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For this week’s profile on one of VINEX’s leading members we talk to
Brunela Suriano, winemaker at Fecovita
Over the last 20 years Fecovita has established itself as arguably the powerhouse of the Argentine wine industry. It may not be a name that is as well known as other Argentine producers are around the world, but when it comes to producing wine and influencing the domestic as well as international market for Argentine wines then Fecovita is the place to start.
It can lay claim to being Argentina’s biggest domestic player, with around 30% of all sales, and according to some reports is the 10th largest producer of wine in the world. It sells, according to Paul Schaafsma, head of its new UK distributor partner, Benchmark Drinks, around 270 million litres of wine on average every year. As well as accounting for nearly a third of the Argentine market for bottled wine, it has 45% of the country’s bag-in-box sales.
It works through a network of 54 wineries, 29 winemaking cooperatives across the key winemaking areas of Mendoza, including 5,000 grape growers, covering 25,000 hectares of vineyards.
Fecovita now exports its wines to up to 100 countries around the world and employs over 1,000 people globally to help do so.
Having such a stronghold of grape production in Argentina means it is particularly well placed to serve bulk wine buyers in all the key markets. Schaafsma, for example, believes it is in the ideal position to capitalise on rising bulk wine prices in key markets such as Australia and South Africa, and help buyers list wines in the key commercial price points, which in the UK still sits between £5 and £6 a bottle.
Particularly as South America as a whole has spent the last 10 to 15 years building a world reputation for good quality, but great value wines. Wines that are full of flavour, bursting with fruit, but crucially in the last two to three years, made in a far more refreshing, more-ish style with lower alcohol levels.
With domestic wine sales falling off a cliff, with average consumption down to 22 litres a head from 32 litres in the last five years, it is clear why Fecovita is keen to build more exports to key markets around the world.
As well as bulk wine, Fecovita has a wide range of leading branded wines. These include its two main commercial brands, Toro, which is the number one wine brand in Argentina, and Estancia Mendoza from the Uco Valley in Mendoza, the country’s fifth largest brand.
Toro brands are said to account for one in every five wines drunk in Argentina and Estancia has 10% domestic share. Both brands are now being pushed internationally, like in the UK with Benchmark Drinks.
Schaafsma is so confident that Fecovita’s wines will work well in the UK that he believes Benchmark can help it build a 20 million litre business in the UK and Ireland across branded, own label and private label wines within three years.
Fecovita is also well placed to benefit from an attractive currency position for Argentina globally. With a transfer value of 59.8 to $1 bringing more buyers to Argentina.
To help assess Argentina’s position going into 2020 we talk to one of VINEX’s key members in the country, Fecovita’s winemaker Brunela Suriano.
How was the Argentine 2019 harvest overall?
The overall grape harvest of Argentina for 2019 came in at 25,198,862 quintals. This was actually a 2% decrease on the year before, but the good news for the country is that it was 3% up on average for grape harvests that we have seen in the last 10 years.
Any regions do particularly well in terms of volume?
The East Valley performed well, and San Martin was the most productive region that we saw.
How about grape varieties - what has done well during 2019?
This year has been good for a number of varieties which is good for the market and for Fecovita. In particular I would focus on the performance of Malbec, Syrah, Bonarda, Tempranillo, Cabernet Sauvignon and Merlot. We have also seen good quality as well for Aspirant Bouchet.
How about red wines in particular?
The reds are still dominated by Malbec, Syrah and Bonarda.
And the whites?
The whites are becoming a little more varied. Torrontes and Chardonnay continue to do well, but we have also seen more interest and growth for our Chenin Blanc and Semillon as well. It will be interesting to see how this develops in the years coming up.
How has the market been in 2019 in general in terms of availability and pricing for bulk and bottled wine?
The 2019 vintage was very good in terms of both quality and volume. Which means the availability has been great. Which, in turn, means we have been able to call for very competitive prices.
What are your predictions for the year ahead in terms of where buyers will get the most value/availability in Argentina going into 2020?
The signs at the moment is that the vintage in 2020 is going to be smaller in quantity, but the quality we have seen in 2019 will be repeated also in 2020 which is good news.
Which countries are showing the most demand for Argentine bulk and bottled wine?
We have seen the most demand coming through from the US, Canada, China and South Africa.
For more information, contact your VINEX Regional Manager here