MARKETING THE WINES OF ARGENTINA Collette Pomeroy

Journalism 500 – Summer 2010

WINES OF ARGENTINA – A HISTORY

 The first vineyard cuttings were brought

to Argentina by Spanish colonists in the

16th century  Vineyards were originally cultivated by monks

so as to ensure the provision of wine for Catholic mass

 The terroir of western Argentina proved perfect for viticulture, and eventually the monastic vineyards commercialized and began producing copious amounts of wine

 Historically, Argentine vintners were more focused on quantity than quality

Sources: “Argentine Wine,” www.wikipedia.org, May 11, 2010; “el Vino Argentino,” www.winesofargentina.com, May 12, 2010

WINES OF ARGENTINA – A HISTORY   During the beginning of the 20th century, Argentina

was the eighth richest country in the world and the wine industry grew due to domestic consumption

  The Argentine wine industry continued to be dependent on economic conditions in the country

  During the military dictatorship of the 1960s and 1970s, the Argentine wine industry was sustained by domestic consumption of cheap, mass-produced table wine

  During the 1980s and 1990s, as the economy stabilized and with the influence of French and American vintners, the Argentine wine industry began to focus itself on exports

Sources: “Argentine Wine,” www.wikipedia.org, May 11, 2010; “el Vino Argentino,” www.winesofargentina.com, May 12, 2010

WINES OF ARGENTINA – RECENT HISTORY  As Argentine viticulture has developed over

the past 20 years, the nation has grown to become the 5th largest exporter of wine in the world

 Argentina was the fastest growing export country from 2002-2008, more than doubling the annual growth rate of its nearest competitor

Source: International Organization of Wine and Vine, 2008

0 5 10 15 20 25

Italy

Portugal

Australia

Germany

Chile

U.S.

Spain

South Africa

Argentina

Wine Exports – Growth By Country (2002-2008)

Compound annual growth rate (in percentage, 2002-2008)

WINES OF ARGENTINA – IT TAKES TWO TO TANGO

 There are two “signature” varietals associated with Argentina   The most well known is Malbec which produces an

intensely rich plum-colored wine

  The lesser known white varietal native to Argentina is the Torrontés grape, which produces an acidic light yellow wine with a fruity bouquet

Source: “el Vino Argentino,” www.winesofargentina.com, May 12, 2010

WINES OF ARGENTINA – IT TAKES TWO TO TANGO

  Most of the exported wine from Argentina is the Malbec varietal   Malbec was considered a

“reject” grape in old world wine-making countries– it was used to add color to other wines

  Malbec adapted beautifully to the terroir in the Andes foothills of western Argentina and now accounts for 38.3% of the country’s exports of bottled wine

Source: “Wine Industry in Argentina,” ProsperAr: Invest in Argentina, www.prosperar.com, May 11, 2010

WINES OF ARGENTINA – IT TAKES TWO TO TANGO  An up-and-coming

white varietal is the native Torrontés grape   Torrontés is grown

mostly in the Salta region in the Northern part of Argentina

  Torrontés is beginning to gain a following among wine connoisseurs outside Argentina and has been called “Argentina’s Other Great Grape”

Sources: “Wine Industry in Argentina,” ProsperAr: Invest in Argentina, www.prosperar.com, May 11, 2010; “Argentina’s Other Great Grape,” www.corkd.com, May 18, 2010.

WINES OF ARGENTINA – MARKETING A NATION   The Wines of Argentina organization is a government-sponsored

entity that represents more than 190 wineries that account for 95% of Argentina’s wine exports

  Their mission is to promote and support what they call “Vino Argentino” – Argentine wine as a collective brand rather than focusing on individual vintners

Sources: “Nosotros,” www.winesofargentina.com, May 12, 2010; “Argentina’s Grapes of Success,” www.newsvote.bbc.com.uk, May 11, 2010; meeting with Lis Clement of Wines of Argentina, Mendoza, June 23, 2010.

WINES OF ARGENTINA – CHALLENGES FACING THE INDUSTRY

  Improving the global positioning of Argentine wines

  Increasing Argentina’s world market share

 Anticipating world consumption trends

Source: “Wine Industry in Argentina,” ProsperAr: Invest in Argentina, www.prosperar.com, May 11, 2010

WINES OF ARGENTINA – CHALLENGES FACING THE INDUSTRY   Improving the global positioning of Argentine

wines   Wines of Argentina has offices in Mendoza, New

York, the UK, Sao Paolo, and Colombia with staff dedicated to promoting the Vino Argentino brand across the world

  Staff members place media, host tastings and wine tours, participate in wine fairs, and invite wine journalists to Argentina to help grow knowledge of and interest in the Argentine wine industry

Source: “Nosotros,” www.winesofargentina.com, May 12, 2010

WINES OF ARGENTINA – CHALLENGES FACING THE INDUSTRY

  Improving the global positioning of Argentine wines   Wines of Argentina has

established a 10-year marketing plan focused on a “quality for value” message abroad and assisting smaller vintners and wineries domestically

Source: “Nosotros,” www.winesofargentina.com, May 12, 2010; “Argentina’s Grapes of Success,” www.newsvote.bbc.com.uk, May 11, 2010; meeting with Lis Clement of Wines of Argentina, Mendoza, June 23, 2010.

WINES OF ARGENTINA – CHALLENGES FACING THE INDUSTRY

  Increasing Argentina’s world market share   Wines of Argentina has set a goal of 10% world

market share by 2020

Sources: International Organization of Wine and Vine, 2008; “Wine Industry in Argentina,” ProsperAr: Invest in Argentina, www.prosperar.com, May 11, 2010

0 5 10 15 20 25

Other

Portugal

Chile

South Africa

Germany

Australia

Argentina

U.S.

Spain

France

Italy

Ranking of Wine Producing Countries

Market Share in percentage (2008)

WINES OF ARGENTINA – CHALLENGES FACING THE INDUSTRY

  Increasing Argentina’s world market share   The government has pushed for investors from

both inside and outside Argentina to continue to invest in development of the viniculture in the region   Areas for continued development and growth include

vineyards, wineries, real estate, tourism, and secondary supplies such as glass bottles and cardboard cases

Source: “Nosotros,” www.winesofargentina.com, May 12, 2010; “Wine Industry in Argentina,” ProsperAr: Invest in Argentina, www.prosperar.com, May 11, 2010

WINES OF ARGENTINA – CHALLENGES FACING THE INDUSTRY  Anticipating world consumption trends

  Efforts to meet this challenge include increasing Argentine wine production to meet world demands, and capturing new consumers and markets

  Lis spoke of this challenge in reference to the United States, which is considered a “young” wine market   She spoke to the ad featuring a young urban couple

moving into their home with a box of pizza and a bottle of Malbec, noting that those consumers are the target audience for Wines of Argentina in the U.S.

Source: “Nosotros,” www.winesofargentina.com, May 12, 2010

WINES OF ARGENTINA – POISED FOR A BRIGHT FUTURE

Argentina’s perfect terroir, continued investment in its viticulture, established long-term marketing plan, and sterling reputation in the wine industry ensure that this industry will see success and growth for a long

time to come