Grape expectations from Argentina

Updated: 2012-09-03 08:04

By Zhou Siyu in Mendoza, Argentina (China Daily)

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To the East

At the same time, brought over by immigrants from the Old World continent, the Malbec grape adapted successfully to Argentina's soil and sunny climate and was widely planted. Combining dark, ripe concentrated flavors with a rich and smooth texture, the Malbec grape soon became one of the fastest growing wine exports, winning world recognition for its second home.

Grape expectations from Argentina

Sheltered by the Andes Mountains and fed by its melt water, wineries in the Mendoza area - the winemaking area in the center of West Argentina that produces 70 percent of the beverage in the South American country - command a breathtaking view of leafy green vineyards growing against a background of snow-capped mountains. Photos Provided to China Daily

Naturally, winemakers in Argentina expect Malbec to charm the Chinese just as it did in other markets. "Compared with European wines, Argentine wines have softer tannins and cleaner aromas, making it taste less aggressive," said the renowned Mariano Di Paola, head winemaker at Rutini Wines in Mendoza.

Despite not being one of the largest producers in volume among Argentine wineries, Rutini (owned by La Rural Vinedos y Bodegas SA) is currently the largest seller to China, with its sales far ahead of its nearest follower in recent years.

But the company's success in China not only relies on its wine's simple, inviting tastes but also on a number of marketing factors. "Rutini Wines is a well recognized brand among the Chinese circle in Argentina and was mainly sold to East China's Fujian province - where its members came from. The wine thrived based on that connection," said Antonio Mompo from Wines of Argentina.

In addition, the fact that the name "Rutini" is easy to pronounce and remember in the Chinese language helped the winery to establish its presence, enabling it to sell a lot of premium wines to the Chinese market, said Sol Asensio, Rutini Wines export manager for Asia and Latin America.

To consolidate its position in China, Rutini Wines intends to continue promoting its image as a high-end wine producer in Argentina. "We are trying to become the Chateau Lafite for Argentine wines," Asensio said.

Argentine winemakers are by no means shy of competing in quality with other foreign wine suppliers, including France. Unlike other countries, the climate in Argentina is very stable so the vineyards do not have distinctively good years or bad years, said Gonzalo Carrasco, winemaker at Terrazas de los Andes winery. Moreover, warm or cold years give different fruit profiles to the wines, he added.

"As a result, our wine's quality has been improving each year and it is easy for our customers to form a certain expectation before opening a bottle of Argentine wine," he said. "They seldom feel disappointed."

Terrazas de los Andes winery, owned by the French luxury group LVMH Moet Hennessy Louis Vuitton SA, exports 80 percent of its wine every year, its top three markets being the United States, the United Kingdom and Brazil. China is now indisputably the most important market, Carrasco said. "And we are confident of our own styles (in wine)."

Another advantage for Argentine wine is its reasonable price, which will help Argentine winemakers confirm their market position, many Chinese wine critics believe. "The Chinese will soon realize this is a good wine at a good price," said Tommy Lam, wine program director at Shanghai Jiaotong University.

'China, a continent'

Not all wineries in Argentina can draw on the connection among Chinese people like Rutini does to promote their images. One big challenge for the South American country's winemakers is to find a reliable partner and establish distribution channels in China's complicated market.

"We are constantly looking for new opportunities to develop the Trapiche brand in China," said Ramiro Eduardo Barrios, area export manager at the Trapiche winery. Owned by Argentina's largest wine producer Penaflor SA, Trapiche is the country's largest exported premium brand.

Barrios also expressed concerns about the popularity of premium Argentine wine in China's gift market. "The numbers are good but you just don't know whether this will help promote the brand," he said.

Another concern for the winemakers about China's market, Barrios added, is its slack regulation. This has led to numerous fake and counterfeited premium wines, causing quite a stir in the international winemaking industry. French wines suffered the most. The situation came to a head this year as Chateau Lafite was pressed to launch a campaign to fight fake products in the country.

"All in all, China is definitely a core market for Trapiche and we envision big growth rates over the next few years for Trapiche and Argentina as well," Barrios said.

A reliable and capable Chinese partner becomes all the more important against this background. Catena Zapata, the winery owned by Nicolas Catena's family, is a case in point. "We wasted a few years, but we finally found a good partner," said Jorge Crotta, export manager at the winery.

Catena Zapata is now in an exclusive partnership with a Chinese company Beijing BETC Group, which owns two high-end restaurants featuring Argentine food, one located in Beijing and the other in Shanghai.

Since the partnership was formed in 2011, sales of Catena Zapata's wine have increased steadily, Crotta said. "We are working closely in China to avoid infringements of our wine," he added.

People with experience in the industry, however, do not encourage winemakers to concentrate on China's big cities such as Beijing, Shanghai and Guangzhou. "Competition in first-tier cities such as Beijing and Shanghai is very fierce. There is only limited space for a newcomer such as Argentine wine," said Antonio Mompo from Wines of Argentina.

With nine years of industry experience in China's market, Mompo was convinced that the real business potential for the wine industry lies in China's emerging second- and third-tier cities, where increasing disposable income enabled the residents to try some affordable foreign wine.

"Rutini's success is very telling - just one province in China is enough to push up its sales," Mompo said. "China is a continent in terms of business strategies. It is very complicated and all its submarkets are very important," he added.

Submarkets, in the meantime, may also have lower thresholds. It does not require a big brand promotion to enter these markets, which means there are opportunities for small wineries. Krontiras is a small winery in Mendoza and this year it managed to send a container of premium wine to an importer in Northwest China's Shaanxi province.

"This is our first container to China. We hope this could lead to something and we are very optimistic," said Thanassis Vafiadis, manager at the winery.

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