Innovative Strategies and Transformations in the Montilla–Moriles Wine-Production Area: Adaptation and Success in the Global Market

Abstract

This study examines the transformative changes in the wine industry of Southern Europe over recent decades, focusing on one of Spain’s oldest Protected Designations of Origin (PDO), Montilla–Moriles. The region faced severe challenges during the second wave of globalization at the beginning of the 21st century. According to the 1999 Strategic Plan for this PDO, far-reaching strategic actions were needed; 25 years later, however, fewer than half of the original companies remain. To understand this complex issue, a qualitative analysis was conducted using case studies and in-depth interviews with key stakeholders in the sector. The paper presents several success stories featuring companies with strong dynamic capabilities: Bodegas Robles, Lagar de la Salud, and Tonelería del Sur–Casknolia. These companies were selected for their notable growth, contrary to the general industry trend, their diverse strategies, and their role in revitalizing the Montilla–Moriles wine market. Their success is attributed to a blend of traditional expertise, innovation, sustainability, and strategic internationalization. The findings of this study reveal that despite the industry’s challenges, innovative initiatives can thrive by leveraging global market opportunities.

1. Introduction

Wine, olives, and cereals are together known as the Mediterranean triad. The cornerstone of the primary sector in the area for millennia, this triad is deeply rooted in European culture, customs, and gastronomy. Today, wine culture, in particular, is considered a good way of leveraging tradition to generate employment, stabilize rural populations, and drive the economy in many territories through activities such as wine tourism, visits to vineyards, grape harvests, wineries, festivities, folklore, gastronomy, etc. However, the modern world demands immediate returns, and tradition often comes up against economic rationality and global trends. As Bonanno [1] asserts, globalization as an economic, political, and social project is a historical phenomenon that gives prominence to transnational companies, with hypermobility leading towards uniformity of consumption patterns where everyone drinks Coca-Cola, watches MTV, and uses the Internet. Although the origins of globalization can be traced all the way back to the geographical explorations of the 15th century, in recent years, it has evidently accelerated significantly. As popular works by Friedman [2,3] suggest, we are witnessing the rapid shrinking of the world because free markets, new technologies, and investors operate rationally and take advantage of the advanced information available today, leaving little room for local idiosyncrasies and traditional businesses.

It is timely to analyze how these globalizing currents affect the traditional activity of a wine-growing region, specifically, the area of Montilla–Moriles (in Cordoba, southern Spain), one of the oldest Protected Designations of Origin (PDO) in Spain, with viticulture anchored in ancient customs. This area is not widely known and has received little attention in academic studies [4,5]. The viticulture of this inland region remained relatively isolated from external influences until well into the 19th century when the railway connected it to overseas markets [5]. Like many other European vineyards, the area was then devastated by phylloxera in 1888–1890 [6]. It was reconstructed and replanted in the 20th century when it enjoyed its golden age, but it has declined in recent decades.

While the wine industry is fragmented and in decline in several traditional wine-growing areas of Europe, it is booming in emerging powers (Argentina, Chile, Australia, South Africa) [7]. In this study, we analyze the evolution of viticulture in Montilla–Moriles and the challenges it currently faces while also looking to the future by providing examples of companies that have survived and thrived amid a turbulent environment hostile to Cordovan tradition.

We thus aim to explore the effects that market integration is having on a traditional industry in the Spanish economy, namely viticulture, which is widespread in the world’s temperate zones but has many specific local features in terms of cultivated varieties, methods of production, types of wines, market orientation, and brand strengths (or lack thereof). For this analysis, we briefly review the key industry statistics, changes in demand and traded volumes, and European regulations [8] of the wine sector, with a specific focus on the traditional wine-growing area of Montilla–Moriles (in Cordoba, Spain), its history, and its distinctive features [9,10].

The vineyards of the Montilla–Moriles PDO are among the oldest areas protected by the Spanish Wine Statute of 1932, thus acknowledging a historical tradition and centuries-old winemaking endeavors in a vast region comprising 17 municipalities in Cordoba, Southern Spain, south of the Guadalquivir River. The vineyards cover 4400 hectares. This area has a predominantly continental climate, with an altitude ranging between 300 and 600 m above sea level, where albariza soils allow for perfect grape ripening and wines with high natural alcohol content.

This region specializes in producing fortified wines (for aperitifs or desserts), employing aging processes similar to those used in other Andalusian areas such as Jerez, Malaga, and Condado de Huelva. In all these areas, the product is of high quality and is mainly consumed locally.

We discuss below the challenges facing Montilla–Moriles, using data from the 1999 Strategic Plan for its wine sector [11] and describing what has happened since then. The 1999 Strategic Plan focused on several key objectives to revitalize and enhance the competitiveness of this wine-producing region. It sought to address the specific challenges faced by the Montilla–Moriles Designation of Origin, such as competition from other wine-producing regions, changes in consumer preferences, and the need to modernize and diversify production to remain competitive in the global market [11]. While the diagnosis was correct, the strategic problem was, as we will see, closely related to the sector’s fragmented and aging industrial fabric as well as the fact that its products had gradually been losing market share to other wines and more popular beverages since the late 20th century.

In sectors in crisis, some companies resist and even thrive, although such success stories remain understudied in the literature. That is why we have sought companies in the Montilla sector that have employed novel strategies to confront the aforementioned problems, demonstrating significant growth and dynamism. Three companies were selected for their ability to buck the general industry trend by achieving growth, their use of diverse strategies, and their role in revitalizing the Montilla–Moriles wine market. To conduct an in-depth analysis, we also extracted information from interviews with experts, company leaders, and the Consejo Regulador (Regulatory Board) of the Montilla–Moriles PDO.

2. Background

2.1. History and Evolution of Viticulture in Montilla–Moriles in the 20th Century

The writings of Lopez Ontiveros [12] reveal that, until the 18th century, agriculture in an inland, poorly connected area like the countryside of Cordoba was much less specialized than it is today. There were no local monocultures as there are today; agricultural land was multipurpose, and everything was produced everywhere. Agricultural output was mainly allocated to self-consumption and the local market (Montilla’s production remained a long way from the main wine-exporting areas during those centuries, with the latter being necessarily close to the coast for ease of shipping (Bordeaux in France, Madeira and Oporto in Portugal, Tuscany in Italy)). In Spain, the Canary Islands and Jerez led the way in exporting wines in significant quantities (as indicated by Abbot [13] and Maldonado Rosso [14]). In the 19th century, improvements in communications (the railway reached Montilla in 1865, connecting the area with the interior and the port of Malaga) brought opportunities, but also the spread of pests and diseases in Europe (first powdery mildew and then devastating phylloxera). This initially led to a shortage of wines and great opportunities for trade in the southern part of Spain, as the pests and diseases arrived much later than in the northern part of the continent. When they later reached the vineyards of Cordoba, they caused a significant crisis but also opened up an opportunity for varietal reform and overseas export. The connection with the thriving wine industry of Jerez (Cádiz) served as a model for the subsequent development of Cordovan wines. Maldonado Rosso [14] analyzes some key factors in the launch and expansion of the exports of Jerez wines and the development of production using criadera-solera systems. (The system of “criaderas” and “soleras”, characteristic of Andalusian fortified wines, seems to have emerged in the late 18th and early 19th centuries in an effort to ensure a more homogenous product and better quality compared to the traditional aging system). These new developments allowed for product homogenization and year-round rather than seasonal export [15,16].

From the 19th century on, several winemakers from Cordoba took advantage of the high prices that wines exported from Jerez were fetching, which made it attractive to also re-export wines from other Andalusian areas, including those from Montilla. Therefore, the 20th century began in Montilla with the feverish activity of rebuilding the productive potential by replanting the vineyards after the phylloxera disaster. The new plantations were an opportunity for varietal reform in the area, and the diverse local grape varieties were almost entirely replaced by the Pedro Ximénez variety, which had been proven to possess the ideal characteristics for adaptation to the soils and temperatures of the region. Additionally, the sweetness and thin skin of the grapes of this variety were, and still are, ideal for the criadera-solera aging system that became widespread in the area.

Following the Spanish Civil War, which led to the abandonment of vast vineyard areas, cultivation resumed, but wine producers faced the problem of market stagnation in Europe during World War II, and the years of autarky in Spain caused a crisis in wine prices. Starting in 1943, with the intervention of the National Institute of Colonization (a government organization tasked with repopulating rural Spain), about 400 small parcels of land were granted for cultivation, dividing the estates of the Duke of Medinaceli at Cerro Navarro, Piedra Luenga, Cortijo Blanco, and Fuente Plata [17]. This led to a fragmentation of land ownership, which was particularly suitable for an intensive cropping system such as vineyards, and many of the new landowners contributed to the expansion of vineyards in southern Cordoba and other areas of the country. The Francoist State provided aid for the creation of cooperatives, which brought together small winegrowers in response to the decline in wine prices starting from 1950 [18].

Table 1. Main wine cooperatives in Montilla–Moriles founded in the 20th century.

Winery	Year	Location
San Acacio Cooperative	1962	Montemayor
Jesus Nazareno Cooperative	1963	Baena
La Local Cooperative	1963	Aguilar de la Frontera
La Aurora Cooperative	1964	Montilla
La Purisima Cooperative	1970	Puente Genil
La Union Cooperative	1979	Montilla

Source: own elaboration based on PDO Montilla–Moriles [8,11].

lists the main cooperatives that emerged in Montilla–Moriles in the 1960s. These cooperatives grouped most of the small winegrowers in the area together and allowed for the expansion of the sector in terms of the initial processing to extract the must, but they were unable to become involved in activities further along the wine value chain. They barely participated in the aging and bottling phases and even less so in the commercialization of the final product [11].

In 1951, the effective slogan of the Consejo Regulador, “the choice is quite simple, either Moriles or Montilla”, marked the beginning of a golden age for the area. By the early 1970s, the total vineyard area reached a maximum, with 20,000 hectares registered under the Montilla–Moriles Designation of Origin. These were years in which wine consumption was high in Spain, and there was a growing domestic demand fueled by years of economic growth. The seemingly easy money that could be made with vineyards encouraged many farmers to become winegrowers. Several grandiose wineries were built, production increased to quantities that were very difficult to sell, and problems of surplus began to emerge. A true economic bubble was gradually growing.

Ramirez Pino [19] describes the 1960s and 1970s as the vineyard fever of the 20th century. Even though various designations of origin already existed, wines circulated freely. Winegrowers grouped in cooperatives produced wine and sold it in bulk to intermediaries. In Montilla, it was rumored that many winemakers brought cheap wines from other areas, mixed them with Montilla wines, and sent them to Jerez, Sanlúcar, and Puerto de Santamaría for re-export. The same author states that 30% of the production went to Jerez, and at the onset of the crisis, the people of Jerez attempted to impede the export of Montilla wines to the Common Market. Montilla’s viticulture had become a giant with feet of clay. Large quantities were produced without having developed its own commercial network capable of handling the large volumes produced every year [19].

The excess production and dependence on Jerez led to numerous wineries facing difficulties, and bankruptcies and suspensions of payment became common from the late 1960s on, especially in the 1970s. The vineyard area clearly reflects the ups and downs of these years. In the 1970s, the area reached nearly 20,000 hectares of registered vineyards (still predominantly Pedro Ximénez monovarietal), occupying most of the available albariza soils in the area. However, in 1986, a period of massive uprooting of vines began, leaving little over 4000 hectares today (Figure 1).

The reduction in vineyard area was driven both by the excess supply of fine wines and the decrease in demand (compared to the growing consumption of beer), as well as external factors such as European agricultural legislation that encouraged the uprooting of vineyards, with the added benefit of receiving payment for the transfer of planting rights. At the same time, olive groves began to gradually replace vineyards in the area due to the significant increase in subsidies for olive oil production resulting from Spain’s accession to the Common Market during those years.

2.2. Evolution of the Wine Sector in the 21st Century

Viticulture is an activity that primarily occurs in Mediterranean Europe and temperate zones of the Americas (coasts of the United States and intermediate latitudes of Chile and Argentina), South Africa, and Oceania (Australia and New Zealand).

According to the International Organization of Vine and Wine [20], global viticulture produces between 260 and 290 million hectoliters annually (depending on the season), with consumption stable at around 240 million hectoliters (see Figure 2). In the 1970s, the global vineyard area reached 10 million hectares, which decreased to just 8 million hectares by 2000. In certain European wine-producing countries, the trend has been significantly influenced by the abandonment of mixed vine cultivation, where vineyards were intercropped with other plants [21]. This shift towards dedicated vineyard areas has enabled more efficient and higher-quality wine production despite the overall reduction in vineyard hectares. The surplus situation in the sector, which mainly occurred in recent decades of the 20th century, has led to a continuous decline in vineyard areas throughout the 21st century to the current figure of just 7.3 million hectares. This decline has mostly resulted from the policy of abandonment subsidized through the CAP, which has facilitated the removal of marginal and low-productivity vineyards. However, this reduction in cultivated areas has not been paralleled by a reduction in production; improved cultivation techniques, irrigation, and advancements in winemaking technology have stabilized production.

Consumption patterns have undergone significant changes, such as the shift in demand among countries. As shown in Figure 2, the international wine trade has increased significantly over these years, currently standing at 110 million hectoliters, which is double the volume traded in 2000 (for every 100 L of wine produced, 40 are consumed in countries different from the country of origin). As indicated by Ohana-Levi and Netzer [22], consumption is declining in traditional countries (France, Italy, and Spain) and other high consumers (such as Argentina and Uruguay), with public policies, prices, and taxes influencing this decline; however, demand for wine and spirits is increasing. Demand for wine is increasing in China and Australia. On the other hand, consumers’ tastes are changing regarding the type of wine consumed, with growth in white wines, fruity reds, sparkling wines, rosés, dealcoholized wines, and sustainable products, contrasting with the decline in consumption of traditional wines such as reds and fortified wines [20,23]. Demographic evolution and changes in prevailing lifestyles also have a significant impact on these shifting consumption patterns [24].

The European Union (EU) is the leading producer and consumer of wines: it accounts for 45% of the world’s vineyard area, produces 65% of the wine, and is the largest exporter. According to the European Commission, wine represents 11.2% of the final agricultural production in Europe, generating a value of 25.6 billion euros in 2022 [25]. It also stands out for its high number of winegrowers, constituting a fragmented sector with 2.2 million farms, with production especially concentrated in France, Spain, and Italy. For example, in 2022, wine production in the EU reached 16.1 billion liters, with Italy, Spain, and France accounting for 83% of this production. Wine consumption is influenced by culture, the economy, and market trends. International wine commerce depends on regulations, trade agreements, and global demand and is crucial for the distribution of wine between different countries and regions. The wine supply chain includes multiple stages beyond agricultural production, such as winemaking, aging, bottling, distribution, and marketing [26]. The total value of wine exports from the EU in 2022 was approximately 25.6 billion euros [27]. These data highlight the importance of considering the entire supply chain to obtain a comprehensive view of the sector.

2.3. Current Context of the Montilla–Moriles PDO

The Montilla–Moriles PDO is distinguished by its diverse range of wines, from dry and light Finos to intensely sweet Pedro Ximénez (see

Table 2. Varieties and characteristics of wines from the Montilla–Moriles PDO and other Spanish wines.

	Wine Type	Description	Tasting Notes	Alcohol Content
From the Montilla–Moriles PDO	Fino	Dry and light wine, aged under a layer of flor yeast	Pale color, sharp aroma, delicate taste with almond notes	15–17%
	Amontillado	Starts as fino, but with additional oxidative aging	Amber color, hazelnut aroma, dry taste with woody notes	16–22%
	Oloroso	Dry and robust wine, completely oxidative aging	Mahogany color, intense nutty aroma, powerful and complex flavor	17–22%
	Palo Cortado	Combines characteristics of Amontillado and Oloroso	Dark amber color, dry fruit aroma, dry and elegant flavor	17–22%
	Pedro Ximénez (PX)	Natural sweet wine made from sun-dried grapes	Dark color, raisin, and honey aroma, very sweet taste with caramel and fig notes	15–18%
	Moscatel	Sweet wine made from Muscat grapes	Golden color, floral and citrus aroma, sweet and fruity taste	15–18%
From outside the Montilla–Moriles PDO	Young white wines	Fresh and fruity wines made from Pedro Ximénez and other white grape varieties	Pale yellow color, fruity and floral aromas, light and refreshing taste	10–12%
	Red wines	Made from varieties such as Tempranillo and Syrah	Intense red color, red fruit, and spice aromas, robust and structured taste	12–14%
Type of Aging Process	Biological aging	Aging under a layer of flor yeast, avoiding contact with air	Examples: Fino and the initial stage of Amontillado
	Oxidative aging	Aging in contact with air, which produces oxidation	Examples: Oloroso, Palo Cortado, and the final stage of Amontillado
	Mixed aging	Combination of biological and oxidative aging	Examples: Amontillado and Palo Cortado

Source: Own elaboration based on data from Consejo Regulador [8] and 2020 Specifications (BOJA 3-12-2020) [28].

). Each type of wine offers a unique experience, influenced by the aging method and the grape varieties used. This diversity not only enriches the wine offerings of the region but also reflects the rich winemaking tradition of Montilla–Moriles.

The decline in consumption of wines from the Montilla–Moriles PDO can be attributed to several interrelated factors. First, there is a notable lack of consumer awareness about these wines and inadequate promotion. Additionally, they face strong competition from other Spanish wine regions, such as Rioja and Ribera del Duero, which enjoy greater recognition and market presence.

Montilla–Moriles produces very specific types of wine, such as fino, Amontillado, and Pedro Ximénez, which, although appreciated by more discerning palates, may not appeal to all consumers. This issue is exacerbated by the shift in current consumer preferences, which tend to favor young, fresh, and lower-alcohol wines, such as those from the D.O. Rueda, over the traditional aperitif wines of Montilla–Moriles.

Furthermore, the distribution of these wines is limited, reducing their accessibility and consumption. Consumers may also perceive that other regions offer better value for money, negatively impacting sales of Montilla–Moriles wines. Finally, the lack of wine education and culture among consumers contributes to the underappreciation of the characteristics and advantages of Montilla–Moriles wines. To tackle these issues, it is crucial to improve the promotion, distribution, and consumer knowledge of these unique wines.

2.4. Regulation of the Sector in the European Union

The European regulatory framework has undergone significant development in recent decades [29,30,31,32]. Since the creation of the erstwhile European Economic Community, the Common Agricultural Policy (CAP) [33] has been one of the 11 objectives included in Article 3 of the Treaty of Rome. Lawmakers showed concern about establishing a common regulatory framework for the primary sector, which materialized in the first CAP [33] in 1962. The CAP initially aimed to protect farmers by ensuring the viability of European production without increasing prices and prioritizing products from member states [34]. However, the introduction of product subsidies led to market imbalances and surpluses, necessitating production limits, export subsidies, and other interventions. In response to international pressures, the CAP was reformed in 1992 to enhance competitiveness, control production costs, and protect the environment. By 1999, the CAP had incorporated rural development policies and shifted away from production subsidies towards direct aid for producers. Wine policy within the CAP has evolved with unique objectives and tools, differentiating it from other agricultural policies [35]. The 1999 reform did not introduce liberalization but did provide the opportunity to expand vineyard areas for a limited list of wines. More importantly, the 1999 reform introduced the most significant measure to date for boosting the sector’s competitiveness: the restructuring and conversion of vineyards. The first attempt to liberalize vineyards was made in 2008, but this decision was reconsidered in 2013 and again in 2021.

European agricultural legislation, articulated through sectoral regulatory bodies known as Common Market Organizations (CMOs), reflects the varying situations of different products [36]. The wine CMO initially imposed no planting limitations, aiming to manage annual variations in production. Over time, it became more interventionist, limiting vineyard planting to prevent surplus growth and introducing subsidies for uprooting, conversion, distillation, and sales promotion in third countries, alongside production and labeling rules. Crucially, EU wine policy has always maintained differentiated regulations for generic wines and quality wines from a defined geographical area, ensuring targeted interventions for each category.

The changes did not significantly influence EU wine policy until 2013 when vineyards became eligible for direct aid payments while maintaining the unique nature of wine policy within the CAP. Only Spain and a few other less significant EU producers decided in 2008 to use part of their wine financial envelope for introducing direct payments for vineyards.

At the end of the 20th century, the wine sector was exposed to changes as markets were opening up due to new international commitments made in the third wave of globalization. As explained by Friedman [3], the world was becoming smaller, with technological, social, and political changes making it essential for companies or workers to be competitive in a new scenario encompassing the entire planet. In the new global scenario, European viticulture faced a significant decline in wine consumption, resulting in a surplus due to the CMO policies in place. This led to major regulatory reforms in 1999 to liberalize the sector, improve competitiveness, limit new plantations, and promote varietal and plantation reconversion. Post-2000 CAP reforms shifted from production subsidies to direct income support for producers, aiming to sustain the sector at lower levels of production.

The wine CMO needed to be reformed once again. The reforms of 2008 and 2013 attempted to simplify wine market management rules and preserve the winemaking tradition by promoting its social and environmental role in rural areas. Unlike past policy objectives, the 2008 and 2013 reforms primarily aimed to strengthen the competitiveness of EU production rather than reduce market disequilibrium. However, in a recent report by [37], it is noted that the EU’s significant regulatory and budgetary efforts to stabilize the supply and demand of the sector have yielded mediocre results. Despite the fact that about 500 million euros annually is allocated to the restructuring of EU vineyards, the European Court of Auditors reports that competitiveness is not improving, the plantation authorization regime has not yielded any progress, and there have not been any advances made in achieving the environmental objectives of the CAP. However, according to the Court of Auditors, the strengthening of European wine-production quality, particularly due to innovative measures introduced by sectoral policy, has solidified the EU’s role as a global player in the wine market.

In today’s increasingly global and standardized markets, PDOs are a guarantee of authenticity. They are geographical classifications that protect products whose quality or characteristics are considered to be due to the local geographical environment with its natural and human factors and whose production, transformation, and processing are always carried out in the defined region from which they take their name. The viticulture of Porto (Portugal) boasts of having the oldest PDO in the world, dating back to the 18th century (Marquês de Pombal, supported by Friar João de Mansilha, created the first registry of “Vinho de Porto” established in 1756). The initial phase of the PDO concept and other indications of origin within the EU dates back to 1970, with the introduction of the common policy for quality wines through Regulation 817/70. This regulation laid the foundations for the creation of protection systems that recognize and promote agricultural and food products linked to a specific region. This regulatory framework has since evolved, with the system being governed for a time by Regulation EC No. 510/2006 and Regulation EU 1151/2012 and now by the recently implemented Regulation 2024/1143. This framework sets out the requirements for the PDO, as well as the Protected Geographical Indication (PGI) and Traditional Specialty Guaranteed (TSG), ensuring that products under these denominations meet quality and authenticity standards and benefit from intellectual property rights. This system has inspired countries such as Italy, France, and Spain to develop their own PDO systems. Italy leads Europe with 23.8 million hectoliters of wine classified as PDO in 2022 [25].

In the wine world, a protected area can constitute a clear competitive advantage if it builds a reputation and develops an authentic product branding that sets it above its substitutes (e.g., French Bordeaux or Champagne; Spanish Rioja or Ribera del Duero). However, operating within a PDO also poses limitations for companies (which are the key elements that define the PDOs) as they encounter an interventionist framework and must comply with rules and controls that limit the supply of inputs (companies must use grapes from the area, even if there is a scarcity in some seasons), specify grape varieties, and mandate production methods, aging times, labeling, and alcohol level, etc. The result is a homogenous product for which companies have difficulties using differentiated marketing strategies. These specifications represent the key element of the PDOs and are defined through a bottom-up process with the involvement of the actors in the supply chain.

For example, the latest regulations of the Montilla–Moriles PDO define the geographical production area (see Figure 3), limit the grape varieties to be used (originally only five varieties, see

Table 3. Adaptations to the Montilla–Moriles PDO regulation.

	1985 Regulation	1995 Amendment	2011 Regulation	2020 Specification
Grape Varieties	Pedro Ximénez, Layrén, Baladí, Moscatel, and Torrontés	Unchanged	Subject to vineyard registration	Added foreign varieties like Verdejo, Chardonnay, Sauvignon Blanc, and Macabeo
Products	Fortified wines with aging (fino, amontillado, oloroso, palo cortado, raya) Unfortified fortified wines (ruedos) Pedro Ximénez (natural sweet and moscatel) Young white wines	Unchanged	Added types like pale cream and cream Added vinegar	Unchanged
Fine wine Alcohol Content (% vol.)	14–17.5	15–17.5	15–17.5	14.5–17

Source: Compilation based on 1985 Regulations (BOE 27-12-1985) [38], Modification of the Regulations (BOE 11-12-1995) [38], 2011 Regulations (BOJA 22-12-2011) [39] and 2020 Specifications (BOJA 3-12-2020) [28].

), and establish production methods, with predominantly fortified wines (i.e., with very high alcohol content) eligible for protection.

As seen in the table, the alcohol content of the wines is one aspect that has varied over time; in 1985, the minimum for fine wines was 14%, increasing to 15% between 1995 and 2019 and decreasing again in the latest Specification Sheet of 2020, in response to market demand for wines with less alcohol. In 2011, Montilla–Moriles vinegar was included in addition to the wines. In recent years, the Montilla–Moriles PDO has allowed for more grape varieties so that wineries have the option of producing other types of wine or even creating new products, albeit not covered by the PDO.

2.5. Strategic Plan of the Montilla–Moriles PDO

In the late 20th century, the Strategic Plan of the Montilla–Moriles PDO diagnosed the situation facing the sector and proposed some lines of action to halt the decline of viticulture in the area (see Fuentes-García and Veroz-Herradón [11]). In summary, the characteristics of the viticultural model in Montilla–Moriles at that time were as follows:

• Small-scale dryland viticulture (average farm size of 3 hectares, with 70% of farms having an area of less than 5 hectares); direct exploitation predominated (99%) over leasing or sharecropping.
• Farmers (around 4000 at the time) generally worked only part-time in the vineyards. They were typically individuals with other sources of income (wages, rents, pensions, small businesses, etc.) who supplemented their income with self-employment on their modest farms.
• Yields per hectare were low (ranging from 4000 to 9000 kg of fruit per hectare, depending on climatic conditions).
• Grape prices in the area were very low compared to better-known wine-producing regions.
• Half of all processing was carried out in cooperatives (with 14 in operation), and the other half in about 85 traditional wine presses. Cooperatives played a particularly important role in the production of the traditional sweet wine Pedro Ximénez, which was produced by three of them.
• Aging and marketing, on the other hand, were concentrated in private wineries (90%), with only 10% of commercialization done by cooperatives. The Montilla–Moriles PDO had 22 wineries that were joint-stock companies and 16 limited liability companies. Generally, the shareholders in these companies were all close relatives, with some isolated cases in which some of the shareholders were unrelated individuals. Additionally, there were 42 other individual businesses owned by one or several persons but not constituting a company. In these businesses, the activity basically involved the processing of the harvest, with very limited aging or wood maturation capacity.
• Sales were mainly oriented towards the domestic market (75–80% of sales): Andalusia, Madrid, and Catalonia. Export (20–25%) was concentrated in the Netherlands and the United Kingdom.
• In terms of pricing and consumer awareness, Montilla wines lagged behind those from Jerez and Malaga but were well ahead of those from Huelva.
• The products produced are shown in Figure 4. The production of fine wines stands out, with sweet Pedro Ximénez wines accounting for only 4% of the volume produced (in the 1999 Strategic Plan, some actions for product diversification were proposed, which have subsequently materialized).

The 1999 Strategic Plan was developed with the involvement, collaboration, and opinions of the companies that comprised the Montilla–Moriles PDO, resulting in the proposal of a series of major strategic lines, detailed in

Table 4. Strategic lines of the 1999 Strategic Plan and the main subsequent actions.

Strategic Lines from the 1999 Plan	Main Actions Performed
Viticulture - Varietal adaptation and yield improvement. - Reduction of production costs. - Improved product quality - Development of alternative ways to increase farmers’ incomes.	Inclusion of new varieties in the area, uprooting of less productive vineyards Mechanized trellis plantations Advances in organic plantations Modest development of wine tourism
Winemaking - Support and cooperation with producers - Improving professionalization and organizational structure - Increased business concentration and forward vertical integration - Diversification strategies	Incorporation of new generations of winemakers and professionals in some companies. Closure of numerous wineries and cellars Development of new products (vinegars, wines of lower alcoholic content, wines in jars, fresh or unfiltered wines, wines on the vine). Other non-PDO products (sparkling and table wines)
Aging and marketing wineries - Inter-company collaboration and stability. - Dissemination of knowledge of the product and the area. - Diversification of production and search for new uses for fortified wines. - Improvement of marketing and added value.	Some cooperation actions (wine-on-the-branch project) involving 11 companies. Organization of events (flamenco tastings, concerts, and visits to winery patios). Marketing of organic wines and young white wines. Some winery brands and terroir winemaking

Source: Own elaboration based on information from Fuentes-García and Veroz-Herradón [11], Fuentes-García et al. [29], Garzón et al. [4], Consejo Regulador [8].

. Since then, progress has been made on some actions, although companies have not always had the resources or, in some cases, the willingness to change traditions and routines. The following table summarizes some actions in the three main phases of the value chain.

2.6. SWOT Analysis and Current Situation of the Montilla–Moriles PDO

As a synthesis of the current situation in the Montilla–Moriles area, we have developed a matrix that updates the internal analysis of the area (with its strengths and weaknesses) and the external factors affecting it (with its threats and opportunities) (see

Table 5. SWOT analysis of the current Montilla–Moriles wine industry.

Weaknesses	Threats
✓ Small-scale farming and part-time dedication of vine growers ✓ Small business size of wineries ✓ Dry farming with irregular harvests ✓ Lack of strong brands ✓ Wines with high alcohol content ✓ Lack of promotional resources ✓ Low volume of bottled sales with own brands ✓ Domestic market concentrated in small areas ✓ Limited sales abroad ✓ Generally low selling prices and price wars ✓ Lack of unity within the sector ✓ Image problems in the region ✓ Rising production costs of wines ✓ Significant sales of private-label brands ✓ Low profitability	✓ Threat of climate change ✓ Strength and profitability of alternative crops (olive groves) ✓ Decrease in available labor for viticulture and generational turnover ✓ Decline in wine consumption, especially of fortified wines ✓ Competition from other producing regions ✓ Social pressure (negative image and campaigns to reduce alcohol consumption) ✓ Existence of substitute products ✓ Emergence of emerging producing countries ✓ Lack of negotiating power against distribution
Strengths	Opportunities
✓ Winemaking tradition in the area ✓ Suitability of the physical environment for vineyards ✓ Singularity of the area’s vineyard landscape values ✓ Maintenance of the best vineyard plots in the area ✓ Modern viticulture with advanced technology ✓ Growth of vines on trellises ✓ Product quality ✓ Owners’ high involvement in and attachment to the companies ✓ Good value for money	✓ Associating wine with tourism: wine tourism ✓ Growing variety of products ✓ Organic viticulture ✓ Opportunities in foreign markets, even for small producers ✓ Public support institutions (ICEX, TRADE) ✓ Increase in the consumption of quality wines ✓ Rise of wine clubs ✓ Opportunities in hospitality and catering due to the tourism boom ✓ Use of wooden containers for spirits

Source: Prepared by the authors based on interviews and on Fuentes-García and Veroz-Herradón [29], Consejería de Agricultura [8], Garzón et al. [4], Ministerio de Agricultura [40].

). Unlike other Spanish PDOs, we highlight the low volume of exports from the Cordoba region, where sales are highly concentrated in local markets with low prices. The main threats stem from the competition posed by olive cultivation, which is replacing vineyards due to its lower labor requirements and higher profitability. Additionally, the global increase in demand for olive oil, driven by the worldwide spread of the Mediterranean diet as a health model, also contributes to this trend.

Finally,

Table 6. Comparison of the number of active companies.

Companies	In 1999	In 2023	%Variation
Winegrowers	4338	1617	−63%
Wineries	83	33	−60%
Cooperatives with vine-growing activity (several of them also olive growers)	14	8	−36%
Wineries for aging	68	52	−24%

Source: Own elaboration based on Fuentes-García and Veroz-Herradón [11], Fuentes-García et al. [29], and Consejo Regulador [8].

details the change in the number of companies in Montilla–Moriles over the years. Farmers’ abandonment of viticulture (a decrease of 63%) is even more pronounced than the decrease in land area; at the same time, numerous presses have closed (60%). Regarding cooperatives, the decline is less marked; in general, they have undergone a conversion and increased olive oil production activity while reducing wine activity. Aging wineries resist somewhat better, as 52 companies remain active (3 out of every 4 existing at the beginning of the century). This destruction of companies that make up the direct value chain of Montilla–Moriles will undoubtedly have also affected auxiliary companies (service companies, transportation, maintenance, packaging, etc.) and indirect employment in the sector.

The crisis in fortified wines has also hit other Andalusian regions. In Jerez–Xérêz–Sherry, where the companies are larger, there has also been a reduction in vineyard area, and several of the large Jerez wineries are being sold or receiving new shareholders from foreign capital (the Chinese multinational Fosun acquired 20% of the Osborne group, but later divested; Terry and Harveys came under the ownership of Emperador, a Filipino capital company; the Japanese company Suntory acquired Domecq, Whisky DYC, and Larios; and the Scottish Macallan group now controls the Estevez group).

3. Materials and Methods

According to the theoretical approaches to the concept of resilience outlined by Chingay, Alfaro [41], and Vaquiro Capera [33], although it is an innate capacity of individuals, it also extends to organizations and the way their knowledge and interaction with the environment enables them to achieve survival and growth. Explicit resilient behavior is observed in difficult times, even when it involves uncertainty and risk, and is thus associated with competitiveness. The literature highlights that resilient companies exhibit long-term approaches to growth, technological learning, continuous improvement, responsiveness to disruptive contexts, and the identification of opportunities. Rodríguez-Sánchez et al. [42] define business resilience as the ability to recover and come back from adversity, risk, and failure and subsequently even aim to achieve positive change [42].

Given the complexity of determining which companies are resilient in a sector as diverse and fragmented as viticulture (as we will see below), qualitative research techniques must be used. We have applied an integrative methodology that includes an exploratory analysis of both qualitative and statistical aspects along with concepts of strategic analysis, concluding with case studies. Thus, it is an interpretative approach that draws on objective sectoral data to define the existing strategic problem (weaknesses and threats) and interpret which companies know how to seize opportunities and thrive.

To this end, we have studied three companies: Bodegas Robles, Lagar de la Salud, and Tonelería del Sur–Casknolia. These companies were selected for their ability to buck the general industry trend by achieving growth, their use of diverse strategies, and their role in revitalizing the wine market in Montilla–Moriles. We chose a case study approach [43] to delve into their specific strategies and understand how these companies manage to thrive in a challenging environment.

To identify companies that have increased their sales in recent years (in contrast to the general decline in the industry), sales figures were sourced from the SABI database (Sistema de Análisis de Balances Ibéricos) [44]. This database contains the financial statements filed in the commercial registry of Spanish and Portuguese companies. By comparing company revenues from 2018 until 2022, two wineries from Montilla–Moriles (Bodegas Robles and Lagar de la Salud) and several auxiliary companies, including Tonelería del Sur (Casknolia), were identified as having registered a significant increase. Subsequently, the managers of the three companies were contacted and interviewed to gain a better understanding of the distinctive characteristics and strategic projects of their businesses.

We have chosen three cases that can be considered to represent successful strategies with potential for the future: Bodegas Robles, a family-owned winery (almost a century old); Lagar la Salud, a recently founded winery; and Tonelería del Sur–Casknolia, an artisan cooperage serving an international market. While other companies could have been chosen, we believe these three initiatives represent very different approaches that combine tradition and innovation, two concepts that can paradoxically converge. An interview was conducted with the manager of each company, addressing topics such as the current state of the company, its evolution, and future prospects. These interviews specifically focused on the production and consumption of Montilla–Moriles PDO wines.

We will conclude by extracting lessons about the strategies that are working best for companies in the sector that have been successful, where others are falling behind or even closing down. Ultimately, we aim to provide useful benchmarking information for other actors in the sector to use for learning, reflection, or imitation. As Yaniv [45] indicates, a theoretical construct has no value if it is not reducible to specific observations. Therefore, studying the behavior of an economic sector such as local viniculture, influenced by a global playing field, requires a focus on specific business experiences.

The approach that seems most appropriate to us is to search for the existence of dynamic capabilities in successful companies; indeed, this approach has been used by other authors to analyze the international performance of companies (for example, Ledesma Chaves [46]). Teece and Pisano [47] define dynamic capabilities as a company’s ability to respond appropriately and rapidly to changing circumstances by effectively building, coordinating, and reconfiguring external and internal competencies. Lee et al. [48] view dynamic capabilities as a source of sustainable advantage in fast-changing Schumpeterian regimes. Meanwhile, Pavlou and El Sawy [49] argue that dynamic capabilities allow firms to address turbulent situations by helping to shape existing operational capabilities into new models better adapted to the current environment.

Consequently, in this work, we attempt to define the strategic problems facing the sector and explore how some companies develop organizational capabilities that are better adapted to their environment than those of their competitors.

4. Case Study Results

Given the adverse circumstances we have described above, with new consumer preferences and compelling data showing the extent of the destruction of the industrial fabric, Montilla–Moriles is not going through a passing crisis but rather an uninterrupted decline. However, in this section, we will provide examples of some companies that are embracing new strategies, experiencing growth, and presenting a more promising future.

The key features of the three analyzed companies are summarized below.

4.1. Bodegas Robles

Bodegas Robles is a family-owned company that has undergone a radical transformation and has adopted eco-friendly practices to differentiate itself from rival companies. Founded in 1927, it benefited from the period of economic growth that the region experienced during the 20th century, which allowed it to consolidate and expand in the wine market. In 1988, when many wineries in Cordoba were already closing, Francisco and Pilar Robles, the third generation of the family, joined the company and realized that it was not feasible to run a modest-sized winery without a promotional budget and during price wars. New initiatives were needed to generate added value by differentiating the product.

Thus, in the 1990s, Bodegas Robles embarked on a diversification strategy and launched a wine with tropical fruits fermented with grape juice; however, its commercialization was challenging, and it did see large volumes. Later, in 1999, they embarked on organic viticulture that was pioneering not only in the area but also nationwide. These and other initiatives have been supported by collaboration with public institutions (IFAPA—Institute of Agrarian and Fisheries Training, the University of Cordoba, ICEX, and EXTENDA), or they have sought collaborators in other companies (cheese or olive oil producers) and various associations. As a result of such collaborations, many new grape-based products have been launched, although these products are often unconventional and not covered by the Montilla–Moriles PDO. However, they also maintain traditional product lines from the PDO, but always with organic certification. In addition, the company has achieved synergies by collaborating with renowned Michelin-starred chefs to create new products and revive ingredients from ancient recipes, such as Agraz–Verjus, a delicate and fragrant seasoning from Andalusian cuisine, made from the pressed juice of grapes from the Robles family’s organic vineyard in Montilla.

Their latest release in 2023 was a limited-edition wine celebrating the Pedro Ximénez grape with just 10% alcohol content. It preserves the natural carbonation and offers aromas of tart apple and fresh pear, providing a refreshing and subtle option for wine lovers seeking to experience the purity of the Pedro Ximénez grape and the essence of the annual harvest (specifically targeted at a younger clientele who are currently the furthest removed from traditional Montilla wines).

The company demonstrates its commitment to sustainability through innovative packaging practices. Some of their products use a returnable model and vacuum-sealed bags accompanied by reusable bottles. This diverse range of organic and unique products has enabled Bodegas Robles to advance in demanding international markets such as the UK, Germany, and France. They also have a presence in the United States, Australia, Japan, Taiwan, and Northern Europe, strengthening their image as a global leader in organic wines. They currently have a presence on all five continents and are exporting to 20 countries. The company’s innovation and creativity have also enabled a significant collaborative economy and social media activity (for example, the “follow your vine” project aims to generate emotional connections with countryside and wine enthusiasts, who are new market niches). Figure 5 shows how, in recent years, the company has been improving income per liter of wine produced year on year, which is indicative of the success of its initiatives in line with new social values. It has also received numerous international awards and recognitions.

4.2. Lagar la Salud Winery

This company was founded in 2017 based on the initiative of two young entrepreneurs, Miguel Puig, who contributed a nine-hectare family estate of trellised vineyards and an old, abandoned winery in the Pago de la Salud area of Montilla, and Fátima Ceballos, an oenologist, and engineer trained in France. These entrepreneurs met in France (where the former was working at Airbus and the latter at a winery in Languedoc). After various trips to many wine regions and wineries in Provence, South Africa, Rhône, Bordeaux, and Penedès, they set up the renovated Lagar de la Salud and launched their brand, Dulas (health in Spanish, spelled backward) with the idea of changing the perspective and leveraging the potential of Montilla’s terroir.

Lagar de la Salud mainly uses the Pedro Ximénez grape, which is common in the area, and the French Cabernet Sauvignon, a red grape widely used in various regions of the world. They transformed the vineyard into an organic one and fermented the wine with indigenous yeasts from the area, carefully overseeing the process and applying Fátima’s expertise. They produce single-estate wines that take advantage of the different types of soil, limestone levels, sands, and iron from the six plots that make up the estate, allowing for various wine elaborations from the same grape variety and establishing a connection between the land and the products. In 2018, they began directly marketing their wines, aiming for a younger and more modern product tailored to market trends, with a focus on excellence and quality rather than production volume. They have already achieved their goal of selling 15,000 bottles per year with considerable added value.

Lagar de la Salud’s wine range includes young white wines made from the Pedro Ximénez grape with just 13% alcohol (protected by the Montilla–Moriles PDO), and they also produce red wines using classic French barrels and rosé wines from the Cabernet Sauvignon grape. The company also curates its website (available in Spanish and English) and social media, conveying an image of simplicity and authenticity. Their posts are accompanied by meticulously taken photographs that attract followers and likes. Today, Lagar de la Salud has clients throughout Spain (mainly Andalusia, Madrid, Levante, and Catalonia), but they are focusing on international markets and already sell a significant proportion of their products in Belgium, the Netherlands, China, France, and Germany. The evolution of the sales figures of this small winery demonstrates that there are opportunities to thrive and add value to Montilla’s production (see Figure 6). These results are sourced from the SABI database [44,50].

4.3. Tonelería del Sur–Casknolia

Another example of dynamism can be found in the cooperages in Montilla; we have chosen Tonelería del Sur as a third success story, an auxiliary company that is a driving force for value generation and international outreach. In the south of Cordoba, the manufacturing and repair of barrels began in the 19th century, and the production of large-capacity barrels, known here as bota, became standardized (A traditional bota typically has a capacity of 30 to 32 arrobas, which equals about 500 L of wine). These barrels are stacked for aging fino, oloroso, and amontillado wines in the solera and criadera system. This container was traditionally used for exporting wines from Jerez, Malaga, and Montilla. Furthermore, the barrels were reused in the British Isles because the wood infused with the characteristic Andalusian fortified wine imparts ideal flavors and aromas to produce other beverages, particularly whisky, bourbon, rum, or gin.

When Andalusian viticulture declined in the 20th century, coopers also suffered the consequences, and some craftsmen abandoned the activity. Today, there are five cooperages in the area, which have had to reinvent themselves by internationalizing, as there is a high demand for barrels abroad. As seen in Figure 7, the cooperage business is currently thriving. The rapid increase observed in the middle of the analyzed period is due to the internationalization of Montilla’s cooperages, such as Tonelería del Sur–Casknolia. These companies reinvented themselves and sought new international markets, driven by the high demand for barrels abroad. Innovation in sustainable processes and the restoration of historical barrels also contributed to their success and global expansion.

Tonelería del Sur–Casknolia, based in Montilla, is one of the leading cooperages in the area, and its origins lie in the craftsmanship initiated by Rafael Cabello in 1974. Today, it manufactures bespoke barrels primarily for international clients, particularly distilleries that produce high-end spirits. The barrels stand out for their quality construction but also because they are seasoned with the finest wines from Andalusia, which prepare the wood to impart unique aromas and flavors characteristic of the wines from the region (such as fino, oloroso, amontillado, cream, Pedro Ximénez, etc.), transferring them to their clients’ beverages.

Tonelería del Sur has embraced the legacy of tradition rooted in culture, building its Casknolia brand and preserving the method and essence of a craft that has been perfected over the centuries, generation after generation. The company offers a product tailored to the customer’s specifications (regarding wood type, seasoning, toasting level, format, etc.), with a design and finish that allows for distinctive colors and engravings on the barrels to facilitate differentiation for each client.

Casknolia also symbolizes innovation in sustainable systems and processes, as exemplified by the ecological barrel seasoning project in collaboration with Bodegas Robles. This idea has been enthusiastically embraced by the industry, as an increasing number of distilleries are opting to produce 100% organic spirits. The company also maintains its historic line, based on the restoration of barrels from historic wineries, preferably from the Jerez and Montilla–Moriles regions, although also from other wine-producing regions in Spain and abroad. This provides a second useful life for barrels, whose value (after restoration by the coopers) increases considerably as they become unique craftsmanship pieces that retain the essence of the historical wines they have contained, with the added guarantee of review by a specialized company.

One of its latest creations, Casknolia chips (wood shavings from the staves of the barrels), is another demonstration of its commitment to sustainability. A specific process has been incorporated to extract these wood chips that were previously discarded during the process. Now, artisans work on the staves to extract the shavings in a non-invasive manner, aiming to preserve their flavor and use them for smoking in gourmet kitchens.

Today, Tonelería del Sur generates almost 5 million euros annually, with revenues coming from 32 countries. From the Goa region in India to Kentucky, the birthplace of bourbon in the US, passing through China, Russia, Scandinavia, Germany, and, of course, Scotland, the Casknolia brand can be found on all continents and has established itself as a premium barrel brand for spirits. Furthermore, numerous awards highlight the value of cooperage craftsmanship, the circular economy, and brand strategy, earning Casknolia various recognitions, including the “Global Icon of Whisky: Best Cooperage in the World” award for the last two years (2023 and 2024), and recognition as the best cooperage in the world at the World Whiskies Awards.

5. Discussion

These companies demonstrate how innovation, sustainability, and market strategy can transform traditional industries and open up new opportunities in a competitive environment [51,52]. Bodegas Robles stands out for its innovation in organic and sustainable products, as well as its ability to attract a young audience and establish itself in international markets. Its focus on sustainability, complemented by collaborations with renowned chefs, has boosted its global recognition and increased its revenue.

Lagar de la Salud has achieved notable growth by focusing on the quality of its organic wines. Its strategy of targeting international markets and connecting deeply with young consumers illustrates how quality and a strong customer connection can lead to significant success, even in a competitive market.

Tonelería del Sur–Casknolia, on the other hand, has revitalized the cooperage industry by combining traditional craftsmanship with sustainable practices. Its emphasis on barrel customization and innovation in ecological processes has allowed the company to thrive globally and earn international recognition.

The important and traditional viticulture in the south of Spain is generally fragmented, where tradition represents both a value and a barrier to strategic and organizational change. Data have been provided on how viticulture is undergoing a global restructuring, with increased consumption in non-traditional markets and reduced demand in the Mediterranean basin, leading to significant growth in the international wine trade and opportunities for companies engaged in international activities.

At a micro level, regions are striving to compete with wine as a differentiated product, moving away from commoditized products. In Europe, PDOs have long represented the tool used to create categories of unique products, which in some cases become valuable brands shared by producers from a geographical area. However, rapidly changing trends in wine demand and fashion often clash with the rigidity imposed by PDO regulations. Adaptation or conversion of vine varieties is not immediate (they require investments, and it takes time for new vines to become productive). Wineries must innovate and change their production processes, sometimes breaking with the traditions of their area, which can ultimately lead to the demise of weaker denominations focused solely on local consumption.

6. Conclusions

The crisis in Montilla–Moriles is not merely temporary; rather, it represents a continuous decline, exacerbated by new consumer preferences and the destruction of the industrial fabric. However, some companies in the region are adopting innovative strategies that allow them to grow and present a promising future.

The challenges and problems faced by the vineyards in Cordoba are very complex. Of course, there are no easy or immediate solutions; however, this study shows that there are companies rooted in the knowledge and experience of Montilla–Moriles that can create viable and competitive new business models. These companies stand out for their dynamic capabilities, meaning they have the potential to solve problems, are open to detecting opportunities and threats, make timely and market-oriented decisions, and adapt their resource base if necessary. In the companies provided as success cases, we find some key factors that can inspire other companies:

• Mastery of traditional techniques and leveraging local knowledge.
• Innovation in products, with constant new releases that balance and enrich the product portfolio.
• Offering differentiated products from the region based on quality and distinct attributes, focusing on value rather than costs.
• Concern for sustainability and striving to project an image of responsibility.
• Targeting segments that are underserved or underexploited by local wineries (knowledgeable and young customers).
• Orienting towards international markets and emerging trends far removed from the domestic market.

This work has some limitations. Only one wine PDO wine is analyzed (there are currently more than 70 in Spain alone), and only a very small number of companies have been analyzed, so there may be biases in the conclusions. As future lines of research, it would be worth comparing the Montilla–Moriles PDO with the rest of the Andalusian PDOs and other areas specializing in fortified wines. It would also be advisable to monitor the trajectory of the cases analyzed in a few years to confirm whether they have managed to maintain their successful path.