News - 28.06.11
Business Rounds – Buyers from LATAM
Eleven buyers from Colombia, Costa Rica, Guatemala, Peru, and Ecuador visited Argentina in a meeting organized by Wines of Argentina and the Federal Council of Investment (CFI). They were invited to travel to Argentina by the Latin American Market (LATAM) PR agency to hold Business Rounds from June 21st to June 23rd in Mendoza and on June 24th in San Juan. Wines of Argentina interviewed the visitors: María Teresa Nieto Urbieta (from WONG and Metro supermarkets of Cencosud)
Eleven buyers from Colombia, Costa Rica, Guatemala, Peru, and Ecuador visited Argentina in a meeting organized by Wines of Argentina and the Federal Council of Investment (CFI). They were invited to travel to Argentina by the Latin American Market (LATAM) PR agency to hold Business Rounds from June 21st to June 23rd in Mendoza and on June 24th in San Juan.
Among the 11 buyers present were 3 from Colombia, 2 from Costa Rica, 2 from Guatemala, 3 from Peru, and 1 from Ecuador. The visitors were: Javier Rodríguez Cuadros from Servicios Comercio and Representaciones C&RSA; Julio César Bravo from Dominion Group Int. and Condorfood Sac; María Teresa Nieto Urbieta from Cencosud Peru; Martín García from Eurotrade S.A.; Jaime Iglesias from Elite Intercontinental S.A.; José Vergara from Servindinsa; Pablo Álvarez Miranda from Sylstore Compañía S.A.; Marisol Narváez de Stegen from Solamerika S.A.; Paola Arteaga from Bodegas Añejas Ltd.; Juan Carlos Saad Saldarriaga from Importaciones El Trébol S.A.; and Jesús Hernando Chavarro Garzon from Distribuidora de Vinos Ltd. All of them were accompanied by Hugo Sabogal, LATAM PR for Wines of Argentina.
The goal of their visit was to contact Argentine wineries and create business opportunities for small and medium local companies so that they may commence exports to the LATAM market, and in the case of wineries that are currently exporting, to increase their volume of exports.
Wines of Argentina interviewed the visitors: María Teresa Nieto Urbieta (from WONG and Metro supermarkets of Cencosud)
What is your impression of the trip?
It’s been a very interesting trip that has provided me with several business opportunities. I came expecting to find wineries that could broaden my portfolio and offer products within every price bracket, including low-end wines for newcomers to the wine industry but also reserve wines of the same brand names or alternative ones. I’ve found several options, and now I have to decide which ones to take. This is my first time in Argentina. Mendoza is a very nice province, and they’ve treated and fed us very well. The wines are excellent.
What do Peruvians know about Argentine wine?
The consumption of Argentine wines has increased in Lima. Currently it is domestic wine that is consumed the most, since people are accustomed to drinking sweet wine, but those who know more about wines drink red wine; 55% of them drink Argentine wine, and they prefer Malbec. It’s a country that’s widely represented with many labels, offers, and different opportunities depending on the consumer. There are plenty of distributors who introduce Argentine brand names to me so that I may put them on the shelves. We carry out many marketing actions to get the consumer to keep learning more about Argentine wines since there are many other varieties besides Malbec from different wine regions, like Torrontés or Bonarda, that are rising in popularity but are still unknown in Lima.
How is wine distributed in each of your chains?
Our WOM supermarkets are targeted to high-end consumers (where we sell mainly reserve and varietal wines). Then we have Metro, which is for the mid- to low-end consumer. At Metro we market the entry-level wines that help us make a change in the tendency to drink only sweet wines. Here the consumer doesn’t have to pay a different price but basically just adjust to the flavor of a different kind of wine and therefore acquire a taste for it.
Does Argentina’s promotion of its wines effectively reach the Peruvian consumer?
Argentina and Spain are currently the only countries that promote their wines well in my country. It’s worth noting that the producing wineries have come together as an industry block to undertake all activities and not operate separately. From there on, it’s the consumer who must choose the brand, but Argentina does a very good job in telling about its country, its climate, its land, and the wines it produces.
Do you recommend any new means of further promoting Argentine wine?
Yes, I recommend more direct contact with the consumer. We have a very important database since we are the leading chain in Peru. It would be a good opportunity to reach the consumer more directly, for example, by participating in the fairs that we often organize. At these events, the wineries generally make themselves known through the distributors, but I think a winemaker and his explanations, for example, are always welcome. The consumer from Lima likes to be pampered with information and special attention. They are high-class people, and they expect preferential treatment with access to special services, and they expect to impress their friends with their acquired knowledge. It’s something that this sector appreciates very much.
The wine market in Peru is the second largest market of alcoholic drinks after beer, in spite of the fact that in 2009 the domestic demand for wine slowed down. That year, the market volume went down from 35.1 million liters to 32 million liters. It shouldn’t be forgotten that Peru is a wine-producing country and that domestic supply is competing more and more with the imported supply. But it’s also a fact that imported wines enjoy greater support among the frequent consumers. In any case, the local brands have a 45% market share, with a volume of 4.5 million liters. Imported wines have the other 55%, with 5.5 million liters.
In value, the business reached USD 100 million in 2007, growing at an average annual rate of 20%. It is estimated that the market will reach close to USD 150 million annually by 2010. Up until 2010, 43% of imported wines came from Argentina. Wines from Chile came next (28.8%), then Spain (10.9%), Italy (6.7%), France (4.2%), and the United States (1.6%). The companies Perufarma, GW Yichang, Premium Brands, Drokasa Licores, LC Groups, and Serpel concentrate 49.3% of imported wines. The rest is divided among smaller businesses. Red wine is imported the most (about 70% of total exports). Malbec and Cabernet Sauvignon are favored by most consumers.
In the last few years a notorious tendency in wine consumption has come about, from simple, low-priced wines to mid- and high-end, expensive wines. Part of the explanation can be found in the re-emergence of Peruvian gastronomy and the transformation of Lima into a gastronomic destination for international tourism.