The other day I saw an article about how even during these down economic times, Argentina’s wine industry is still flourishing. In the article written by Maximilian Heath entitled “Argentine Wine Exports Seen Growing Despite Crisis”, heath says that Argentina’s foreign wine sales totaled $446.7 million through September, well ahead of the $346.2 million it exported during the same period last year. In 2007, exports reached a record $482.3 million.
It’s pretty telling when you see this trend because wine is something that’s usually considered a luxury product. Naturally, when times are hard, luxury purchases are the first things consumers cut out. I’ve always known and have heard how Argentina’s wine industry has been steadily growing, but the continued rise of the popularity of their wines especially during these challenging times shows the kinds of strides this country is making on the international wine scene.
In fact, what’s happening now in this industry is a far cry from Argentina’s early rotgut producing days where quantity was more important than quality. When local demand started to drop, the industry started moving towards improving quality for the export markets. Argentina trails only Australia, Spain, France and Italy on the world stage in terms of production. Here are some reasons why we should be excited about what’s going on in Argentina.
Foreign investment from top tier producers – Not only do Argentinians see the potential of their land, but so do the best and brightest from the international wine community. Well-known producers such as Paul Hobbs (Vina Cobos), Donald Hess of Hess Winery (Colome) from the US; Michel Rolland (Andeluna & Clos de los Siete) and Pierre Lurton of Cheval Blanc (Terazzas de los Andes) from France are just a few of the big names investing in Argentina. These foreign investors and winemakers bring with them a wealth of experience and wine making know-how and the transfer of knowledge will only help such a fledgling industry in the years ahead. The influx of money has also allowed many properties to replant old and damaged vineyards and to also upgrade outdated equipment with shiny, modern newfangled ones.
Terrific grape growing environment – Argentine vineyards are an oases of green set in an arid, dry and semi-desert environment. The altitudes in which they flourish would be unthinkable in Europe, with elevations regularly reaching between 2,300 and 4,600 ft. with some vineyards even reaching as high as 9,080 ft. Although it would seem nothing could thrive in an environment in these conditions, the plentiful water from the Andes snow melt are more than enough to irrigate the acres of vineyards below the vast mountain range. The high altitudes also provide a consistent overnight temperature to help produce well-flavored, deeply colored grapes for red wine and helps preserve acids and aromas in white wines. With little or no disease in the dry mountain air, vines are also able to grow with little hindrance from vine pests and disease.
Good quality at good price points – Cheap labor and land are big drivers behind foreign investment into Argentina. These lower production costs allow producers to make lower priced bottles without necessarily compromising quality. This is a terrific value situation that ultimately benefits the customer.
According to Juan Carlos Pina, manager of trade group of Argentine Vineyards, many wines were well-positioned to withstand any changes in spending habits by wine-drinkers in recession-gripped countries. “Instead of going to a restaurant and ordering $30 bottles, people are getting together at home and drinking $15 bottles of wines, and we’re very competitive in that range. This statement by Pina is a good testament to Argentina’s labor and land cost competitive advantage. In fact, during our time in business, we carried several Argentinian wines in the under $15 range that were outstanding values and were very popular with our customers.
Trend towards higher quality grapes –According to a recent report by Tim Atkin in the 2009 Wine Report, statistics show that the industry is moving towards the planting and production of more premium varietals. The country has long produced less-than-inspiring, mediocre table wines from the very basic Cereza and Criolla grapes. In 1990 premium varieties (chardonnay and cabernet sauvignon for instance) accounted for only 36% of all plantings, whereas the number is closer to 61% today. These replanting trends show that the Argentine wine industry is serious about becoming a world player in the wine business by creating wines that have a much more global appeal and are just better grapes, period.
Good local producers – Lest we not forget, there are a host of local producers who currently make terrific wine. Susana Balbo, Achaval Ferrer and of course Bodega Catena Zapata are just a few of the many producers who are already crafting great examples of what Argentina has to offer from it’s local talent. Susana Balbo’s Crios line of wines are tremendous values. The cabernet sauvignon and syrah-bonarda blend are both delicious under $15 wines that were always very popular in our shop.
Now that I’ve told you just a few of the reasons why we should be excited about Argentina, be sure to keep an eye on what looks to be a promising future for the country. Here’s a recap list of some of the wineries I talked about and the links to their or their importer’s websites for more information: