Pop the bubbly? Spain’s cava takes milder pandemic punch than anticipated

2/2

© Reuters. FILE PHOTO: Bottles of cava are showed at Vilarnau cellar during the coronavirus disease (COVID-19) outbreak in Sant Sadurni d’Anoia

2/2

By Joan Faus

BARCELONA (Reuters) – With bars and restaurants shut for months in parts of Spain and tourism drying up due to the coronavirus pandemic, the country’s 1.2 billion-euro ($1.46 billion) cava wine sector had been expecting a devastating year.

But early projections of an up to 40% collapse in sales proved overly pessimistic, with producers of the bubbly drink expecting the year-end holidays to further dilute the impact on the industry led by brands such as Freixenet and Codorniu.

Geographically-diversified exports and growing online trade targeting home-based consumption have kept sales decline to just over 10%, signalling a potential template for other hit-hard sectors in the battered economy.

“No one desires a fall, but I’d even say it’s a pretty good result considering the context,” Cava Regulatory Board Chairman Javier Pages said.

Shipments of cava – mainly made in the northeastern Catalonia region – fell 10.5% in January-September from a year ago, with a steeper 13% drop in domestic consumption than abroad, of 7%, Pages said.

He hopes numbers will improve during the festive season, traditionally the best period for cava sales, even if dampened this year by a 10-people limit on gatherings per household and with most corporate parties cancelled.

Damia Deas, chairman of AECAVA business group representing 90% of the sector’s revenue and manager of the Vilarnau brand, in May forecast sales could fall between 25% and 40% in 2020 from the 250 million bottles shipped in 2019: the second-best year ever.

“No doubt, it’s a terrible year…We had prepared for the worst but our sector has been able to resist a bit better than we thought thanks to exports,” said Deas, citing a good standing in Britain, Sweden and Holland.

About a quarter of the over 200 producers still have staff under furlough schemes, he said, adding that those who export less are more affected than others.

“I believe 2021 will be a year to stabilise the ship and from 2022 we start thinking about growth, expansion and investment,” Deas said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Comments are closed.