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Sherry: The Fino Things
Published:  02 January, 2014

Hamish Smith has been to Jerez to see whether renewed sherry optimism closer to home in the UK has translated into sales

IF MATURE BRITISH WOMEN became a little less mature and young Spanish drinkers’ habits a little more mature, sherry might actually live up to all the talk that it is in renaissance. That’s simplifying what is a diverse and divergent market, but the truth – setting aside the pockets of optimism in London’s sherry bars and New York’s restaurants and cocktail scene – is that, without its core consumer groups, the sherry category has been, and still is, in decline. 

According to the sherry Consejo Regulador (all figures), volume sales are just short of 40 million litres annually, and are in 1.7% decline (year ending September 2013). Sales have been shrinking almost linearly since the 1980s, when northern Europeans were younger and drinking their medium and cream tipples by the proverbial bucket that they had yet to kick. 

And on the other side of the sherry story – the dry styles traditionally drunk in southern Europe and in particular Andalucía – there is also a narrowing consumer base. As we know, the Spanish have been gradually moving away from wine, so sherry is a casualty of a wider crisis.

Spain’s moving annual total is running at a 2.4% decline and is heavily focused on the manzanilla and, to a lesser extent, fino styles.  “In Spain we have a big problem that youngsters have moved off wine – consumption is going down,” says Pedro Rebuelta, vice-chairman of González Byass. “They go from soft drinks to spirits. You have to show consumers how to appreciate wine. Sometimes they see it as a too complex thing.” 

Sherry, with its manifold styles that range from of the sweetest PX to the driest Amontillado, and production techniques that offer aromas of acetaldehyde (when the flor yeast is encouraged) and oxidation (when the wine is left exposed to air), needs more explaining than most. It is an acquired taste, but then the best things generally are. 

Beltran Domecq, president of the Consejo Regulador and sherry veteran of some 43 years, explains how the sherry industry has evolved to where we are now: “Due to demand in the 1970s there was an overproduction of sherry, people started to sell sherry at an incredibly low price. Only now have we got the right level of supply vs demand.” 

According to González Byass, its harvest this year saw an a bumper yield of almost double 2012 but, unlike other wines which can suffer year-to-year supply/demand shifts, Jerez’s solera system means imbalances tend to be revealed over longer periods.

But, with the bad news done, let’s now indulge in the good news stories of sherry. First of all, we can say that the global volume decline is slowing. If the current down-trading is at 1.7%, things have come a long way since the 7.9% drop the year before. So perhaps events such as Sherry Fest in New York and Toronto and London’s Sherry Festival and Great Sherry Tasting – this year the largest sherry tasting ever – and the education push by companies such as González Byass will have had an impact (more on this later). 

Domecq, whose job it is to promote the sherry category, has been in his role for 18 months and says with genuine excitement that he is seeing “incredible interest” among the world’s more sophisticated restaurant and bar scenes. 

Domecq says that to “gently increase sales” there are two major action points: communicate sherry’s point of difference from other wines, its wide diversity and inherent quality and to raise its prices to a level befitting that description.

The UK

Ever since the UK started importing sherry in the 15th century (and struggled to pronounce the word Jerez so renamed it after the Moorish Sherez) it has remained, unremittingly, the industry’s top export market. It seems the two cannot be separated and sherry’s future could yet be shaped on whether London’s latest sherry trend fizzles out or ignites. 

Young, trendy Londoners have cast away the image of their grandmothers to embrace the drier sherry styles of fino, manzanilla, oloroso, amontillado and palo cortado. The consumer trend has been driven, perhaps symbiotically, by a group of sherry bars, eight of which were involved in last month’s Sherry Trail, organised as part of the Sherry Festival by the Sherry Institute. 

For a country that traditionally saw sherry through cream-filled glasses, this is a symbolic breakthrough. Domecq seems as surprised as anyone. “The fact is that fino and manzanilla have started to do well in the UK – people would never thought to sell these in the UK in the past.”  

Peering past the anecdotes of consumer media to the picture by numbers, we can see there is definite movement. Dry styles constituted 17% of all sherry consumed in September, which, for the UK, is significant. 

There are two readings of this. On the one hand as sweeter sherry drops in popularity, dry sherry’s share naturally increases, even if sales stand still. But also it could be argued that these are two distinct styles, drunk by distinct consumer groups, so any analysis of the category as a whole is flawed. Cream sherry’s decline could be masking dry sherry’s meteoric rise. 

González Byass, which sells more sherry in the UK than in Spain, has come to accept the sales decline of its Pale Cream Croft brand but Pedro Rebuelta maintains that is no reason to be downhearted. “There will continue to be a market for sweet styles in the UK. At Croft we are trying to maintain the typical 40 to 50-year-old woman who drinks sherry as a comfort drink. So we have to look at the new women entering that age. We are doing tastings in garden centres. The Green Spot is the slogan. These activities are to maintain rather than have a radical impact.” 

Meanwhile Rebuelta reports that Tio Pepe, its fino and flagship, is on the up in the UK. “It’s the sherry with the most international distribution, with 110 markets,” says Rebuelta. “We have worked very hard to have to have Tio Pepe in all the top restaurants and hotels worldwide. Of González Byass’s sherry brands it is the most important.”

Rebuelta says the group’s sherry volume and value sales are relatively stable. “Sherry will continue to lose volume but pick up in value,” he predicts. “Big volumes of cheap sherry will disappear and we will focus on the speciality, quality sherries. The UK market is driving this trend. In London the trend is still small but small trends open markets. We still have a way to go but it is only a question of time.”

Harveys, which is owned by Beam, sells 65% of its product in the UK, a market which measures 1.12 million 9-litre cases by volume and is worth £90m, says Maxxium, its UK distributor.

Maxxium says Harveys has a 22% volume and a 26% value share. Sales are 5% down this year so, much like at Croft, Maxxium’s marketing controller Eileen Livingston says the “focus has been on stabilising the core Harveys Bristol Cream brand”.  

The recent campaign Harveys’ Half Hour has targeted 30 to 60-year-old females with the suggested serve of Harveys over ice with a slice of orange. 

Livingston says she is aware of interest in the drier styles in London and reports that part of Maxxium’s strategy is to move Harveys Bristol Cream consumers up the Harveys range to its fino, amontillado and Pedro Ximinez styles. “There has been a recent trend towards fino and tonic in the UK, which is similar to younger drinkers in Jerez drinking dry sherry with Sprite. But [in terms of sales] we haven’t seen the signs yet. That could be because, in the on-trade, sales are more fragmented, with interest in smaller brands. I would love to see a rise in our fino sales and see consumers revitalise the sherry category.” 

Food

“The future for sherry is with food,” says Domecq. “We do not expect people to drink sherry with every meal but we have to get away from the image of an old lady pouring last Christmas’s sherry into a thimble glass.” Domecq adds that, while communicating sherry’s spectrum of styles is difficult – as there is no clear image of what sherry is – its diversity can be flaunted when it comes to food.

From the bone-dry, flor-aged finos and amontillados through to the PX, which is essentially a dessert in itself, sherry has the styles to dance to anyone’s tune. The natural partner is, of course, tapas but Domecq says other cuisines complement sherry just as well. He says the Japanese have taken to fino in a big way, as an accompaniment to sushi and sashimi, while smoked salmon and fish stews can also work well with the fortified wine.

Roccio Osborne, from the international department of sherry company Osborne, also sees a future for sherry with food. She reports to have successfully shown that sherries can complement the troublesome trio of asparagus, artichoke and vinegar and says the New York restaurant scene is where it’s at as far as sherry and food matching goes. She cites Sherry Fest as having made an impact on New York’s tastes and says on a brand level she has hosted talks and masterclasses.

Much of the training she does revolves around simple advice such as storing sherry as a wine, not a spirit. “We are trying to train people to not drink sherry at room temperature. Amontillado and oloroso should be chilled to 12-13° and Fino 6-7°.” Another perception is that fortified wines have high abvs. “We are also trying to show people that 15% abv is not that high,” says Osborne. “In Australia and southern Spain wines have similar abvs to sherry.”

For Rebuelta “the big issue is the glass size in the on-trade”, which still to this day is often smaller than a regular wine glass. “For many years we have sold sherry as an aperitif in a small glass when a glass of Chardonnay is far bigger. Consumers will have just one glass if it’s an aperitif. That’s what we have to change. We have to have a fino with our first dish.”

Cocktails

Sherry certainly doesn’t suffer from its ‘aperitif’ tag in the open-minded world of cocktails. In fact, judging by recent cocktail competitions attended by Drinks International, bartenders are in love with the wine because of its varying uses. 

Rebuelta says he has noticed the trend towards sherry in cocktails particularly in New York – an observation echoed by Osborne, who says “it’s insightful to see what mixologists are doing with sherry”. For some of that insight, see How to Mix with Sherry (box, previous page). 

In Spain, it is a type of cocktail, albeit a basic one, that has driven sherry sales, particularly of manzanilla and fino, over the past few years. Osborne reports that the Rebujito serve is made with one part manzanilla and three parts 7 Up/Sprite, with some mint leaves. “It’s pushed by the manzanilla producers at the flamenco fairs, where consumption is huge. Manzanilla producers were the first but it’s an opportunity for fino too.” 

Price

“Sherry is a cheap category,” says Rebuelta. “Our wines are undervalued and we have to bring the price up. You have to take the strategy that you can go up little by little and take a long-term view. But price is not the only problem – it is working on the image too. For that you have to work with the trade.” 

And that’s exactly what González Byass has been doing, not least through its Tio Pepe Sherrymaster events, which have been attended by international wine writers. This year’s three-day course in Jerez saw tastings of some of the world’s oldest and rarest sherry and exhaustive seminars on production styles and techniques. 

For Domecq, it is a similar tale. “The price of sherry has not moved for 20 years,” he says. “How do I tell sherry’s story when consumers go into the supermarket and see the price – they will think I’m lying.” 

Indeed, sherry above all categories should understand about consumer perception. Sales may still be waning, but if the latest figures offer a glimpse into the future it is that the category is stabilising and showing shoots of recovery. 

In sherry, the drinks industry has a unique product, with heritage, provenance and craftsmanship all wrapped up in a bottle that is sold for as little as Ä5. It seems counter-instinctive to make the argument for a category in historical decline, but producers may actually gain customers in the long term by raising their prices.