Olive Oil

With global demand & changing consumption patterns, olive oil has grown into a $10 billion dollar industry.

Of all the agribusiness investment opportunities in Argentina and Uruguay, olive oil estates are some of the youngest and most promising. Increasingly health conscious consumers in foreign countries are stoking global demand for olive oil which has tremendous health benefits including heart disease protection and colon cancer prevention. Industry publication Olive Oil Times says Argentina has capitalized on growing demand in both aging and emerging markets like China and recent droughts in the Mediterranean to emerge as a major producer of aceite de oliva. The online magazine features an interview with Luis Feld, agribusiness expert, former president of the Terranova winery and current owner of a large olive oil estate in the Cuyo region that produces the Vero Andino product line. Even though Feld only planted his first trees five years ago, the success prompted his group to launch a company that markets and sells fractional ownership opportunities in other Cuyo-based olive oil estates. With global consumption approaching 3 million tons per year and average price per ton around US$3,600, we are talking about a roughly US$10 billion industry. In addition to annual rents of 18-20%, the group touts olive oil fractionals as “an attractive alternative for those who believe land, water and agribusiness are strategic businesses of the future.” For more information on agribusiness opportunities in Argentina and Uruguay, visit our archives or download the July 2010 edition of InvestBA Privada.

Global Wine Production Cost Comparison

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 playing in this month’s 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 click here, and for a closer look at Mendoza vineyards for sale, download the July edition of InvestBA Privada.

Fashionistas Find Paradise in Argentina

Lucire Cardon

BA-based Cardon is one of Argentina's fashion retailers recommended by Lucire for their quality.

Buenos Aires has long been synonymous with fashion, so it seems only natural that Lucire, the global fashion magazine, would pay a visit to Argentina. With Town & Country, editor Elyse Glickman gives Lucire readers a sweeping travelogue of two of the country’s most fashionable destinations: Buenos Aires (Town) and Mendoza (Country). From Recoleta’s boutiques to Palermo Soho to high-end malls like Patio Bullrich and Gallerías Pacífico, Glickman is impressed by the low cost/high quality of the clothes and shoes she encounters. She describes Cardon garments as possessing “workmanship that would make Ralph Lauren green with envy,” and declares the local shoe stores “particularly fabulous, not only for the quality-to-price ratio but also the shopping environments, which are part-tea salon, part-walk-in closet and part-couture boutique.” When it comes to fashion, Mendoza doesn’t play second bandoleón to Buenos Aires, although Glickman confesses to being taken by surprise. “What makes Mendoza—state and city—so memorable is that its charm and sophistication sneak up on you.”  She comes away impressed with the “seemingly endless offering of (more) leather goods, sweet shops doling out divine ice cream and sorbet, unprepossessing clothing stores and craft boutiques that are refreshingly un-kitschy.” Mendoza, she later discovers, also offers professional shoppers a picturesque place to unwind and raise a malbec toast after a stressful day of credit card swiping. In the post-shop analysis, she says, Argentina leaves you “with a sense of pride and the memory of sensory pleasure.” At least until the AMEX statement arrives. (Full Story)

InvestBA Privada

Extra, extra! The first issue of our premium content e-newsletter, InvestBA Privada, arrives on Friday.

After several months of planning and design, we’re very pleased to announce the arrival of our premium content e-newsletter, InvestBA Privada. While the blog often gravitates toward current events, Privada gives our readers a much closer look at macroeconomic trends in Argentina and Uruguay, detailed investment opportunities and general lifestyle topics like golf, wine and polo. In the July issue, for example, we profile commercial properties from Mendoza to Montevideo, feature some very unique Argentine wines and size-up the Argentine and Uruguayan teams preparing for this month’s World Cup. We also profile a beautiful new luxury golf development in Buenos Aires and several historic properties in Montevideo’s Ciudad Vieja, recently featured by NuWire Investor. Future Privadas will feature cultural, legal and financial advice, as well as one-on-one interviews with local business and design professionals. If you would like to receive Privada, just click here. While you’re signing up, be sure to tell us what type of content you would like to see in future editions. And because we hate spam (el spam here in Argentina) as much as you do, your information will not be shared with any third parties. The only item you receive from us will be the bi-monthly Privada. ¡Disfrútalo!

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Harvest 2010

Production was down, but the 2010 vintage is already being compared with '02. (Photo: Die Guito)

“Better Late Than Never.” That’s how Wine Spectator describes the 2010 harvest in Argentina, a year marked by a slow sugar start, some potentially-damaging weather fluctuations and, ultimately, a lower level of wine production compared to 2009. But fear not, the finished product is still outstanding. “Argentinean winemakers are pleased with lower alcohol levels and ripe tannins which they believe have produced an elegant vintage,” writes James Molesworth. That’s the general consensus from the various winemakers interviewed by WS including Bodegas O. Fournier, Achával-Ferrer and Bodega Catena Zapata. Yields were down anywhere from 10-25% for most of the vineyards in Mendoza, but the lower alcohol levels have produced some beautifully-balanced tempranillos and syrahs. Across the border in Chile, Molesworth says the 2010 growing season was hurt by the earthquake, although some “cool-climate varieties such as Sauvignon Blanc and Pinot Noir” fared well. In other regional wine news, one Chilean producer hopes to boost sales by reaching out to a unlikely group of oenophiles: football fans. Concha y Toro, Chile’s largest exporter of branded wines, just inked a deal with the UK’s Manchester United and will begin advertising alongside Budweiser at home games in the legendary club’s Old Trafford stadium. A Man U rep tried to explain the deal’s synergy, “This is a partnership that unites the two great passions in Latin America: football and wine.” Despite the enthusiasm and Concha’s creative attempt to reach more Asian buyers, we’re not anticipating a Malbec Lounge at the Monumental or Tuesday Tastings at the Bombonera anytime soon. (Wine Spectator 2010 Southern Hemisphere Harvest Report)

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