The Metrics of Wine Favor Argentine Growers

Let this ferment: Grape price and yield per acre are the key variables global vintners must consider.

Global investors must weigh a variety of factors like country risk, capital controls and transparency before choosing where in the world to invest. But what about winemakers?

The number of wine producing countries (70) is over twice the number of teams that compete in a World Cup (32). Plus global grape production (675 million quintals last year) was widely distributed across Europe (44%), Asia (26%), Americas (21%), Africa (6%) and Oceania (3%).

With so many choices, what’s a future global vintner to do? Focus on the key metrics, grape prices and yield per hectare (1 ha = 2.47 acres), says Davidson Viticulture, a leading Australian viticulture consulting group. When it comes to grape prices, three of the world’s most attractive markets are Argentina ($2,354/ha), Chile ($2,480/ha) and South Africa ($2,051/ha).

At 15-20 tons/ha, California leads the global ranking in terms of average yield compared to 10-15 tons/ha for Argentina and Chile; yet, factor in California’s six-figure cost per acre and South America vineyards begin to make more sense for those seeking lower initial cash outlay and quicker ROI. Furthermore, Davidson says advanced technology and irrigation techniques give growers in regions like California and Australia “no real advantage” over the world’s other warm climate regions like South America and South Africa.

For more Argentina wine and vineyard news, download the new issue of InvestBA Privada and for more information about private vineyard ownership opportunities, visit Algodon Wine Estates.