O.:

The wine market is almost saturated worldwide, and sometimes you can perform better in small, lesser-known countries than in other markets [such as] the U.K., where trade is really a tough matter. For instance, this year we are exploring new places such as the Baltic countries of Estonia, Latvia and Lithuania, as well as Ireland and Russia.

This region in northwest Spain is known primarily for five main grape varieties. The key red grapes here are Tempranillo, Garnacha (Grenache) and Merlot, while the most populous white varieties are Chardonnay and Viura. Syrah, Graciano and Sauvignon Blanc are grown here as well. Known for its high quality yet relatively low-priced wines, Navarra sits at the top of the value/price ratio in Spain. Almost 60% of the wine produced here is red, and about 13% is white.

While 86% of the grapes of Navarra are red, almost 28% of the region’s total output consists of deeply-colored rosé wine made from red varieties. Both the global demand for rosé and Navarra’s strong reputation for excellent versions of it—especially made from Garnacha—caused a rise in rosé sales of 50% in 2017 over the previous year. Last year the D.O. amended its regulations to allow wine to be packaged in cans. Artadi Winery launched the very first Navarra D.O. Rosé in cans, sold in a 4-pack of 250 ml cans. This packaging brings the unit sale to 1 liter rather than the traditional 750 ml bottle.

The top five export markets for wines from Navarra are, in order, China, Germany, United Kingdom, Holland and the United States. In 2017, China purchased almost 3 million liters of bottled wine from Navarra, a significant rise over the 900,000 liters exported there in 2012. There is much room for the export market to grow, as 67% of Navarra’s wine is sold within Spain.

Although sales to the U.S. have been stable for the last several years, averaging around one million bottles per year, overall sales are slow considering the general performance of Spanish wines in the market. Difficulties include the fact that the U.S. market is not just one market; in reality it is 50 markets, one in each state. Selling wine into the U.S. is highly complicated, especially considering restrictive regulations regarding wine and alcohol in many states. While individual producers, in particular small ones, do not have the money to invest in sales and marketing, the D.O. is continuing a marketing push in the U.S. in order to maintain and increase awareness. Since 2016, successful trade tastings and marketing events have been held in New York, Boston, Washington D.C., Chicago, Atlanta, Miami and Austin.

Consumers who are interested in organic or natural wines or those produced sustainably should note that 11% of the wines of Navarra are certified organic and that more than 10% of the vineyard surface is in the process of being converted to organic growing, which is a three-year process. There are approximately 11 wineries producing biodynamic wines, representing 15% of the D.O. and many more are in the works. In addition, more than 50% of Navarra’s vineyard area is considered “integrated farming,” a European Union sustainability designation that offers farmers flexibility in viticulture practices rather than a rigid set of parameters offered by an organic certification.

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