Brands and the expansion of the sherry exports, 1920-1980

This paper looks at the role of brands in the expansion of sherry exports into the UK during the 20th century. From 1920, the leading Spanish sherry firms (Domecq and González Byass) popularized their own brands through wide advertising campaigns and increased their commitment with the import market establishing distribution alliances and subsidiaries. The sale of their own brands allowed firms to overcome the reputation problems that had caused a decline of exports from 1870 onwards. During the second half of the 20th century the advertising budget of the firms increased even more, allowing exports to multiply by 7 between 1950 and 1980, and placing sherry as the second alcoholic beverage consumed in the UK after beer. The increasing competition placed by imitators and new entrants selling at lower prices to overtake the market power of leading brands, led Spanish leading firms to cut margins and compete on prices during the 1970s. The profitability of the sherry business declined in the UK, but the marketing knowledge acquired by the use of brands and the increasing integration into distribution allowed Spanish leading firms (especially Domecq) to grow internationally.