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  • “The word Rioja helps to sell, but adding value is up to the individual”
  • “The word Rioja helps to sell, but adding value is up to the individual”
  • “The word Rioja helps to sell, but adding value is up to the individual”
1.Javier Murua. 2. Chatting with Abel Mendoza. 3. With Ruth Cabello, export manager for Asia. Fotos: courtesy of Muriel.

Interview

“The word Rioja helps to sell, but adding value is up to the individual”

Amaya Cervera | July 16th, 2019

Javier Murúa, 41, belongs to the new generation of Rioja producers but he is not the terroir-driven type producing a few thousand bottles. Instead, Murúa is the heir to the Muriel group in Rioja, a company that has experienced major growth in recent times but remains virtually unknown in Spain as 85% of its wines are sold abroad. 

In 2010, Muriel bought the Viña Eguía brand from Marqués de Arienzo as well as Arienzo’s winemaking facilities and wine stocks. Four years later, the Murúa family set eyes on the ancient cellars of Paternina in Ollauri (Rioja Alta) and its outstanding collection of old wines. More recently, they launched Pazo Cilleiro in Rías Baixas —its current production of one million bottles is sold almost entirely outside Spain. The group also includes Real Compañía de Vinos, a brand focused on entry-level, single-varietal wines sold under the VT de Castilla seal.

How do you explain Muriel to your clients?
We present us as a family group of wineries, each with its own identity, and a sound knowledge of the wine markets at both ends, from origin to destination.  

Despite producing over 12 million bottles, you keep a low profile in Spain.
Since the 1990s we have focused on export markets. At that time, the domestic market in Spain was quite mature but there was a lot to explore abroad. In terms of the competition, it was also easier for us. I must say that these days I feel just as comfortable abroad as I do in Spain. 

Historic family estates in Spain are being sold and there has been a recent spat of internal feuds i some of the leading wine families. Are these difficult times to run a family wine business?
Not really, but perhaps our way of working is slightly different. Rather than being a corporation with a pyramidal structure, we champion a horizontal model which allows us to take decisions very quickly. We all are involved in everything. My father feels more comfortable working inwards and overseeing grape supply, winemaking and production, whereas I’m more outward-oriented, but it is very important that everything is intertwined so as not to convey any discrepancies to the market. Both the trade and the distribution channels praise our flexibility and ability to provide value, quality and service. What we lack so far is consumer recognition. 

You joined the business in 2001.
Yes, but I’ve been sweeping the yard since 1994 (laughs).

In 2010 Marqués de Riscal purchased most of the vineyards of Marqués de Arienzo and you bought the winery and its stock of wines, the brand Viña Eguía and some of its vineyards. Are you happy with the deal?
Yes. In two years we managed to produce over 300,000 cases. Our goal with Viña Eguía was to increase volume because we had run out of room in Muriel. We had the connections, but lacked the stock of wines and production capacity in terms of grape supplies and barrel and bottle ageing facilities. Eguía also helped us to have a brand of wines aimed at bigger consumer markets.

What’s the price of your cheapest wine in supermarkets?
In Spain, Viña Eguía Crianza retails at around €5. We produce very few young wines, but you can find them for €4. In the UK, the Crianza range costs £6.99 and the Reserva  is £9.99.

In the world of wine, what is cheap or expensive is linked to supply costs, access to distribution and the channels you use. The distribution channel implies an additional cost of 25%. What makes a wine expensive or cheap are the channels and the ability to see a return on the facilities.

Let’s talk about third-party, private brands.
We are used to big volumes and an abundant grape supply that very few producers have in Rioja. We have made and still make wines for Sainsbury's, Tesco or Costco. They include exclusive brands and private or tailored labels for wine clubs. This is a profitable business that we offer to large clients. 

Does this not result in cannibalisation? 
Cannibalisation doesn’t exist. Consumers are perfectly aware of the difference between  a supermarket wine brand and a flagship winery brand because they coexist, just as they do in other sectors. On the other hand, each brand has its own distribution channel. 

Conde de los Andes and its outstanding collection of old Rioja wines stands at the other end of the market. What are your plans for these wines?
We see them as part of the heritage and history of the brands Conde de los Andes and Paternina and we are determined to preserve them. Our commitment right now is to lay down between 15% and 20% of our overall annual production and release it with further bottle ageing. And every year we release a limited number of bottles from old vintages that we think are interesting. 

The UK is your main market. Are you taking any measures against Brexit? 
We have been talking about Brexit for three years now but it still hasn’t happened. There was a turning point following the referendum with the devaluation of the pound and in March-April this year many operators increased their stocks ahead of a feared collapse of the customs system. But the pound has remained pretty steady during Theresa May’s negotiations with the EU and after her resignation. It is an issue that we are following very closely because we will have to react quickly to any changes, but right now no-one, not even Britons, know what is going to happen.

What do you think about the new classifications in Rioja? Are you planning to adopt any of the new categories?
At Muriel our ageing categories are tied to specific origins: grapes for the Gran Reserva are sourced from the oldest vineyards, both our own and our purveyors; the Reserva is made from grapes from Elciego and we are still thinking about whether to link the Crianza to a specific sub-zone like Rioja Alavesa. It’s likely that we won’t or perhaps we may have two different Crianza ranges. 

In your view, are ageing and land and vineyard categories complementary? 
I was told recently that 40% of UK consumers don’t really know what Rioja is. Spanish wines have a dominant position in the domestic market so information on local DOs is widely available. But the amount of information at the disposal of consumers in markets like the UK, where wines from all over the world are available, is overwhelming. Ageing categories are crucial because Rioja wines have relied on them for the last 50 years and each of them creates a perception in the market.

When someone makes a wine tied to a specific origin it is because the winemaker thinks that the origin is more relevant than the ageing time, but these two issues are not incompatible. If I consider that a wine made with grapes from Elciego performs better after three years of ageing, why should not I state that it is a Reserva?

You may also produce a single-vineyard wine, a Crianza, a Reserva and a Gran Reserva from the same property. The key is the vineyard, then comes the ageing categories, but what matters most is the fact that you are building diversity. Providing you are also growing different grape varieties, you could build an additional range or single-vineyard, single-varietal wines. 

What is best?  Whatever the consumer decides at any given time, or whatever the wine grower or the winemaker have decided that works best
If you had the chance to make a truly great Rioja, how would you approach it?
I think that great Rioja is the result of blending several plots. There are very few vineyards that show real consistence over time and many of them are tiny. We could release 300 bottles from one of the plots that is blended into our new Conde de los Andes Garnacha, but what would happen the following year? Eventually we may have to uproot the vineyard. No doubt that great vineyards make great wines but it’s important to think of what will happen in 25 years’ time.

Where would you like to see Rioja in 25 years’ time?
Creating diversity is key and Rioja can build it across the board. The region is big enough to have a major impact on the market, as big as some wine producing countries. In this context, zoning makes perfect sense and will allow to expand the range of wines. 

Do you think that Rioja has to produce all the styles: sparkling wines, international whites… Where is the limit? 
On the lower end of the market, entry-level wines must add as much value as possible because most people make a living from them —this is what supports the several thousand growers that tend vines in the region. Today, Rioja relies on the 75% of relatively cheap wines rather than on the remaining, more expensive 25%. 

Given the region’s market recognition, I am a big supporter of indigenous grapes. We don’t grow or produce Chardonnay nor Sauvignon Blanc. 

Are markets looking for international whites from Rioja?
Markets are no longer in the business of demanding. You offer and they buy. Professionalisation is the norm these days.

Why is there such a confrontation between those who defend blending wines and those in favour of single-vineyard Rioja wines?
There should’t be. Both models can live together. Rioja will not truly succeed until small producers stop seeing the big players as a threat and the big ones stop thinking of the small guys as competitors. Their markets are simply different.

But large producers have delayed zonification and small players have very little power in the Consejo Regulador.

While big wineries and their brands are well-established in the market, small producers are still in the process of building theirs. Great efforts were made over recent decades compared to what is expected to be done in just two years. Ultimately, big and small producers complement each other and their distribution channels are completely different. The most important thing is the quality that is delivered to the consumer.

For an external observer, disputes have become common in Rioja. Isn't there a big paradox between this situation and the fact that there have never been so many diverse and interesting wines in the region? 
Our position has always been the same: let us know what we can do and we will adapt to it. The problem is when confusion sets in the market. At some point people didn’t know if there were going to be village wines, subareas… or whether the new categories would be better or worse for the region. Information must be clear. If the different bodies within Rioja send contradictory messages, this has a negative effect on the whole sector. Once and for all, it is essential to define what is good for the market.

Is this possible in a context where players have opposing interests and sizes?
I think that if something is good and is true, it should be allowed. Our own interests vary significantly: at Conde de los Andes, we barely make 35,000 bottles while we also make 1.5 million Reserva bottles for a single client. Everything can coexist. In the end, the most important thing is the message you deliver for each of your wines.

Is Rioja a brand or a region?
Rioja is a truly established as a brand and that has made life easier for everyone in the business. However, new needs have arisen now and adventurous producers are willing to innovate and do things differently. Yet we insist in protecting ourselves without being aware that such inward look leaves us unprotected from the world outside. A case in point is the ageing indications: they generate costs but don’t serve as quality standards any more. Now the new regulation requires six months in bottle for the Reserva category and this is hurting small producers because they cannot sell the wine or release it to the market. But nobody says a word about quality. 

Do you think that promotional campaigns help to sell Rioja wines abroad
Absolutely. But I think that promotion should be linked to the support of the wineries themselves. If the Consejo Regulador provides marketing funds, producers should also pay into the budget. Free doesn't work anywhere. If you are not willing to invest in a specific country, don’t sign up for a promotional tasting just because it costs nothing.

Regardless of the price, Rioja has always managed to sell its stock. Promotional campaigns are effective and build awareness but value differs from wine to wine. Rioja helps to sell, but adding value is up to the individual.   

When single vineyards were being discussed, I asked whether funds would be allocated to promote the new category. We were talking about increasing costs to increase value, not added value. When you lower yields by 25%, your profit drops by 25%. Wouldn't it be better to charge one euro for each back label and use that money for promotional purposes?

Are not the new categories capable of creating added value? 
Yes they are, because of the diversity they generate, which is great. It is not just about the category but about the way village wines or wines from a specific area area defined. But what is the difference between a 33- and a 35-year-old vineyard [single vineyards must be over 35]? And why, even if that is not part of our strategy, a producer cannot make a range of village wines [right now, reserved to producers whose wineries are in the same village as the vineyards]? We are constantly establishing barriers for ourselves. 

What is the big challenge then?
Rioja has been fully developed as a brand. It is now time for individual brands to establish a name for themselves, yet persuading consumers to order a specific brand is really complicated.

The new generation of producers have developed many skills, have a better knowledge of the market and speak languages. Can this improve relationships and understanding among different players in Rioja or will size and personal interests prevail? 
We have to understand that new consumers are not loyal to any brand or region; they look for diversity. Our fight is not to gain market share within Rioja but to gain share from other regions. And this should push us all to share ideas and information.

Don’t you think that the new generations of consumers will demand specific Rioja styles rather than brands?
If this is so, we will have to adopt these styles and mention them on our labels, which is not a bad thing. 

Privately, which are your favourite styles of Rioja?  
Diversity is enormous and I like to choose different wines for different moments, but the complexity that results from the ageing process makes quite a difference. Many old vintages are just incredible and there are not many regions in the world that are able to age wines like we do or have our wine stock capacity.

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Rioja in the 21st century: styles and categories of wine
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