What happens when Argentina's price/quality seduction is no longer as intoxicating?
That’s the central question posed in the new Argentina Wine Report from the Sociedad Argentina del Vino (SAV). Los Andes’ Gabriela Malizia says the report chronicles the market share gains Argentine wines made abroad in the wake of the 2008-09 crisis. Those gains in countries like the U.S. were made in large part due to “trade down,” the lower price/equal quality purchasing shift increasingly made by foreign wine drinkers since 2008.
Looking forward, the analysis sounds a note of caution: “If the world enters a prolonged downturn in the coming months, that will complicate issues for several countries like Argentina whose growth in recent years has been based on exports.” The SAV says the supply of Malbec grapes, especially from the Uco Valley, is not on par with demand, and increasing production costs at home have already weakened Argentine exporters share abroad in the US$15-20/bottle segment.
On the positive side, Argentina’s market share gains went from 3.6% (2008) to 6.1% (2010) in the U.S. and 3.8% (2008) to 6.2% (2010) in Canada, although gains have leveled off in both countries in 2011. From the end of 2009 to today, Argentina only gained 0.7% of additional market share in the 5 largest export markets, a reflection of the waning advantage of “trade down” once the global economy showed signs of stability post-2009.
Going forward, the growth of Argentine wine exports “will be tied more strongly to internal changes made by individual vineyards to maintain their competitiveness,” concludes Malizia. (Full Story in Spanish)
For more information about Argentine wines and industry trends, download the new issue of InvestBA Privada.
The Big 3: Only the U.S. and Canada purchase more Argentine wine than Brazil. (Source: Jornal do Comercio)
The Portuguese accents and “Muito Obrigados” covering the Masters of Food & Wine barrel in the lobby of the Park Hyatt Mendoza were a good clue earlier this year. Now, mid-year wine export numbers and a Trapiche study of consumption habits confirm Brazil’s untapped upside as a consumer of Argentine wine and wine tourism.
On assignment in Mendoza, Luiz Guimarães of Jornal do Comercio says Brazil is now the #3 importer of Argentine wine after the U.S. and Canada. In January, Brazil ranked 4th behind the U.K., but double-digit growth (14.7%) in the first half of 2011 catapulted our South American neighbors into the Big 3. U.K. consumption over the same period rose less than 3%.
Phenomenal upside in Brazil is confirmed in the results of a new market study commissioned by Trapiche. Brazilians drink less than 2 liters of wine per capita annually (Argentines drink 30), and the new middle class that has emerged in Brazil over the past decade is the same size as the entire population of Argentina, 40 million. Guimarães says wineries like Trapiche are seeing record sales growth at all price levels in Brazil including the US$10-20 per bottle range.
Argentina’s seduction of Brazilian palates is also luring more tourists to Argentina’s vineyards and wine trails. In today’s Diario de Pernambuco, a group of Brazilians tour 14 vineyards in Mendoza and Salta, and Shirley Pacelli shares the best of each vineyard with the readers back home. At Trapiche, it was the video presentation. At Pulenta, the Porsches. In Cafayate, it was the natural beauty and Torrontes. And at Tupungato Winelands, it was the opportunity to buy your own vineyard.
While Pacelli says the majority of owners at Tupungato Winelands are from the U.S. and Europe, it’s not hard to envision some Brazilian neighbors in the near future. (Full Story in Portuguese)
Private vineyards, tech incubators, road races and polo legends all featured in the new issue of Privada.
Today marks the first day of spring in the Southern Cone, so we’re celebrating with the new issue of InvestBA Privada.
The Primavera 2011 issue is a whirlwind journey from artist galleries and road races in Buenos Aires to private vineyards in Mendoza to real estate in Punta del Este and sunsets in Jose Ignacio.
Spring means creativity is blooming, so we’ll tour the new Buenos Aires Tech District, travel to San Rafael for the Grand Opening of a Hollywood Burger franchise, check out the new wave of condo-hotels in Argentina and find out what A-list celebrities are buying vineyards in the Uco Valley.
Spring also means polo in Buenos Aires, and we preview the three jewels of the Triple Crown, look under the hood of the new Audi La Dolfina Q7 and count down the Top 10 polo players in the world including Argentines Pablo Mac Donough, Facundo Pieres and Adolfo Cambiaso. After a few chukkers, we’ll check-in for sunset at the Estancia Vik and find out how a luxury hotel and modern art merge to create a 4,000 acre shrine to the best of Uruguay.
To request your copy of InvestBA Privada, simply fill out the form below.
Organic farms like this one in coastal Uruguay are drawing a new crop of foreign visitors.
With spring upon us and the growing season ready for liftoff, agricultural activities in Argentina and Uruguay are becoming more organic and attracting more foreign tourists in the process. According to FreshPlaza.com, Argentina now has the second largest land area dedicated to organic production.
Argentina’s 10 million organic acres are only surpassed by Australia with 30 million; the U.S., China and Brazil all have fewer than 5 million acres under production. Organic fruit accounts for 36% of Argentina’s foreign sales while juices and wines account for 8%, a figure that will rise as more Argentine wineries add organic offerings to their product mix.
When asked why organic makes sense in Argentina, one of the owners of Jean Bousquet in Mendoza told iEco, “Argentina is virgin, it’s organic, there is good drainage, good rainfall. If we go organic, the grape is healthier. We win in terms of quality even though it is more expensive, because obviously it’s easier to treat with pesticides.” The extra effort is paying off, as the Tupungato vineyard’s Malbec Gran Reserva 2008 was chosen Best Argentine Wine at the 2010 International Wine Challenge.
While organic farming is booming on this side of the River Plate, agritourism is on the rise in Uruguay, according to El Observador. Uruguay now has over 100 businesses, farms and estancias dedicated to “turismo rural” which is a real draw for foreign tourists looking for a unique travel experience where they can roll up their sleeves and reconnect with nature.
Alicia Morales, the VP of SUTUR, the Uruguay Rural Tourism Organization, explains the draw of rural tourism in Uruguay: “Uruguay receives a wealth of foreign visitors interested in rural tourism, in the tranquility of our countryside, in the freedom to unwind and above all enjoy the security and hospitality of our estancias.” (Full Story in Spanish)
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