The challenges of the Canary Islands’ wine sector and its implications: A longitudinal study

              © PASOS. Revista de Turismo y Patrimonio Cultural. ISSN 1695-7121
Vol. 10 Nº 3 págs. 345-355. 2012
www.pasosonline.org
The challenges of the Canary Islands’ wine sector and its implications:
A longitudinal study.
Abel Duarte Alonso i
University of Western Sydney (Australia)
Yi Liu ii
Curtin University (Australia)
i Ph.D., Researcher and Lecturer, University of Western Sydney, School of Management. Australia. E-mail: a.duartealonso@uws.edu.au
ii Candidate at the Curtin Business School, Curtin University, Western Australia. E-mail: Yi.Liu@curtin.edu.au
Abstract: News and reports acknowledge the challenges that Spanish wine regions are facing, including the Canary Is-lands,
where wine designations of origin (DOs) have existed for less than two decades. The present study extends from
preliminary research conducted on the islands’ wine industry to delve into the developments that continue to unfold in the
archipelago’s wine sector. Winery owners, wine makers and managers of 55 wineries located in the six wine producing
islands participated in face-to-face and telephone interviews. The general view among participants is of serious concern,
and there appear to be very few short-term solutions for current challenges. Different implications are drawn from the
findings, including those concerning the future of the local wine sector, its wine culture, and tradition..
Keywords: Wine; Wine sector; Winery operators; Challenges; Canary Islands.
Título: Los cambios en el sector vinícola de las Islas Canarias y sus implicaciones: un estudio longitudinal.
Resumen: Noticias y reportajes reconocen los retos a los que las regiones vinícolas españolas se enfrentan, incluyendo las
Islas Canarias, donde las denominaciones de origen (DO) existen desde hace menos de dos décadas. El presente estudio es
una extensión de una investigación previa conducida en la industria vinícola de las islas, y profundiza en los hechos que es-tán
ocurriendo en el sector vitivinícola isleño. Dueños, enólogos y gerentes de 55 bodegas de seis islas que producen vinos
participaron en entrevistas cara a cara y telefónicas. El sentimiento general entre los participantes es de seria preocupación,
y los problemas actuales no parecen tener soluciones a corto plazo. El estudio presenta las posibles repercusiones de los
resultados del estudio, incluyendo aquellos pertinentes al futuro del sector vitivinícola local, su cultura vinícola y tradición.
Palabras clave: Vino; Sector vinícola; Operaciones vinícolas: Cambios; Islas Canarias.
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Introduction
Despite the almost unique characteristics of the Ca-nary
Islands’ wine sector, its very long history and the
archipelago’s current strategic positioning as a tourist
destination, including its potential for marketing wines
and wine tourism to the millions of visitors, only recently
have academics started to gain interest in the local wine
industry and associated themes. While this academic
interest has been translated into exploratory investiga-tions,
only few studies attempt to follow the evolution and
development of the local wine sector using a longitudinal
approach. This approach is especially important given the
fact that designations of origin (DOs) have been establis-hed
for less than two decades in the archipelago and the
numerous difficulties that the sector is experiencing, with
potential implications for the islands’ wine culture and
tradition.
The present study seeks to build on these previous re-search
efforts to shed light on the ongoing issues affecting
the local wine sector. In this context, and several years
after the first studies, the perceptions of the local winery
owners, managers, and wine makers are gathered to ad-dress
the following overarching research questions (RQs):
RQ1: In general, what are the major challenges that
a) The local wine sector, and
b) Individual wineries face?
RQ3: What are the implications of these challenges for:
a) The local wine sector?
b) The local tourism?
c) The preservation of the islands’ landscape, or that
of its wine culture?
Given the different crises the local wine sector has
experienced since 2007, when the first studies were con-ducted,
but particularly since the global economic down-turn
in 2008, answers to this question could identify new
developments or recurring issues taking place in the last
few years. Information from the perspective of those ‘wine
stakeholders’ directly involved in wine production (winery
owners, managers, wine makers) could provide useful in-sights
in regards to:
The implications of those challenges,
The ways wineries are coping with these issues, and
The opportunities that might exist despite the current
challenges.
Overall, this information could also be very valuable to
the wine sector in other regions and countries, as well as
other rural sectors that may be facing similar challenges.
Literature Review
The constant dilemma of marketing the wine product
For thousands of years, the wine product has been an
important, even a key component around dining tables, in
special occasions, or even in rituals. Today, the significan-ce,
the role, or even the consumption of wine are encoun-tering
growing challenges. Some examples of these cha-llenges
include the fierce competition of other beverages,
changes in consumer tastes and choices, and the massive
marketing movement, whereby financial investments are
made to raise the appeal and capture consumers’ atten-tion
about foods and many other products. Wine’s role has
also been undermined within the wine sector, as thou-sands
of brands, some of which are from the same winery,
are competing for space in the shelves of liquor stores,
supermarkets and other outlets/businesses.
To counter this situation, several elements, such as
brand personality (Boudreaux & Palmer, 2007), emotion
marketing, product quality, customer service and fair pri-cing
(Novak et al., 2006), have been considered as useful
tools to facilitate wine purchases. Jenster and Jenster
(1993, in Felzensztein et al., 2004) identified personal fa-miliarity
as the most important criterion for buying wi-nes;
they also noticed that curiosity was a factor among
some consumer groups. Such curiosity and interest in
consuming different wines may also suggest opportuni-ties
for wineries, in particular for those located in regions
accessible to tourists/visitors. In this context, in the last
few decades, the concept of wine tourism (Getz & Brown,
2006; Hall et al., 2000) is presented and discussed as an
additional leisure activity (demand side), and as a mar-keting
vehicle facilitating wine sales (supply side), thus,
creating long-term winery-consumer relationships, poten-tially
leading to additional sales and consumption.
An existing body of research investigates marketing
strategies for wineries to achieve sales, consumer loyal-ty,
and long-term sustainability. However, despite this
knowledge, and while arguably today there are fewer ba-rriers
to exports wines (Hussain et al., 2008), many wine-ries
are still struggling to sell their product. The current
economic downturn, wineries’ weak marketing strategies
(e.g., lack of consumer knowledge), or consumers’ prefe-rences
in light of overproduction or wine glut occurring
in some regions (Adams, 2010) may all affect consumer
choices to purchase certain wines.
Recent information from the International Organisa-tion
of Vine and Wine (OIV, 2010) indicates that wine con-sumption
has decreased in seven of the 12 leading wine
consuming nations. Ironically, such phenomenon, and
even a decrease in wine production, is noticed in Italy,
France, and Spain, three of the world’s top producers and
consumers (OIV, 2010). This situation may force hospi-tality
and other businesses in these countries to adapt
to changing consumer demands, that is: offering other
beverages at the expense of the wine product, potentia-lly
aggravating the problems in the wine sector. At the
same time, a decrease in wine production may mean the
further ‘natural selection’ of many wineries, and a much
more competitive environment, where increasingly wine
quality and value-for-money partly- or entirely- dictate
some consumers’ preferences.
As is the case of other rural sectors, the wine sector
is composed of mainly small and medium wineries and
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vineyards owned and operated by only a handful of peo-ple.
Many of these small businesses lack the resources to
invest in promotional and other strategies to reach cer-tain
consumer segments, and ‘convert’ the end consumer.
Therefore, as Chaney (2002) indicates, support is critical
where the local wine sector is composed of a large number
of small wineries. Chaney (2002) also explains that small
wineries often act “…without a generic voice”, and “... are
reliant on members of the distribution chain passing on
relevant information” (p. 35). Thus, generic campaigns
can be a very important tool to promote many small wine
producers and their brands “under a recognisable um-brella”
(Chaney, 2002, p. 35). This strategy may greatly
depend upon a concerted effort and agreement among wi-neries
and local associations. However, given the many
thousands of wine labels in many countries, including
traditional wine producers such as Italy, France or Spain,
consolidating wine labels under such umbrella may be a
very challenging task.
The case of the Canary Island’s wine sector
As other archipelagos in other regions, the Canary
Islands have for a long time benefitted from its mild
weather and relatively low-budget tourist packages gea-red
towards the large tourist market of continental Eu-rope
and the British Isles. Accordingly, the image of this
archipelago has often been associated to that of a destina-tion
of budget and group holidays. Today, with the addi-tion
of hundreds of new tourist destinations worldwide,
including additional mass-tourism holiday resorts, the
once almost undisputed supremacy of the archipelago as
a certain choice for millions of European visitors has, if
only in part, been challenged. With a weakening tourism
sector (El Día, 2009a) as a result of recent global crises,
the vulnerability of the Canary archipelago has been ex-posed
in different fronts. The collapse of the construction
sector (Bore, 2008) has further dented the prospects of the
local workforce that in thousands of cases is dependent
on tourism and other service orientated sectors, including
jobs in the local hospitality and transportation sectors.
According to news reports (El Día, 2009b), some 20,000
businesses in the archipelago, and 300,000 in all of Spain
ceased their operations following the latest economic
crisis of 2008. The Canary Islands’ geographic isolation
and lack of sufficiently large alternative industries have
aggravated existing problems, leading to a much more
evident deterioration of the job market. Recent reports
(Noticias Gran Canaria, 2010) suggest that almost three
out of ten individuals from the active population (26.9%)
are without work. Problems have also affected many of
the archipelago’s rural sectors (agriculture) and sub-sec-tors,
including that of wine grape growing. The effects of
the current crisis has, for instance, aggravated problems
(lower sales, lower consumption) that the wine sector was
trying to recover from (see, for example, Scherrer et al.,
2009), including devastating heat waves (El Día, 2007)
and, more recently, fires in some of the islands’ regions
(El Día, 2009c) .
Amidst all the current problems, there are however
reasons suggesting opportunities for many grape growers
and winery operators. In fact, the local wine sector has
come a long way from simply focusing on growing grapes
to make wines for household consumption to being ack-nowledged
internationally (Feo, 2007). In this more tra-ditional
process, low-quality, bulk wine was produced to
supply local restaurants and bars, including the ‘guachin-ches,’
traditionally known as casual (not licensed) bars or
eateries, often set up in households (Jolonch, 2007). This
‘informal’ way of household wine production and con-sumption
continues today in many rural environments
of Tenerife Island. The establishment of designations of
origin (DOs), the first of which was in the 1990s (Tacoron-te-
Acentejo, 2010), has also allowed Canary Islands’ wine
regions, as well as other Spanish wine regions to create
new wine labels and therefore a geographical wine iden-tity
(Martínez-Carrasco et al., 2005). The establishment
of DOs also means rigorous quality, hygiene and safety
regulations, or a requirement to grow local grape varie-tals,
clearly contributing to the professionalization of the
sector and to its potential future competitiveness. Today,
there are ten DOs in six of the seven islands (Pérez-Maga-riño
et al., 2004) that produce wines commercially.
The Canary Islands’ wine sector is very unique in se-veral
ways, including importance in the form of a long
history of wine culture and tradition among members of
the local population. For example, arguably because of its
ultra-peripheral location, that is, geographically distant
from continental Europe, the archipelago was spared from
phylloxera, a pest that devastated much of Europe’s vines
in the 1860s (Bisson et al., 2002; Granett et al., 1991).
Escaping or avoiding this unfortunate event has proven
crucial for the preservation of grape varietals introdu-ced
many centuries ago that today form the bulk of the
local wine production of the different islands. Varietals
that may be totally unfamiliar to international sophisti-cated
wine connoisseurs such as baboso negro, forastera,
Listán blanco, Listán negro, marmajuelo, and negramoll
(Tacoronte-Acentejo, 2010; Moreno et al., 2007; López et
al., 2003) are either only commercially produced in the
Canary Islands, or their production elsewhere is marginal
because of their limited commercial viability (Moreno et
al., 2007).
While production of Canary wines is very small in
comparison to other Spanish wine regions such as Rioja or
La Mancha, the special characteristics of wines of this re-gion
could nevertheless be targeted and marketed to seg-ments
of its large ‘audience’ of yearly visitors (Alonso et
al., 2008; Scherrer et al., 2009). Despite the fact that most
tourists may travel to the islands on a low budget, several
consumer segments interested in wine consumption may
be identified within the approximately nine million yearly
visitors (Canary Institute of Statistics, 2009). Furthermo-re,
to a great extent, prices of many of the local wines are
affordable, that is, ranging between five and ten Euro (€)
per standard bottle at local stores and wineries. The case
of the Canary Islands, a territory with a tourism industry
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established several decades ago, and an ancient wine in-dustry
and tradition, has increasingly drawn the interest
among academics investigating different aspects of local
tourism and its culture and traditions, including that of
its unique wine sector. For example, Alonso et al. (2008a,
2008b), Scherrer et al. (2009) and Sheridan et al. (2009)
conducted exploratory studies in 2007 seeking to address
those areas, as well as the difficulties local wineries face
in light of contemporary issues such as the islands’ insu-larity,
or the competition within the global wine sector,
resulting in cheap wine imports.
The present study builds upon and follows up on this
previous exploratory research, by delving into the cha-llenges
that many small and medium sized wineries are
facing due to the current crises, the implications of the-se
challenges, and the potential opportunities that might
exist despite the ongoing issues.
Methodology
While the main theme of the present study focused
on the major challenges winery operators currently face,
other areas, including those concerning the environment
(climate change), or winery operators’ (owners/managers)
business philosophy were also studied. An initial contact
with several of the Canary Islands’ DOs suggested that
the approximate number of wineries that have adhered
to those DOs nears 200. Using the websites of all ten DOs
currently established, in May of 2009 the contact details
of 188 wineries were identified. Letters and emails were
sent to these operations, briefly summarizing the objecti-ves
of the study and asking winery operators to participa-te
via face-to-face, or telephone interviews in the case they
could not be reached in person.
Several decisions were then made regarding a) the
methodological approach to be used for the data collec-tion,
and b) the starting point for the data collection pro-cess.
First, in line with previous studies conducted on the
Canary Island wine sector (e.g., Alonso et al., 2008; Sche-rrer
et el., 2009; Sheridan et al., 2009), it was decided to
use face-to-face and, if necessary, telephone interviews to
gather data. In addition, given the very scattered nature
of several of the archipelago’s DOs, it was believed that
sending paper questionnaires or gathering responses via
online questionnaires may not elicit the number of res-ponses
expected.
Instead, because of the large number of wineries (over
120) on Tenerife Island and the existence of five of the
archipelago’s DOs within its confines, focusing on this is-land
first was believed to allow for maximizing responses
without the need to invest more resources (time and/or
budget) to travel to all six islands that currently are home
to at least one DO. Because of the convenience of easy ac-cessibility
to the neighbouring Gomera (13 wineries) and
La Palma (18 wineries) it was also decided to approach wi-nery
operators face-to-face to gather data in these islands.
At the same time, operators from the around 40 existing
wineries in the other three islands (Gran Canaria, Hierro
and Lanzarote) were to be interviewed by telephone.
In June of 2009, follow up contact was first establis-hed
with wineries on Tenerife, Gomera, and La Palma.
This contact allowed for a) confirming whether operators
had received the preliminary information about the stu-dy,
and b) inviting operators to take part in the study.
All the contacting efforts allowed for the acceptance or
agreement from 55 winery operators; 44 of these were in-terviewed
face-to-face, ten over the telephone and one res-pondent
who could not be reached participated by email.
On average, face-to-face interviews lasted 45 minutes and
telephone interviews lasted 15 minutes. All these inter-views
were recorded and saved as electronic audio files,
then transcribed verbatim and translated from Spanish
into English. To analyse the data, content analysis was
used. Data management software packages (e.g., NVivo
2.0) were considered; however, Microsoft Word (MW) was
used in the process of separating and saving the different
threads and themes that were identified in respondents’
answers and comments. Finally, respondents’ answers
were labelled using letters and numbers, for instance,
Respondent 1 was referred as ‘R1,’ Respondent 2 as ‘R2’
and so forth.
Results
An area that became obvious in respondents’ com-ments
relates to the impacts of the economic crisis on the
archipelago, including the dramatic increase of unemplo-yment
in local businesses and institutions. As a result,
this serious issue was having several repercussions in
the local population (e.g., less disposable income), and in
turn was affecting wineries’ efforts to sell their product.
Additionally, in the case of several wine grape cooperati-ves,
with hundreds of very small grape growers supplying
grapes for a unified wine label, the deteriorating economic
climate was preventing growers from cashing in for their
hard-earned grape supply:
R1: “We are a cooperative of grape growers and we
have been trying to deal with a number of problems
we have inherited. For instance, we have accumulated
a large debt... when we started managing this winery,
we found out that grape growers had gone unpaid for
several harvests [i.e. for several years].”
R2: “For the last two years the cooperative’s grape
growers have not received payment for their crops. The
benefits have dramatically decreased and there are
consequences for the growers who then are not able to
receive any money within the year after they harvested
[their grapes]...”
R3: “We took over an entity [council winery] that was
heavily indebted, where grape growers had not recei-
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ved any money for their crops for years, and with a
weak structure for marketing and promoting its wines.
We are here to reverse the tide and make the best of this
winery. We certainly have the pedigree to do so.”
While the current economic downturn was indeed one
major concern, in their comments respondents mentio-ned
environmental and other problems that were equally
affecting their business. The comments also illustrated
the fundamental goal for some operators: essentially,
weathering the current difficult economic situation their
winery businesses were facing:
R4: “Our challenge this year is to survive. Right now
there is a very fragile balance, and any negative situa-tion
could tip that balance towards the ‘unsustainable.’
For example, if we had a heat wave like the one two
years ago that destroyed 50% of our harvest we would
be in a very dire situation.”
R5: “Our main challenge is to stay afloat: keep the mar-ket,
be able to sell, survive in this competitive environ-ment.”
R6: “The current economic crisis is probably the main
challenge. We depended too much on the construction
sector and now with its collapse there has been a domi-no
effect on banks, loans, etc. Banks are worried becau-se
they lack liquidity, and are concerned with recupe-rating
money they lent. And here in the Canaries we do
not have large industries or valuable raw materials to
cope with these crises...”
In speaking of the impacts of the seriously affected lo-cal
construction industry, one operator (R7) for instance
identified the implications that this event was having for
the wine sector, especially because local bars are part of
“... a sector related to the construction sector, as many
workers have breakfast at bars and may consume wines.
Many bars have felt the pinch of the collapse of the cons-truction
sector. Before you could see so many bars filled
with construction workers and much of the wine now re-mains
unsold. Now bars need to find other segments to
consume their wines; it is a challenge to ‘convert’ new seg-ments
of the population.” Consequently, the execution of
marketing efforts could be critical for wineries’ survival.
However, as previous studies have identified (e.g., Sche-rrer
et al., 2009; Sheridan et al., 2009), the difficulties of
marketing their wines also became obvious for many res-pondents
in the present study:
R8: “Right now it [the challenge] is the economic crisis
and wine sales... seeing it here at our winery and at
other local wineries that feature award-winning wines,
of high quality... we are not selling our wines. People
do not have money and there is no predisposition to
spend money...”
R9: “Right now selling one’s wines is a challenge; it
is difficult to sell your wines. Also, the weather is not
helping; this year I will not be harvesting 50% of what
I was expecting.”
R10: “The first challenge is the commercialisation of
wines, to continue penetrating the market, trying to
consolidate our brand, but in all fairness having ow-ned
the winery for less than seven years I do not believe
we should be talking about a ‘brand’ unless we are [the
winery is] at least ten years of age.”
R11: “The main challenge is to increase our marketing
efforts; we want to solidify our presence in segments
that we have not fully penetrated yet, and we want to
have clients outside the archipelago, exporting wines
overseas.”
This last comment demonstrates an intention to aim
outside the archipelago’s boundaries, beyond the local
consumer market. This strategy would not be new for
the islands. Indeed, there is a very long and well-docu-mented
history illustrating the archipelago’s background
as a wine-exporting region. Already in 1660, vineyards
were already part of the Canary Islands’ rural landsca-pe,
growing alongside other produce such as sugar cane
(García Fernández, 1999). In particular, the Malvasía wi-nes
became a much-sought product, and in the following
three centuries, the Canary archipelago became a wine
exporter (García Fernández, 1999). The strategic geogra-phic
location of the islands was an additional important
factor boosting its wine export capabilities, as the archi-pelago
was an almost mandatory stop for commercial
ships, adventurers, and even pirates. These groups then
became acquainted with Malvasía wines and spread the
word about Malvasía’s prestige and fame (García Fernán-dez,
1999). Not surprisingly, for a long time, wine became
the main source of wealth for the islands (García Fernán-dez,
1999), clearly demonstrating the very strong links
between wine, the archipelago, its history, culture, and
economy.
Several centuries later and in different ways, tourism
has brought the islands back onto the international stage.
However, wine’s presence, and that of local vineyards can-not
be ignored, as they are a significant element in much
of the Canary Islands’ landscape. Since the inception of
DOs, many local wines have won awards at insular, na-tional,
and international level (García Fernández, 1999).
Hence, albeit not as splendorous as several centuries ago,
there is much potential for the local wine sector to make
gains in present times, particularly given the long tradi-tion
and previous key role of the archipelago as a wine
exporter, and its current popularity and important role as
one of Europe’s main tourist destinations.
According to Martín de la Rosa (2003), culture and
tourism are not mutually exclusive; instead, they are
“realities that converge in the day-to-day activities of nu-merous
actors” (p. 156, translated from Spanish). Martín
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de la Rosa (2003) reflects on the growing importance that
learning about other cultures has among some segments
of travellers. As a result, some local entities (tourism and
government agencies) are promoting the importance of
maintaining alive the ‘authentic character’ of some cul-tures,
including through patrimony, fairs, rituals, gastro-nomy,
handcrafts, or by maintaining traditions (Martín
de la Rosa (2003). In the Canary Islands, these aspects
are not only featured in many local celebrations and festi-vities,
but also practiced by local groups eager to maintain
different local traditions.
Alonso et al. (2009) addressed this aspect of the is-lands’
cultural patrimony and authenticity when they
investigated the different hardships experienced by local
artisans, food confectioners, and even winery operators
in light of contemporary changes. Overall, an argument
could be made with regards the potential that the islands’
wine culture and tourism provide to form a natural sym-biosis
that might lead to beneficial outcomes for many of
the islands’ wineries and other businesses. In turn, these
elements are directly related to the islands’ local tradi-tions.
In discussing the significance of the ‘Silbo Gomero’ (La
Gomera whistling language), a peculiar ancient practice of
some of La Gomera Island’s inhabitants, Plasencia Mar-tín
(2007) refers to ‘tradition’ as a set of elements known
and practiced through the imitation of customs, models,
values and behaviours, and passed on from one genera-tion
to the next (p. 32, translated from Spanish). Howe-ver,
Plasencia Martín (2007) explains that ‘true tradition’
is not only limited to these processes. Indeed, tradition
also implies the act in which a community learns about
itself and becomes self-conscious of the ‘real’ continuity
of its history and vocation (Plasencia Martín, 2007, p. 32,
translated from Spanish). In the context of the islands’
wine sector, its culture and tradition, an overall heighte-ned
self-consciousness of wine’s value, significance, and
even commercial potential among members of the local
wine sector could also trigger strategies and actions. Such
increased self-consciousness could be especially positive
in enhancing the currently weak links between the wine
product and the islands’ burgeoning tourism industry.
Changing consumer trends
Other challenges that respondents mentioned were
partly aligned with the few studies conducted in the Ca-nary
Islands, especially regarding the decrease in wine
consumption among local consumers. Alonso et al. (2008a)
for instance identified that several winery operators attri-buted
decreases in sales to anti drink-drive laws that had
discouraged winery visitors or restaurant/bar patrons
from travelling and consuming wines at cellar doors and
local restaurants, respectively. In contrast, in this study
only two respondents made direct reference of this issue,
while others did not directly refer to the severity of anti
drink-drive legislation, but instead to demographic and
preferential changes in the beverages of choice among lo-cal
consumers:
R12: “Wine consumption is going down and I think
it has a lot to do with costs. For example, people can
drink several beers for the same price they would pay
for a bottle of wine, and they would be consuming less
alcohol. I believe restaurants and beer companies are
now making more sales than before at the expense of
wine. People perceive the price of wine as higher.”
R13: “Our main challenge is that the local wine con-sumption
does not decrease any further. The main ene-my
of our wines is imported wine... We have had some
cultural changes that have affected consumption pat-terns;
whereas people in rural areas used to drink wine
at the table and eat altogether as a family. Now house-hold
members eat on their own and whatever they find
to eat and the tradition of wine consumption, apart
from the parents or grandparents does not appear to
be common among the younger generations. Also, bu-ying
wines at restaurants, in view of the mean income
on this island, can be very expensive for the average
citizen...”
For a different respondent it was more a generational
change that was having a serious impact on wine sales
and consumption (R14): “If we had a crisis I would not see
so many bars full of people drinking beer because a crisis
would be similar for those who drink beer or wine. Thus,
I do not believe that the [wine] sector’s problems are due
to a crisis; it is consumers’ mentality that has changed.
Something should be done for consumers to return to drin-king
wine... people are buying beer; hence there is a change
in people’s [consumers’] mentality.” Together, these pro-blems
may threaten the continuation of a wine culture
and tradition of wine making; as one responded noted:
R15: “Wine consumption on this island has dropped dra-matically.
Therefore, there is little motivation to continue
planting, growing, and achieving a good wine production
when in the end you cannot sell the wines you produce.”
The quality of the wine product
In order to gain back consumers, several comments
were in agreement that producing quality wines was the
way to go; this in itself was a key issue, as one participant
(R2) indicated: “One fundamental challenge is to continue
producing quality wines in the future”. In fact, as the fo-llowing
comments demonstrate, the challenge of achie-ving
high quality in the local wines was the second major
theme that emerged among participants:
R11: “...we need to continue improving our vineyards;
progressively, we are working less at the winery and
much more at the vineyards. We need to optimise our
work at the vineyards in order to produce better gra-
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Abel Duarte Alonso and Yi Liu
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pes.”
R16: “Our main challenge is to continue maintaining
the quality of our wines or even improve it. We recently
planted new vines and we want to obtain less quanti-ty
at the cost of more quality, and of course: we want
to continue maintaining our wine sales, and continue
paying our grape suppliers on time year in year out.”
R17: “Definitely, [our challenge is to] continue im-proving
the quality of our wines; continue working
towards this goal because there is always room for im-provement…”
R18: “We have been working on the quality of our wi-nes;
we are introducing new pruning techniques, pro-ducing
less volume, but focusing on the quality of the
grapes. We also invest in barrels and we do not think
of a strategy of one, two or three years; you cannot work
within these parameters, you need more time to produ-ce
consistent quality.”
To some extent, passion a reason for the execution
of these efforts (R18): “We want to sell Canary wines
varieties, with personality...”, as was pride and interest
in preserving the local wine culture (R17): “We are also
introducing red varietals that are almost extinct such as
baboso negro”. For one respondent (R18), these efforts
were leading to important achievements (R18): “Our wi-nes
are now starting to increase the interest among wine
importers: Canada, United States, and even Switzerland.”
Thus, provided the quality of the product is maintained
and/or improved, arguably the niche market that in many
respects Canary wines represents could be a tool facili-tating
wines’ effective marketing. However, in order for
marketing efforts to become more successful, the role of
winery operators has to extend from merely growing and
producing quality wines to that of directly marketing the
product.
This new role of not only growing grapes, or producing
quality wines, but also of conducting effective and efficient
marketing, promotion, and sale strategies is not without
its additional challenges. These challenges are faced by
small winery operators that lack the needed funds, re-sources,
and support. For instance, one respondent (R19)
perceived major challenges in the improvement of “...the
marketing side: exports, food channels (e.g., retailers) and
wine tourism”, while another (R20) acknowledged that
“the winery operator is not a sales person.” Overall, the
approach of being multi-tasked or having multiple roles is
not new in the wine sector. One of the researcher’s obser-vations
in some of the Canary Islands’ wineries, as well
as in wineries in other nations demonstrate that multi-tasking
is being embraced among many winery owners/
managers, particularly those of small/family wineries.
Arguably, such philosophy may be considered in light of
small wineries’ lacking financial and other resources.
Untapped potential of islands’ wine tourism
A previous study (Alonso et al., 2008b) identifies wi-nery
operators’ concern about the quality of the tourism
sector in the Canary Islands; in other words: that budget
travellers who visit the islands with almost all stay ex-penses
(accommodation, food, transfers) already pre-paid
represent the bulk of visitors. The perception among some
respondents, and arguably that of many local business
operators, is that, having chosen an all-inclusive holiday
package, these tourists may not be prepared, or are una-ble,
to make additional expenses. These expenses may oc-cur
when ‘venturing’ to experience local food, wine, or di-fferent
forms of paid entertainment (fairs, music festivals,
theme parks). However, Alonso et al. (2008b) also noticed
many winery operators’ acknowledgment that local wi-nes
are not sufficiently promoted, and consequently little
knowledge exists among outside visitors. Thus, whether
millions of visitors travel to the islands on a pre-paid low
budget holiday package or not, many might still be drawn
to consumption of local foods, beverages, culture, and en-tertainment.
In the present study, several comments referred to the
potential for combining the wine and tourism sectors; as
one Tenerife respondent pointed out (R21): “We receive
some five million tourists; we have experienced a decrea-se
in tourism and even a decrease in prices. The drop in
tourism has also affected the local wine industry. If only
a fraction of that tourism was interested in trying a bottle
of wine and took one bottle home with them the ‘wine pro-blem’
would be solved.” Overall, only two respondents fu-lly
refer to the limited involvement of wineries with wine
tourism as a current challenge faced by the local wine
sector:
R22: “We are counting on wine tourism ta-king
off in our winery, and thus be able to host
tours and so throughout the day. However, right
now our volume of business is much lower than
our capacity; we are just operating at 20%.”
R23: “We are looking forward to developing our wi-nery,
and becoming more involved with wine tourism
... we are also facing financial challenges, and have
been investing all our money back into the winery
[business]. However, I am optimistic and I believe
money is just like energy in the sense that it does not
necessarily go wasted, but that it transforms itself.”
According to figures from the Canary Institute of
Statistics (2009), of the almost one million occupied va-cancies
in different Canary Island sectors, some 290,000
or 30.5% of the total number of jobs are directly related
to tourism. In addition, thousands of jobs in service and
related-sectors are also dependent from tourism, further
demonstrating tourism’s significant value for the islands’
economy, as well as its role in providing part-time and
full-time employment. Despite this obvious dependency
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on tourism, most respondents do not seem to be aware of
the associations between local sectors, including the wine
sector and tourism. At the same time, there seems to be a
lack of vision concerning the potential of using tourism as
a tool to market wines, for instance, as researchers have
noticed in other wine regions (Brunori & Rossi, 2000; Hall
et al., 2000).
All the current issues faced by respondents may have
a direct impact on the future generations of grape growers
and wine producers (R23): “Another challenge is the pro-blem
of the generational renewal... there are few young
grape growers. This year we wanted to buy more grapes
but the situation is difficult... I do not know if we would be
able to find them”. The lack of generational renewal could
become as serious a problem, or even more serious, than
that of wine marketing, or that of achieving consistently
high quality in the local wines. The exploratory studies
conducted recently (Alonso et al., 2009; Sheridan et al.,
2009) already identify the generational renewal problem
for Canary Islands’ vineyards. The following comment
also suggests that this problem may be aggravating ra-pidly:
R24: “In my case, I see that because we are a small family
operation that my winery will eventually disappear.
Hence, right now I am looking for ways to sell the winery,
or have someone lease it. However, no one seems to be
willing to take it over; people want to have an easy life.”
R25: “...the generational renewal is the main cha-llenge;
in my case, I have stepped forward and fa-ced
the challenge, but for the majority of grape
growers this will not happen. I observe what others
are doing, and [I can] see that entire vineyards
are being abandoned, and the vines left to die.”
Observations conducted in the Canary Islands and in
other regions confirm that thousands of individuals have
small properties planted with vineyards as a weekend ho-bby
or to make their own wine. However, for those inter-ested
in an economic return, particularly for wineries, the
importance of economic returns appears to be a central
aspect that is closely related to the generational renewal
of the sector (R23): “The real challenge is that this opera-tion
becomes functional, and if my children one day want
to continue the winery with someone else, I would like that
the economic impact be beneficial on them, and on that
‘someone else’.”
Conclusions, Implications and Future Research
The global wine industry- as other rural sectors- is
facing many challenges related to competition, recent
global economic downturns, as well as limited resources
and time to adapt to changing consumer preferences. The
small / family size nature of thousands of winery busi-nesses
is a barrier preventing them from investing hea-vily
in marketing and other strategies to penetrate diffe-rent
markets and ‘convert’ different consumer segments.
This problem is also true for entire wine regions that are
unable to reach consumer markets that may simply lack
knowledge about wine products from those regions. The
case of the Canary Islands may arguably be related to one
of those less known regions seeking recognition and suc-cess,
even when producing many wine varieties not found
anywhere and even when enjoying a very large tourist
‘audience’ in the millions of visitors each year. Instead,
these elements are critical in creating and exploiting a ni-che
product that not only is unique, but also is an intrinsic
part of the islands culture and tradition, and potentially
of interest to consumers interested in local cultures, tra-ditions,
products, and authenticity.
To date, and while an increasing body of academic re-search
is developing, little is known about Canary Islands’
wine sector, its culture, tradition, potential as a niche pro-duct,
or even its potential to be incorporated to tourism
(wine tourism). This study investigated one aspect of the
islands’ wine sector, that is: the main challenges winery
operators face several years after the first wine and wine
tourism studies were conducted on several islands. Thus,
the study builds upon previous research (Alonso et al.,
2008a, 2008b, 2009; Scherrer et al., 2009; Sheridan et al.,
2009). In general, the marketing of wines, followed by the
need to improve their quality, continue to be the main
concerns among the participating winery operators. The-se
challenges, added to an apparent decrease in consu-mers’
wine consumption may have negative implications
for the future of the wine sector, especially concerning a
seemingly growing problem of a generational renewal in
the sector.
In addition, comments and observations also suggest
that, despite an ancient history of wine production and ex-ports,
and the very close physical proximity to hotels and
thousands of tourists, a wine culture orientated towards
external markets, as well as a wine tourism culture still
appear to be largely missing within the sector. Moreover,
consistent with the findings of previous studies (Alonso
et al., 2008a, 2008b, Scherrer et al., 2009; Sheridan et
al., 2009), many respondents seem to lack the awareness
and the vision about the potential to combine tourism and
wine as a marketing concept that is already common in
many other regions today (see, for example, Brunori &
Rossi, 2000; Gatti & Incerti, 1997).
Only a few of the larger wineries in the Canary Is-lands
indicated that they are increasingly becoming in-volved
with wine tourism in several ways, including via
tours, hosting groups, events at restaurants, or by or-ganising
food and wine tastings. Even some of the very
small, family-owned, or individually-owned wineries are
starting to become involved with wine tourism. However,
most of the wine routes established years ago are still
being finalised and developed and for the most part are
largely disorganised, whereby some are regularly open,
while others are not and still others are very inconsistent
in their opening hours/days. In addition, observations
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Abel Duarte Alonso and Yi Liu
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conducted while visiting the islands, particularly at wine
events, demonstrated that sometimes the wine tourism
experience is rather over-priced and geared towards
groups that may not necessarily include the more ‘gene-ral’
or average wine consumers.
This situation became apparent at a wine tasting
involving many local wineries; the event was held at a
four-star hotel located in the middle of a large capital city,
with limited parking alternatives and almost no promo-tion,
especially in foreign languages to draw the attention
of international visitors/consumers. Moreover, both the
chosen venue and the organisation of the event may have
an appeal for a very small group of sophisticated consu-mers.
Primarily, the event appeared to draw individuals
from government institutions, DO officials and winery
entrepreneurs, but not those individuals that should be
the primarily targets of local wines: local, national, and
international consumers, and/or hospitality business ow-ners
and managers that may have a genuine interest in
promoting local products.
In recent years and as noted previously, some of the
Canary Islands’ wines have been recognised internationa-lly;
Orth and Krška (2002) refer to wine awards as “a basi-cally
promising strategy for producers” (p. 395). Winning
recognition illustrates the existing potential for some Ca-nary
Island wineries to benefit from gaining exposure and
from measuring the quality of their wines to others, espe-cially
when taking part in wine fairs and related events
outside the archipelago. The commitment to quality and
recognition may eventuate in the sale of the wine product
at prices that are commensurate or that correspond to its
quality, especially in the eyes of wine producers, so that
the sector could become more viable and future genera-tions
of wine producers might fill the vacuum left by reti-ring
growers/producers. Thus, an argument is made that
local wineries should use their very unique wine product
and increasingly be present in events to showcase their
wines as opportunities to convert visitors to consume
Canary wines. Clearly, financial and other shortcomings
exist for winery owners/managers to travel outside the
archipelago. One way to minimise costs would be to work
collaboratively as a group.
Locally, wine tastings at events held at wineries or at
other venues easily identifiable or easily reached by con-sumers
could serve the purpose of ‘connecting’ the wine
sector, the local community, and interested national/in-ternational
visitors. In both scenarios, the wine sector
could combine other aspects of Canary Islands’ culture
and tradition, including food tastings, local folklore, art
exhibitions, performances, or as one respondent from Te-nerife
Island indicated, telling the story of past centuries,
when the archipelago had strong commercial relations-hips
with the outside world. Positioning wine beyond the
content of the bottle, but more so in the context of its his-tory,
culture, and tradition, coupled with the limited volu-me
of production and unique wine varieties could enhance
the potential of Canary Islands’ wines as a niche product.
In turn, these elements could increase interest among
consumers and provide different avenues and ways to
showcase local wines, while at the same time lead to the
maximisation of revenues via direct wine sales to at-tendees.
Maximisation of revenues could go far beyond
drawing visitors to such events, for instance, by adding
value to the wine product, and therefore obtaining higher
benefits than selling wines to wine shops and distributors.
Indeed, establishing winery-visitor relationships could re-sult
in ‘converting’ part of the national/international visi-tor
contingent into actual consumers, or potentially loyal
consumers who could also become ‘ambassadors’ of local
wines by spreading positive word-of-mouth advertising.
As some respondents commented during this study, po-sitive
word-of-mouth among local and outside visitors is
already leading to increased sales at some wineries.
Given the many serious problems that the local eco-nomy
is facing, the careful execution of initiatives that
combine wine, culture, tradition, hospitality, and tourism
is suggested, so that a wine culture could be strengthe-ned,
and an old wine tradition could be promoted, inclu-ding
among outside visitors to offer local, alternative, and
unique products. This approach could also contribute to a
more successful marketing of local wine, whereby tradi-tion,
authenticity, and the rustic but natural landscape
of Canary Islands’ vineyards could be drivers of the wine/
winery experience.
The very unique nature, culture, and tradition of the
Canary Island wine sector, the events concerning the de-veloping
and establishment of a wine tourism concept,
and ways in which the mass-tourism phenomenon and
local food/beverage traditions could be successfully combi-ned
are all themes that merit attention in future studies.
Thus, it is argued that using a longitudinal approach,
that is: building upon previous, current, and future re-search
could be beneficial in various ways, including in
helping identify critical challenges and opportunities that
may substantially impact the wine sector. Doing so may
help implement strategies to minimise existing problems
and exploit opportunities, not only in the wine sector, but
also in other sectors of the islands (hospitality, tourism)
that directly or indirectly have an impact on wine con-sumption
and production. Information gathered longitu-dinally
could also be of assistance to other regions and
provinces that are facing similar challenges, and that are
seeking to develop their economy while avoiding the loss
of their primary industries and while seeking to minimise
rural decline. Government and other agencies could also
use data from longitudinal studies in the wine sector to
develop programs, legislation, and/or policies to assist ru-ral
areas in their struggle for survival and preservation of
their cultures and traditions.
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Recibido: 	 28/09/2011
Reenviado: 	 22/01/2012
Aceptado: 	 30/01/2012
Sometido a evaluación por pares anónimos