Spain's Ribera del Duero region enjoyed a boom decade beginning in the mid-1990s. But the global recession slowed that meteoric growth dramatically. Spain, once a vibrant economy, has been particularly hard hit. Rather than adopting a conservative approach, though, Vega Sicilia, the appellation's most famous producer, has used the crisis as a chance to make strategic investments. It has renovated its flagship winery and developed a new partnership to challenge the finest producers from Ribera’s historic rival, Rioja. It appears that Vega Sicilia’s management believes the current economic slowdown presents an excellent opportunity to prepare for the next boom.
For more than a century, Vega Sicilia existed in relative isolation in north central Spain, producing some of the country's most expensive and prestigious wines outside an official appellation until the Ribera del Duero D.O. was established in 1982. But since 1991, the company has branched out, establishing Bodegas Alion in Ribera del Duero, Bodegas Pintia in Toro and Tokaj Oremus in Hungary.
The new joint venture in Rioja is named Bodegas Benjamin Rothschild & Vega Sicilia. Baron Benjamin de Rothschild, a member of the international banking family, owns 50 percent of the project. (Other branches of the family own Mouton-Rothschild and Lafite Rothschild). Xavier Ausàs, technical director for all of Vega Sicilia's properties, oversees the winemaking.
“We starting visiting the region in 2006," said Ausàs. "Due to the particular difficulties regarding the large number of small landowners in Rioja, it took us five years to buy the 250 acres of small vineyard parcels we have today—162.5 acres contain vineyards at least 30 years old.” Experimental wines were produced in 2006, 2007 and 2008. All the vineyards are within six miles of the town of Samaniego in Rioja Alta. Neighboring vineyards are farmed by Bodegas Contador and by the Eguren family.
Ausàs and his team leased a winery to produce the 2009 and 2010 vintages. Next June, two 2009 wines will be released; around 45,000 bottles of a first wine and 25,000 bottles of a second. The wine names and pricing haven’t been determined yet. “I like the minerality and feminine character of the wines,” said Ausàs.
Back in Ribera, Vega Sicilia has built a gleaming new winery to make its top cuvée Unico and second wine Valbuena 5°. Construction began in November 2009 and was completed in nine months, just in time for the 2010 harvest. Ausàs said that the winery was designed to maximize the expression of Vega Sicilia’s different vineyards. To help translate 19 different soil types, they ferment each parcel separately, producing 30 separate lots. Having so many different lots allows the team to produce a more precise final blend for Unico and Valbuena 5°. “In making the wine, the mentality is similar to Burgundy while the final conclusion is more like Bordeaux,” said Ausàs.
Ausàs says that the cost of the new winery, around $28.8 million, equals the amount the winery lost by not releasing Unico in 2001. Vega Sicilia’s vineyards suffered extensive frost that year and the harvest was from a second flowering and management believes that a first wine cannot be made from second fruit.
Ausàs believes this perfectionist philosophy is supported by sales. He said that Unico and Valbuena 5° have continued to sell well over the past three years because in uncertain times, their customers have preferred to buy wine whose quality they know.
But this aggressive growth during the current economic crisis has not been without difficulty. For over a year, Spanish and British periodicals have reported on a dispute among the family members that comprise the board of directors of the El Enebro group, which includes Grupo Vega Sicilia. David Alvarez, his son and daughter are on one side and five of David’s other sons, including Pablo Alvarez, general director of Grupo Vega Sicilia, are on the other. The dispute centers on control of El Enebro.
A judicial proceeding currently underway between the two sides remains unresolved. Management insists the Vega Sicilia properties have remained unaffected. “It does not concern Vega Sicilia, it concerns the [two groups],” said Purificacion Mancebo Lobete, export manager.
Meanwhile, progress has continued apace at the company's other wineries. Meanwhile, progress has continued apace at the company's other wineries. Bodegas Alion produced 30,000 bottles for its first vintage in 1991. Today, the winery produces its target of 300,000 bottles. Today, Bodegas Pintia produces its maximum goal of 280,000 bottles, up from 80,000 for its first vintage in 2001. Tokaj Oremus was founded in 1993. A focus on the quality of the dry Furmint grape in recent years has yielded steady improvement in the wine.
“The winery that suffered the most after the crisis was Tokaj Oremus since sweet wines are a niche market," said Lobete. "Before the crisis, demand for Vega Sicilia and Alion was double what we had to sell. Today, demand still easily exceeds production. Our youngest winery, Pintia, is still less known on the market but production is smaller, as well. Overall, we remain a strong presence in all 110 export markets we opened before the crisis.”
With the company's new winery at Vega Sicilia and new partnership in Rioja, its management is obviously preparing for better times.