A discreet businessman, he sarcastically says that he is delighted that the year is ending and with it the splendor of celebrating the 40th anniversary since his father, David Álvarez, founder of Grupo Eulen, bought Vega Sicilia, a winery group that ended 2021 with record numbers: a turnover of 41 million euros, 14% more, and sales of 308,804 bottles, 11% more, at a price of 119 euros, 3.5% more. On the urgent agenda of Pablo Alvarez (Bilbao, 1954) for the next year there are several tasks. The first of these, seeking a general manager for the Tempos Vega Sicilia group, after the recent departure of Antonio Menéndez, in addition to starting the Deiva winery, the latest project with which the Álvarez family will settle in Galicia, where they have acquired 24 hectares in Tea County, in Pontevedra. But, in addition, he is in charge of transferring his position as CEO to the new generation of the family, occupying the position of president of the group, replacing his sister Marta Álvarez. He talks about all this in a conversation with Five dayslast Friday at the Hotel Rosewood Villa Magna in Madrid.
What have these four decades meant for Vega Sicilia?
It has happened too fast, I have dedicated my whole life to it. Now, when I turn 70, I am retiring from my executive position. I must make way for the new generation, that they will be able to do new things. My balance is that I have tried to give my best, and when you reach a certain age it is best to retire at the top and not to be retired.
But he remains president
This is what the family has discussed. My sister Marta stays as a counselor. I can contribute my experience and the prestige acquired over the years. I will continue linked, but not sending.
In what phase is your replacement as CEO?
We are in that process, which is not fast. Everything has to be agreed upon and that takes time, because it is not easy to reach agreements in families. At the moment, there are no candidates, and they will be the first to apply and be interested. For this we will also have the help of a specialist, who objectively evaluates the best candidate, because the family cannot decide who is the most suitable.
Do you have a child who may be interested?
The eldest, Pablo, has knowledge of the world of wine, but the important thing is that it is worth it and that he wants it. Because in this family thing I don’t rent the profits. It’s not easy having the family check on you all the time. They have to do well to earn the respect of others. Being the son of is not easy. They will always compare you, although you have to give them a vote of confidence. I did not know and I learned. The process will be resolved next year. It is important that large wineries are in the hands of families, because in the world of wine you always need to know who is behind it. It is a special world, there must be a soul.
The previous CEO recently left the company, are you looking for a replacement?
I am looking for a general manager, with the help of a headhunter because it is not easy to find him. That is why we have had to resort to this figure, because in addition to every 100 senior positions, 70% fail. It is a complicated position, you have to live in Valbuena de Duero, work with your family, which is never easy. For us it is important that those who work with us remain in the company, and that they do not have it as part of their curriculum. We want people to love the company, not be more concerned about celebrity. You have to love what you do and always be there. Our company is not run from Madrid, we have to earn the trust of the people. We believe that in two or three months we will have it resolved.
Is it a well paid position?
It is a well-paid profile, we pay well. Everyone who works with us is well paid. People have to be paid, and we pay more than average. You have to be generous. We have a CEO, but we have other CEOs who have been with us for a long time.
Have you been wrong many times?
Some. I have been wrong, but from mistakes you learn. Every day I ask myself if I’m doing well, because I like to improve in every way. And the set is not bad. I am concerned that new people who come are not locked up in the world of wine. The last people I have hired have been from other sectors because I think they can contribute different things. And it’s not easy. My grandfather used to say something that I always repeat, and that is that painting a dove is easy, the difficulty is putting its beak on it and making it eat.
What goals do you have ahead of you, apart from these open fronts?
Improve what we have. Businesses are not only about the money they give, but you have to calculate when you have to earn money. In the world of wine you have to be patient. You cannot create businesses today, and even less in wine, so that they make money yesterday. 70% of the wineries do not make money, but as in all businesses, you have to be patient. In the world of wine you can earn money, but in the medium and long term.
There is a fashion for expensive wines. In the end Vega Sicilia is going to be a cheap wine.
This is happening more in Spain than in other countries. There is a race to see who has the most expensive wines. People talk about wines of which there are a thousand bottles and that in the end, with that amount, they are not seen in the world. You have to make a quantity to make a mark, these are wines that are footnotes. The fashion is to have an expensive wine because that helps to sell the troop. In our case, we have a demand well above the supply. We have a demand for Vega Sicilia for two million bottles and we have 400,000. Also in recent years we have witnessed the great development of wines in restaurants. We are present in 150 countries and in many cases we cannot give what they ask of us. And we cannot increase production. We have soils that are not suitable for increasing the quality of the wine.
This means that Vega Sicilia cannot grow any more.
No, it can’t grow any longer. We can only grow by creating or buying new wineries. For example, with Alion, our best-selling wine, we cannot make more than 320,000 bottles, the same number that we did in a year of good production such as the year 2000. It must be taken into account that in the world of wine you work with a alive and wineries cannot do miracles. The wine is born in the vineyard and that is what is important. They have also noticed in the United States or Australia, that at first they thought that the vineyard was a story and now try to tell its terroir. Technique makes it possible to make good wines and that is within everyone’s reach, but they must be made to have soul, to be special.
But are your wines expensive right now?
They are expensive wines, but not excessively expensive. Wine has ceased to be a food product to be something cultural. Each wine adapts to its possibilities. I always remember that when I turned 40 I went to Robuchon with some friends, then the best chef in the world, and the sommelier told me that taxi drivers went to the restaurant to eat, that they saved to go, and that is a cultural, aspirational issue. What happens in the world of wine is that there is a tendency to see who has the most expensive wine. There are people who ask for the wine because of the price. I think there is quite a lot of nonsense, something that happens with what has to do with the senses. Wine is in fashion, but we must not forget that it has not always been like this.
What is it referring to?
In Burgundy, for example, tens of millions are being paid for vineyard hectares, and you won’t make it profitable until the day you sell it. It’s like a Picasso, that you hang it on the wall and make a profit on it the day it’s sold.
By the way, you have an important collection of contemporary art.
We started a long time ago when we started using a box, which we always bought, to make our magnum size labels. Every year we would take one to the market and buy a painting. At that time, there was a company linked to the Reina Sofía Museum, in which several companies were involved, including banks, electricity companies, and we became partners. We put money and there was a committee of advisers who chose us and advised us on contemporary works. Now we can have about 60 pieces. Many of them, and others, are on display in the Patio Herreriano in Valladolid. They were the promoters of this, at that time my father lived. And our final idea was for Vega Sicilia to have an artistic heritage, and for this we have advisers. The idea is not to acquire the work of established artists, but to choose those who are starting out, to support the new ones.
They immediately opened a winery in Galicia and the previous one was opened in La Rioja, how are they doing in this area, which they entered together with the Rothschild family?
Is everything alright. For example, when we entered the Ribera del Duero with Alion, in 1982 there were about 14 wineries, and little by little there was an explosion and now there are 307 wineries. Everything had to be done. Instead, we have arrived at La Rioja, a denomination with much more history, more developed, with prestigious wineries, and it has not been so easy. In La Rioja everything has gone slower and it is more difficult to gain a foothold. It is different, it has a different climate, a different soil, a different grape, and that takes a process. The winery is consolidating. Our maximum production in this area is 300,000 bottles and little by little the wine begins to be known. Despite the prestige, making your way is not so easy. And that last names help. The Rothschilds sell a lot, be it toilet paper or wine.
Are there many myths around Vega Sicilia?
It is a world of the senses, and that lends itself to the existence of them. For example, it is a legend that I have a table because I am from Vega Sicilia in all the restaurants in the world. The only thing is that I travel a lot and they know me, even though I’m shy. There are people who admire me, but what I am not is a showman in the world of wine. I’m discreet. I travel a lot, more than 100 days a year. In 2020 he had 130 days out scheduled.
In recent months there have been, as far as is known, two major robberies in restaurant warehouses.
There is an important madness for the wine and for the price. It has become fashionable, there are many very rich people in the world who do not know what to buy. And wines have become a cult object and you pay anything for them.
Are you contemplating the IPO of the winery?
All the wineries that went public in Spain have left. In the world of wine, results are slow, and that doesn’t match the Stock Market. Working with shareholders is not easy. In Spain, per capita consumption has fallen by 50% in recent years, but wine has never moved as much money as now.
Finally, what advice would you give your successor?
That he loves what he does. It is important, in addition to professionalism, that it is taken for granted.