Malbec’s mixed blessings

05 February, 2010

The successes of Australia, South Africa, Chile and New Zealand wine are all examples of why Argentina needs a generic office here,” says Nick Leonard, sales manager for Chalié Richards.

Without the help of a combined effort with a UK base, Leonard, like countless others in the trade, feared sales of Argentinian wine would take a battering.

That is why last week’s news that Wines of Argentina is going full steam ahead with plans to reinstate its London office has been widely welcomed.

“James Forbes did an excellent job of raising the profile of Argentina within the trade and beginning the work of recruiting new consumers to the category,” says Buckingham Schenk’s commercial director Jon Pepper, about the generic’s former UK director who stepped down last September.

“The challenge now is to continue his work, with particular focus on recruiting new fans and building a reputation for the diverse range of wines available.”?With Andrew Maidment, UK & Asia manager of Wines of Argentina, now in the driving seat and committed to being permanently based in the UK from March, what will its top priorities be??Puttting Malbec on the map?“Wines of Argentina has done a great job of raising general awareness throughout the UK trade – you only have to see how popular the annual tasting has been for the past couple of years to see that,” Maidment says. “But despite this, our sales haven’t seen the jumps we would have liked, and wines are still hard to find in the marketplace.

“The next few years will be focused on activities on the ground aimed at increasing listings, getting closer to the consumer and building our image,” he promises.

But will this image be based around Argentina’s flagship variety Malbec, or does such a narrow focus limit the potential for future sales growth??“Often people say we need to move beyond Malbec – it’s certainly true that Argentina produces many fantastic wines from a host of different varieties,” Maidment acknowledges. “However, we are a long way from having a market flooded with Malbec in the UK, so let’s not look to move beyond Malbec before it has really made its mark.” Chalié Richards’ decision to replace its Las Moras Reserve Chardonnay and Reserve Cabernet Sauvignon/Shiraz with Pacha Mama Malbec and Torrontés last year certainly suggests it’s the country’s typical varieties that are drawing consumers into Argentinian wine.

Although the rrp of £6.99 remained the same, the move resulted in “a significant uplift in volumes through the same number of stores”, according to Leonard. “The fact the replacement wines were the Argentinian flagships of Torrontés and Malbec shows the consumer specifically chose a wine they knew to be Argentinian and not from any other country offering Chardonnay or Cabernet/Shiraz,” he says.

Malbec is the variety that’s performing best for Stratford’s Wine Agencies, according to PR manager Erin Robson. “Our Pascual Toso Malbec has done extremely well this year – we have seen fantastic growth. Winning the International Wine Challenge Great Value Red Wine award definitely helped put this wine on the map. We also saw very positive growth of the more expensive Malbecs, especially in the months leading up to Christmas,” she says.

But for Buckingham Schenk’s Pepper, it’s both a blessing and a curse for Argentinian wine to be synonymous with Malbec.

“Argentina’s greatest success, and most limiting factor, has been its international reputation for Malbec. Although this has given it a USP, the focus on one variety will, by definition, limit the amount of exposure the country gets in major retailers,” he says.

In a bid to educate consumers about the broad range of varieties and styles Argentina can offer, Buckingham Schenk is expanding the size of its vineyards for new brand Viñalba with plantings of Cabernet Sauvignon, Cabernet Franc, Chardonnay, Pinot Noir, Syrah,

Torrontés and Sauvignon Blanc.

“It is still early days, but initial results show many of the grapes will ripen beautifully, giving the option of both interesting new wines and some fascinating blending partners for Malbec,” Pepper says.

For Nick Day, La Riojana’s UK & Europe sales director, it is imperative Argentina communicates its point of difference to consumers by showcasing its “different winemaking regions and variety of styles, as well as its innovative blends and the fact it’s one of the world’s largest producers of Fairtrade, organic and biodynamic wines”.

Room to grow?Argentina occupies just 1.5% of the entire off-trade, according to Maidment. Such small market share is proof, says Trivento brand manager Maria Ines Pina, that “Argentina needs more space on the high street” – and fast.

“It must convince buyers and retailers that it can deliver on price and wine quality. We have started that work as an industry but there is still a great deal to do,” she says.

But Maidment is quick to maintain that such top-line numbers can be misleading. “What this highlights is Argentina’s continued under-­representation in the UK’s supermarkets – which obviously account for the bulk of total wine sales and therefore dominate these figures.”?Look outside of the supermarkets and you start to see a very different picture emerging, Maidment says. “Our share of sales in Majestic, for example, is currently 3.7%. This goes to show there are certainly areas of the off-trade where Argentina has found its feet and in these areas the category is performing extremely well.

“Listings in the larger specialist wine merchants are consistently increasing and Argentina can deliver real interest at the price points these retailers and independent merchants sell at.”?Carolyn d’Aguilar, UK brand manager for Septima, agrees: “We have always seen great support for Septima within the independent retail sector and firmly believe this is a key driver for growth of the Argentinian category.”?Maidment believes it’s vital Wines of Argentina works in tandem with retailers to ensure Argentinian wine reaches a wider audience and carves a niche for itself in the market.

“Argentina is under-represented on the high street and until that situation improves we are never going to see significant jumps in market share.

“There are still barriers preventing the wines getting all-important ‘face time’ with consumers and, for this reason, 2010 will see the start of a campaign to get closer to the various retail environments, understand their needs and assess where Argentina fits in,” he says.

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