Beyond Malbec: Looking for Signs of an Argentina Wine Export Revival

catenaAbout this time last year I wrote a pair of columns about prospects for a revival of growth in Argentina wine exports to the United States. Argentina was once the fastest growing imported red wine source (New Zealand has that distinction for white wines), but sales plateaued for a variety of reasons that I analyzed.

Feelin’ Groovy?

Can Argentina get its groove back? My 2016 columns were optimistic, focusing on changing politics and economics in Argentina, but, I warned, the U.S. market has changed, too, and Argentina will need to bring different products and strategies to the game to be successful.

Argentina cannot hope to simply ride the inexpensive Malbec “signature varietal” horse to renewed export success. The U.S. market is now filled with easy-drinking  “Red Blend” wines that compete in the space that Malbec once dominated.

Argentina needs to think of itself “like a normal country,” I said, which in this case means emphasizing  wines at higher price points where the market growth is today, focusing on terroir and other elements of product differentiation and moving beyond Malbec without in any way abandoning that grape variety.

Early Evidence?

The December 2016 issue of Market Watch magazine includes an article by Angel Antin titled “Argentina Comes of Age” that provides a cautiously optimistic update analysis. No significant change in direction is shown in the data for 2010 – 2015, but lots of anecdotal evidence of new ideas and new directions is presented.

Data for Argentina’s wine exports in the first nine months of 2016 provided by Wine by Numbers shows stable total exports over this period, with lower U.S. and Canada shipments offset by rising sales to the U.K. market.

The recent success in the U.K. market is obviously welcome for Argentina wine producers, but there is great uncertainly about the future due to Brexit. It would be better to see a broader pattern of export growth. On the whole, it is still too soon to draw any firm conclusions  about the impact of the Macri policies on wine exports. Stay tuned.

Redefining Argentina Wine

A personal note: my optimism was encouraged recently when I surveyed the “South America” shelf of the neighborhood Metropolitan Market and found just the sort of wine that I called for in my analysis last year. It was a Catena Appellation San Carlos Cabernet Franc 2014 selling in the $20-$25 price range.

This wine is an example of how Argentina can add layers to its identity to expand market appeal. It is Cabernet France not Malbec and the packaging stresses terroir. The wine is from a single high-mountain vineyard (El Cepillo is at 3900 feet) in the San Carlos region. The regional element is highlighted by the label’s antique map (although the image is of Argentina generally and not the specific San Juan area).

The idea is clearly to differentiate this wine in ways that appeal to wine drinkers who are seeking both authenticity and a different experience. The Cab Franc is part of an appellation series of Catena wines that also features two region-specific Malbecs, a Cabernet Sauvignon and a Chardonnay.

Catena is certainly not alone in thinking about their wines and marketing them in this way. (We recently enjoyed a less expensive but well made and nicely packaged Santa Julia Reserva “Mountain Blend” Malbec-Cab Franc from the Uco Valley.) That’s a good thing because no single wine or producer is going to redefine and expand the market. The potential is certainly there. Hopefully we will see positive results in the data before too long.

4 responses

  1. Dear Mike, I enjoy very much your blog. One little correction though, El Cepillo is part of San Carlos county, and it belongs to Mendoza province, not San Juan. In fact, San Carlos is one of the three that make up Uco Valley (together with Tunuyan and Tupungato). Best, Sebastian.

  2. Great article, Mike! Spot on. Cab Franc substitute for Malbec is a nice step up. Sweet spot is the $20-30 range. For buyers, you could look for $30+wines on sale.

  3. Visited Argentina and Chile for a 3 week wine excursion a short while ago. Several of our the wineries we visited seemed ready and able to promote their Bonarda varietal as the next “new signature grape” if and when the Malbec craze ebbs. Very palatable and much enjoyed with the same fare as the Malbec.

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