Napa vineyards like this one have struggled while Argentina growers gain market share.
There’s nothing like a recession to test the limits of discretionary spending and consumer willingness to downshift to more affordable products and services. This has been especially true for U.S. wine lovers who, according to Bloomberg’s Dan Levy, are often passing up Super Premium and Ultra Premium wines in favor of “cheaper imports from countries such as Chile, Argentina and Australia.” In light of shifting preferences, the Wall Street Journal recently featured a video taste test of several “good $10 bottles of wine”…many of them malbecs from Argentina. To be sure, 2009 was a banner year for the Argentine wine industry where—despite the recession—global exports actually increased 10% to $585 million while U.S. sales jumped 20%. Sales of bargain wine imports have had an impact on Napa Valley where Bloomberg says land values have fallen 15% since 2007 and no fewer than 10 wineries will change hands this year in distressed sales. Still, don’t expect the recent drop in Napa’s property values—average price of $150,000 per acre planted with red varietals—to erode Argentina’s attraction for foreign investors and wine enthusiasts. For the same $150,000, you could buy a 7-acre vineyard in Mendoza complete with five-year old malbec grapes, Internet access and homesite with underground utilities for your private villa.
For more information about investment opportunities in Argentina wine country, send your inquiry to in@investba.com.
