Does Grape Trump Region?

Does Grape trump region

A view on Malbec and Mendoza

Grape and region have always vied for pride of place in the hierarchy of consumer choice.  With South Africa and Chile stealing their fair share of New Zealand's Sauvignon Blanc sales, we take a look at Malbec and question how Argentina can maintain its position in the market.  Resting on its laurels is not an option.

There are many New World wine regions that have looked towards Marlborough in New Zealand with envious eyes.  As a relatively new arrival to the global wine scene, it quickly established itself as the home of Sauvignon Blanc and sold its wines for prices far and above its rivals from other countries.  Plantings grew in line with demand and all was well – until recently.  One challenge with wine is that you are only a small harvest or two away from a big problem.

The 2011 and 2012 vintages in Marlborough were limited enough to drive up prices as demand outstripped supply.  The result has been a nosedive in New Zealand’s sales in the UK and the realisation that when it came to consumer recognition ‘brand Sauvignon’ trumped ‘brand Marlborough’ every time.

The big beneficiaries have been Sauvignon produced in places like Chile and South Africa who can undercut the Kiwis whilst making wines that increasingly have those trademark Marlborough traits of gooseberry fruit and elderflower.

Consumer Choice

None of this should be a major surprise.  There is plenty of data regarding consumer decision trees showing that grape is a major factor in choice, often third after promotion and retail price.  Country or region is often stuck at the bottom of the list of factors, somewhere around ABV.  Put simply, grape trumps geography at the point of sale.

All of which poses an interesting dilemma for Argentina, Mendoza and Malbec.  Most of the Malbec sold in the UK today is Argentinean and clearly has the grape on the label.  Both producers and Wines of Argentina have worked very hard in recent years to establish the grape in the mind of the consumer and ensure it is synonymous with Mendoza.  They have done a terrific job too.  Just ask anyone from across the border in Chile who has a few tanks of Carmenere to sell.

Global Malbec

However, there could be a very good chance that Argentinean Malbec could become a victim of its own success. 

Chile has cottoned on to the grape's cachet and vignerons in Cahors are becoming increasingly interested in varietal labelling.  Add in producers in South Africa, Australia, California, the Languedoc and it is clear that Argentina won't have the Malbec market to itself forever.

The challenge for Argentina is how to ensure that consumers continue to associate it with the very best Malbec rather than migrate to the cheaper version from elsewhere. 

Resting on its laurels is not an option.

Consumer Awareness

Recently, Andrew Maidment's commissioning of April's sold-out 'Cambalache - One Night in Argentina' event did wonders for the perception of the country.  At a time when the tabloids were full of Falklands news, hundreds of drinkers paid £35 to enjoy street food, tango, graffiti artists, Argentine slang lessons and 150 wines in a trendy Dalston, east London warehouse.  It went so well that the immersive experience headed to Jamie Oliver's Feastival at the end of August.

The recent profusion of top class steak restaurants has been important too. Gaucho has always flown the Malbec flag of course, but both Hawksmoor and Goodman now have premium own-label Malbecs to pair with those 1kg rib eyes.  Argentinean Malbec appears to offer the on-trade a way to sell large volumes of premium wine quite easily.

Brand Argentina

Esquinas de Argento wineSo far, so good, but this is just the start.  Keeping ahead of competitively priced, high quality Malbecs from around the world will be an on-going battle and the key to success lies in giving consumers lots of reasons to pay a premium for a bottle from Mendoza.  Everyone in the supply chain has a role to play but the onus has to lie with the producers, either working individually or collectively.  

In the casual dining sector, Henry Boyles, purchasing manager for Mitchells and Butlers believes that although the consumer does hold a direct correlation between Argentina and Malbec, Argentina needs to display regional diversity more clearly to strengthen its current position.

Argento Wine Company has always fostered this kind of communication with their blog, The Real Argentina, as well as other consumer campaigns that highlight Argentina’s culture as well as advertising Malbec. 

Recently Argento has developed a new label for the on-trade which is a premium proposition. Esquinas de Argento, alludes to the Argentinean culture of dancing tango and socialising on the street corners of Buenos Aires. 

The label is a beautiful design of the map of the city and resonates with those consumers who aspire to all things Argentinean.  Head of Marketing, Polly Long, says, ‘The importance of this (the attractive Argentinean culture) shouldn’t be underestimated – we should reach out and engage with a broader audience of consumers through Argentina’s rich and exciting culture/heritage and the country’s growing tourism opportunity.’

So for Argentina and Mendoza in particular, a focus on quality, region and culture is absolutely imperative in order to add another dimension to Argentinean Malbec that other regions cannot match.

18th November 2013

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