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Published:  23 July, 2008

The Bulgarians continue to lose shelf space in the UK and other key markets, as the New World walks off with their entry-point sales. But as David Williams reports, a new mood of realism and pragmatism in the country's wine industry is starting to pay dividends, with the long-neglected vineyards now taking priority

You can understand the thinking behind the ongoing high-profile advertising campaign from Bulgaria's biggest wine producer, Boyar Estates, for its flagship Blueridge range. The controversial Does it Matter Where it Comes From?' series of executions was designed to address the prejudices of UK wine drinkers who abandoned the category in droves during the 1990s. As Steve Abrahams, the company's UK marketing manager, explains, The idea was to focus on the taste of the wine, not where it was made. People have had a bad image of Bulgarian wine, for whatever reason. We wanted to communicate to them that they should try it for what it is, not where it comes from.' Since its launch, the Saatchi-designed campaign seems to have offended and amused in equal measure (as evident in a fiery exchange between Malcolm Gluck and a Saatchi representative in Harpers last year). Despite, or possibly because of the controversy, however, Abrahams and his colleagues are standing by it. The latest trade press execution, which draws parallels between Bulgaria and a sturgeon's backside (caviar, geddit?), was launched in February and is arguably as provocative as previous instalments which cited, among other things, Audrey Hepburn's politically questionable father and Jesus' humble place of birth. Taking something of an all publicity is good publicity' line, Abrahams says, We wanted to make a big impression both for Blueridge and Bulgaria, and I think we've definitely succeeded in achieving that. We think it's a very effective campaign.' As proof in part of its efficacy, he points to a 12% volume rise in Boyar Estates' sales over the past year, in a category that is currently declining at a rate of 20%.

This land is our land Ironically, while the ads have made great efforts to play down the origins of the brand, the industry in Bulgaria as a whole (including Boyar) has probably never been more concerned with provenance. Indeed, after years of neglect, the vineyards, where the wines come from', are now top of the Bulgarian agenda. As Stefan Pirev, production manager at Rossenovo's Khan Krum winery in the northeast of the country, says (echoing the words of a thousand winemakers all over the world), We understand that while it is possible to make bad wine from good grapes, it is never possible to make good wine from bad grapes. We realise that to be able to compete we must concentrate on the vineyards.' Plamen Grozdanov, managing director of Boyar Estates, agrees. We can have all the best equipment in the world, and in fact I think we at Boyar do have equipment which is the equal of what you can find anywhere in Europe, but if the fruit we have isn't good enough for that equipment well, it's going to be difficult.' Over the last decade, the truth, as most Bulgarians would now acknowledge, is that the fruit has too often not been good enough. The problem, as any visitor to Bulgaria can confirm, is that the vineyards have been both starved of investment and poorly managed. It's a problem that has been compounded by the ongoing re-privatisation, or restitution, of land to the original, pre-Communist owners, which began with the implementation of democracy in 1991. There's no doubt that, morally-speaking, the restitution programme was the right thing to do,' says Grozdanov. But it did create a lot of problems. Many of the new owners who benefited from the restitution were the children or grandchildren of the original owners and had lived in cities for the whole of their lives. They didn't know how to grow vines, how to produce grapes. This has made it quite difficult for us.' Things are changing, however, with different companies taking different routes to try to ensure the vineyards are capable of producing the necessary quality in the short-, medium- and long-term. Grozdanov describes Boyar's long-term strategy thus: We want to have full control in the vineyards as much as possible.' To this end, Boyar has acquired 1,000 hectares (ha) of land through its merger with Vinprom Rousse, near the Danube in the north of the country, of which 30ha is already replanted and 300ha has been either cleared for planting or earmarked for clearance and planting. The company is also working with Australian consultant Di Davidson, of Di Davidson Viticultural Consultancy, to isolate the correct sites for the correct grapes, both in the remaining 670ha and in sites which the company might attempt to acquire in the future. We are approaching the vineyards in much the same way as we approached our winery at Blueridge,' says Boyar's CEO, Margo Todorov. We want to get it right. With the help of our consultant we are trying to ensure that we have the right types of vines in the right places. And when it comes to planting, we decide what kind of vine we want and then we find the supplier who can provide it, not the other way round.' The approach is rather different at Lovico's 20 million-litre capacity Suhindol winery, which with brands such as Copper Crossing and Craftsman's Creek is another big Bulgarian supplier to the UK. Though the company has some 1,500ha of wholly-owned vineyards, it has put most of its recent efforts into securing long-term (20-year) contracts with growers and, with funds provided by its new (since October) principal shareholder the Bulgarian Central Co-operative Bank, has paid for many of those growers to clear and replant their vineyards to Lovico Suhindol's specifications. So far the scheme has enabled independent suppliers to plant 400ha of vines, with a further 2,500ha planned. According to Lovico Suhindol's president Triffon Dragiev, the situation suits both the growers and the company. The growers benefit from being able to hold onto their land and secure better prices for their fruit when the plantings are mature. The winery, meanwhile, is able to exercise greater control on the vineyards, while avoiding the complex negotiations with countless different growers which, according to Grozdanov, means it can take up to ten years to acquire any meaningful area of vineyard. As Pirev, who looks after 50ha of vineyard at Khan Krum, says, the new plantings in Bulgaria cannot be compared in scale to the New World'. What's more, it will be a matter of years before new plantings and replantings come on stream, and even when they are ready, much of Bulgaria's grape supply will continue to come from small, independent growers and co-operatives. In the meantime, companies such as Lovico, Boyar, Winez and Rossenovo say they are working hard to ensure that the grapes they receive from those suppliers improve. Among the steps taken at Boyar this year, for example, has been a concerted attempt to fix prices and contracts with its growers to provide fixed quality before the growing season begins. We are finding that the growers are prepared to follow our instructions,' says Todorov, and we should have about 10,000 tons of grapes - about a third of our production - produced by growers on these contracts for this year's production.' The rest of the grapes will continue to come from growers over whom Boyar has little control, however, a situation that is common all over the country, with quality assessment very often left until the grapes are brought to the wineries' weighing bridges at harvest time. Looking on the bright side, as Pirev does, those grapes should improve in time as the number of growers looking to co-operate with wineries to produce grapes to their specifications rises. The producers increasingly understand that Bulgaria has lost a lot of market share in the last few years, and that they have to work with us to produce the quality of wine that we can export,' Pirev says. They realise that they will not receive good prices for poor grapes. We are looking to pay for quality not quantity now.' That view is echoed by Alastair Peebles MW, who works as a consultant for UK importer Winez, which deals with Vinprom Svischtov (which now takes 70% of its production from its own vineyards in the north) and Pulden Wine Cellars in the south. Things such as picking and pruning are certainly much better controlled than they were two or three years ago, when a lot of the wineries and growers were in such difficulties financially they were only worried about cash flow. In that kind of situation,' he says, you are quite simply not concerned with looking for the right acid levels, you're just looking to get as many grapes as possible. Things are changing at about a third of the rate you might wish for, but they are changing.'

In the winery The project of bringing Bulgaria's viticulture in line with that of its competitors is still in its early - or, as Peebles says, slow' - days, and may yet flounder on the still-precarious financial situation of an industry which has suffered not only from a loss of market share in the UK, but also lost almost all of the 500 million-bottle market it had in Russia until the mid-Eighties. The country's parlous economic situation isn't helping, either. The statistics are bleak: unemployment runs at 20%; the average monthly wage is $100 (71); around 70% of the population are living on or around the poverty line; and inflation is running at around 7.5% a year. These are, as Dragiev says, difficult times for Bulgaria; it is not an easy time to be investing'. Nonetheless, although Dragiev says that the vineyard challenge is the biggest challenge for Bulgarian wine in the next two years', the country's attempted fightback is not exclusively focused on its grapes. Viniculture and marketing are also getting a lot of attention and investment. In terms of winemaking, Boyar Estates' $15 million Blueridge winery is the most obvious and impressive development. But the 18,000 ton site, built from scratch in Sliven, in the south of the country, in 2000, is not the only evidence of Bulgaria's commitment to turning things around. Boyar Estates itself has also invested a large part of the US$60 million it managed to raise from the European Bank for Reconstruction and Development (EBRD) and Barings Central European Investments in 1999, in modernising its facilities at Shumen and Iambol. More modest examples have been: Chateau Rouceau, the first-ever winery constructed by the EU's SAPARD programme, near the village of Hadji Dimitrovo, at a cost of $1.3 million; Rossenovo's $300,000 investment in developing its various production sites; and Lovico Suhindol's $150,000 investment in a new in-house lab for chemical analyses. Less impressive financially, but potentially as important, is an initiative from Epoch Wines (formerly Lovico International), the UK distributor and importer for Lovico, to guarantee the quality of its producers' wines. The Epoch Wines Quality Charter is the result of several months of negotiations between Epoch and its partners and, according to Epoch's UK commercial director Paul Scaife, aims to assure standards of quality and service in winemaking, samples, technical specifications and logistics. It will be implemented through contractual arrangements between Epoch Wines and its suppliers, and supported by an experienced team of operations personnel and oenologists in Sofia. The charter is aimed at arresting Bulgaria's decline in the short-term by addressing buyers' and consumers' concerns,' says Scaife. The most crucial task for Bulgaria currently is that of improving quality and quality control. We want to bring back lapsed users into the category and we can only do that by being consistent in quality and quality messages.'

Building Brand Bulgaria In marketing, the theme once again returns to origins, and to indigenous grapes. Could the Bulgarians learn a trick or two from their neighbours in Greece, who, over the last couple of years, have been causing a buzz in the trade with the likes of Assyrtiko and Rhoditis? Epoch clearly thinks so. It would be wonderful to market more indigenous varietals,' says Scaife. He points to the success of the 100% Gamza, which Epoch exports to Canada to the tune of 10,000 cases a year, as proof that consumers outside Bulgaria can stomach the idea, too. The key, says Scaife, is to develop brands and packaging which will attract the consumer into tasting these wines. We can no longer rely on old-fashioned Bulgarian-derived packaging for indigenous varietals to attract consumers to what is, for them, an entirely new proposition.' Epoch is thus planning to release a new range of indigenous wines which, according to Scaife, will be developed and packaged specifically for the UK market'. Launched later this year, they will take their place alongside Revival, a Mavrud/Cabernet/Merlot blend, which the company launched last year as a means of gently introducing consumers to Bulgarian varieties. Boyar is trying a similar policy by introducing a Dimiat/Chardonnay dual-varietal as part of the Blueridge range at Waitrose later this year. Abrahams is cautious about going too far down this route, however. I look at the Greeks, and I think, "OK, they're generating a lot of press interest, but has it been followed up with sales?"' he says. It's fantastic to be able to offer consumers something different, but at the same time a lot of them are looking for your Cabernets, your Merlots and your Chardonnays. Ultimately we're looking to offer a mix of international and indigenous varietals, but we have to build up an image for Bulgaria first.' That image looks a long way off construction at the moment. As Peebles says, The Bulgarians have a culture of, "If you can shoot yourself in the foot once, then why not do it again?" They just haven't learnt that the most successful wine countries work together. They prefer to dismiss each other's efforts rather than seeing each other as allies.' There are signs of hope. This year will see the introduction of a generic Bulgarian stand at the London International Wine and Spirit Fair. And negotiations continue over the development of an intra-winery group to present a united front to the Bulgarian Government, when it lobbies for financial incentives such as tax breaks. However, the return of the UK generic office, scrapped two years ago, seems unlikely, with each of the main wineries accusing the others of either hijacking the initiative or not bringing enough to the party. It's a shame. If the Bulgarians could only hold fire on their feet and work together then maybe they could convince the UK that it really does matter where the wine comes from. Then the work they have put into first the wineries and now the vineyards could be translated into consumer recognition for the wines.