U.S. market ripe for Argentine wine

BY KEVIN G. HALL
Herald World Staff

Posted on Wed, Feb. 20, 2002

BARREL-AGED: Winemaker Jose Antonio Bravo tests a
cabernet at the cellar of Kendall-Jackson in Agrelo, Argentina.

AGRELO, Argentina - Against the towering backdrop of the rugged Andean Mountains, winemaker Jose Antonio Bravo takes a sniff and a sip of his Uco Valley wine.

He is pleased.

Actually, Bravo is pleased both by the wine, a fruity malbec varietal, and, in a perverse way, by Argentina's current economic catastrophe.

While Argentina's wines are not well-known in the United States, the country's recent peso devaluation makes them a newly attractive bargain for American consumers -- especially the fancier vintages.

Jaded taste buds, get ready. "The grape of the Uco Valley is extremely fruity with a superconcentrated aroma," said Bravo, who left Chile's successful wine industry to join the promising one on the other side of the Andes.

In the Olympics of wine, Argentina, the world's fifth-largest producer, is breathing down the neck of the United States in fourth place. The top wine-producing countries are France, Italy and Spain.

Kendall-Jackson Wine Estates, based in Santa Rosa, Calif., couldn't be happier.

It opened its state-of-the-art Tapiz winery, where Bravo works, in 2000, and owns three vineyards in the Uco Valley. They total more than 2,100 acres, all framed by the rugged Andes.

Kendall-Jackson is marketing all its Argentine wines under the label Tapiz, which means tapestry in Spanish.

The California winemaker and other foreign wineries have spent more than $135 million since 1994 to buy Argentine vineyards or plant new vines.

Another $350 million went for new equipment and technologies.

From 1991 until early this year, the export market was a waiting game. The Argentine peso was on par with the dollar, so winemakers could earn no more from U.S. exports than from domestic sales.

Since January's peso devaluation, however, the peso has lost almost half its value against the dollar.

It will take time for other Argentine exports to exploit devaluation, but wines are ready to go. And with high-quality reserve vintages priced in the $7-$20 range, Argentine wines are likely to make a splash.

"The wine sector in Argentina is the most ready to attack foreign trade," said Mario Giordano, director of the Argentine National Wine Promotion Commission in Buenos Aires. Wine exports grew from $11 million a decade ago to almost $125 million in 2000, but Giordano thinks they're just getting started.

Argentine wine is distinctive, he and others noted, reflecting the unusual growing environment.

In the Uco Valley outside Mendoza, the wine capital of Argentina, the environment is high, dry desert. Many vineyards are young, their soils virgin since washing down from the Andean range.

"Our soils are new soils, they are the products of destruction from the wind, rain and the mountains," said Carlos Castania, an agricultural engineer with the National Agriculture Technology Institute (INTE) in Mendoza. "Everything's a mix of what came down from the cordillera [range]." Like much of California, "This is a good region for red wines and chardonnay."

High altitude also is a factor. In the Mendoza region, vineyards range from 2,600 feet in altitude to as high as 6,500 feet. The higher altitude means more ultraviolet rays, to which grapes respond with organic components that produce exceptional fruitiness. Castania describes their taste and smell as plumlike.

Tapiz and other winemakers bottle chardonnay and lots of cabernet sauvignon, merlot and syrah. Argentine vintners expect Americans to fall for the malbec varietal, a rich and lively dark red wine. The malbec grape was brought to Argentina from France in the 19th Century by French agronomist Michel Aime Pouget.