Originally created 03/08/06

Argentine winemakers go global



MENDOZA, Argentina - The wineries tucked beneath the distant Andean mountains nearly have it all: warm days and cool nights for growing the lushest of grapes, state of the art technology and restless vintners bent on lifting Argentina's wine production to rival the best.

Australia, France, the United States and even neighboring Chile still far outpace the Argentines, but more than $1.5 billion in investments this decade to overhaul wineries and lift standards - coupled with a tightly focused marketing campaign - are producing a big international buzz about this country's up-and-coming grapes.

Argentina exported nearly $400 million in wines and grape juice concentrates to more than 70 countries in 2005, the second record in a row after surpassing $305 million in exports in 2004, the country's Institute of Wine reported.

Now nearly 900 wineries in leafy vineyards all around Mendoza, some 640 miles west of Buenos Aires, and more than 300 wineries elsewhere in this big South American country are exploring ways to combine new wine blends for an increasingly fickle and demanding audience of wine imbibers the world over.

They are also fine-tuning existing flagship reds like the prominent Malbec wine, a variety brought by European immigrants in the 1880's which thrived here and first put Argentina on the winemaking map years ago. And they are talking of ramping up even bigger export numbers in 2006, principally to the key U.S. and European markets, but also Africa and Asia.

In the early 90s, Argentina threw open a state-oriented economy to globalization, forcing traditional winemakers to seek new markets abroad.

Now dozens of entrepreneurial winemakers like Walter Bressia, 49, along with large traditional wineries and vintners from as far as France and Spain are all revitalizing Argentina's grapes. Many are overhauling old vineyards by planting new varieties, improving irrigation and harvesting techniques, even upgrading fermenting, aging and bottling methods.

"We've already shown the world that Argentina is capable of producing pleasing wines at a reasonable price," said Bressia. "Now Argentina must consolidate its position as a maker of wines of great prestige... we CAN make the highest-quality wines."

Quality winemakers are fast erasing last century's image of Argentine wineries as sleepy ventures with a reputation for unadventurous and often overripe table wines dished up to a large but captive domestic market. Old barrels and even ancient Ford trucks used for hauling wines to local markets are now museum pieces at bodegas here.

Whether it's Bressia's small winery or the sprawling plants of far bigger wineries like Familia Zuccardi not far away, the watchword is quality control.

Amid snipping sounds of metal shears removing grapes from the vines at the Zuccardi vineyards, the start of the annual Vendimia wine festival is gearing up: hundreds of workers are loading truckloads of grapes into winepresses. The smell of wafting champagne from fermenting vats smells like one big New Year's Eve hangover - as other scents of Syrah and chardonnay and other varieties waft overhead.

"In 1992, Argentina exported less than 1 percent of its harvest. In 2005, we are exporting in values above 16 percent. Today Argentina is seen as a country of the new world of winemaking... and its wines are very appetizing on the international markets," said Jose Alberto Zuccardi, director of the Familia Zuccardi bodega started by his father in the 1950s.

Many wineries were able to import advanced European equipment for the 11 years in which Argentina's peso was pegged by law at 1-to-1 with the dollar. But while imports were made cheaper, exports became prohibitive in that era - then came a deep economic crisis in December 2001 that forced the near collapse of South America's second-largest economy after Brazil.

But an overnight devaluation that put the peso at 3-to-1 with the dollar also made Argentine wines considerably cheaper to produce and export - boosting Argentina's wine-quality value ratio as more than 1 million tourists flocked to a cheap tourist destination and took the new buzz about Argentine wines back home.

Still some are still cautious as wine's gatekeepers demand more years of proof that Argentina can yield a track record of continuously heavy volumes with good quality and pricing.

Manuel Louzada, the winemaking director at the big Bodegas Chandon plant in Lujan de Cuyo, said the combination of European standards and bountiful local geography and know-how are ever closing the gap between potential and what can be realized.

He spends at least six weeks of the year on the road promoting Argentine wines in the U.S. and said crowds from Boston to Seattle and on down to Texas and Florida keep being surprised by Argentine wines.

"So far the Argentine wine story has been successful but we are still at the beginning. Our volumes of Argentine wines are growing all over the world," Louzada said. "Yet I think there is still a good way to go."

He noted that Chile has been conducting great export strategies since their go-go 80s and Australia's savvy marketing of wines was key to its export-driven successes of late. Yet Argentina, he said, is demonstrating abilities to capitalize ever more on its potential.

Still, he said, competition is enormous.

"If you go to a liquor store in the U.S. you have what, a thousand or 2,000 brands? If you go there, you see the Argentine shelf is still quite small." Nonetheless, wine drinkers are always seeking something new, he said, adding "If you would think 10 years ago that the consumer would be tired of California chardonnay someone would say: 'Are you kidding me!' "

Philippe Rolet, general manager at Alta Vista's winery here, swirled his own red and white brands one day as fields of grape ripened outside his 1800s era bodega amid the sweet smelling fields of lavender.

A French winemaker with years of experience in Chile, he also agreed the promise was dawning, particularly for the Malbec wines of Argentina which he said stood their ground against French versions - but also for whites and newer, lighter blends.

Alta Vista now sends exports to more than 30 countries, first to the English market and then Brazil.

"The emerging image of Argentina is one of very good wines, but not an image associated with a cheap price," he said. "That is the great advantage of Argentina today."