ProWein 2012 – Specialist Article Series: Wine Business in…the New World

Innovative, sustainable production and expansion into other export markets like China and Russia are the key features of wine production from the New World. Once again Chile, Argentina, California, South Africa and New Zealand are planning a joint seminar pavilion at ProWein – the motto for 2012 being “Flavours – New World at ProWein”. The pavilion will include different tasting sessions, country-specific lectures and “Wine for Food” seminars. Despite sharing some common ground the individual countries are very different in terms of exports and the current focus of their wine growing.



Argentina: Booming Exports
As one of the world’s largest wine-producing countries (with 218,000 ha under vine) Argentina continued its export offensive with two-digit growth rates in 2011. Alongside the export hit Malbec autochthonous varieties like Torrontés and Bonarda are gaining in importance. After the strong US and Canadian markets Asia is now moving centrestage. In 2011 China will almost double its imports from Argentina. Exports to Europe are seeing good growth despite being a little less dynamic. However, high inflation with increasing production costs makes it hard for the Argentinians gnawing at their competiveness.

The 2011 harvest produced good quality wines although at some sites in the Mendoza region late frosts meant harvest losses and lower production levels than in the previous year. With a slight delay over other countries Argentina has now begun in-depth involvement in sustainable production. A working group set up especially for this will already be presenting relevant results at ProWein 2012. Wines of Argentina expects up to 60 exhibitors at its joint stand (previous year: 42).

Australia: Shiraz Confirmed as Most Important Variety
Last year Shiraz further developed its importance over Chardonnay and Cabernet Sauvignon as the most important variety amongst Australia’s wine producers. After reducing the area under vine producers harvested some 11-12 m hl – a figure lower than the one posted 5 years ago. The 2011 vintage was not an easy one because unusual precipitation at harvest time made work harder. With exports – which ultimately suffered falling prices due to the rising proportion of barrel wine – England remained by far the most important customer ahead of the USA, Canada, China and Germany. ProWein 2012 will once again be host to an Australian joint stand alongside other producers presenting wines at their own stands. Here Wine Australia gives visitors the chance to see all the wineries featured at the fair on a guided wine tour – also including those not on the joint stand.

Brazil: Export Progress
The wine business in Brazil is undergoing very rapid modernisation and internationalisation. “In 7 years Brazil revolutionised its wine production like Europe did over the past 70 years,” says Italian wine journalist and sommelier Roberto Rabachino. The area under vine for the Vitis Vinifera variety is seeing strong growth at the expense of traditional hybrids and already stands at 10,000 hectares. According to Andreia Gentilini, Manager of Wines of Brazil, the country may be new to the world market but is making good progress both in terms of exports and international wine prizes. Already like last year, some ten wineries will be featured at the joint Brazilian stand. Participation in the “ProWein goes City” initiative is also to be continued.

Chile: New DO Definitions
Chile suffers from a strong currency making exports expensive. However, exports rose again in 2011, albeit more in terms of value rather than volume – now reaching over 7.5 m hl.  The USA, Great Britain and Canada remain the most important export markets while China is making significant advances here edging up to fourth place. On an area under vine of 120,000 ha the 2011 harvest produced good to excellent quality reds and whites after a growth period marked by cooler weather.
Managing Director of Wines of Chile Juan Somavía currently lists three key projects: “The most important of these is Plan 2020 which aims for us to become the New World’s largest producer of sustainably produced wines increasing our exports to a total of US$ 3 b. The second key focus is the new wine law and a tighter definition of our DO regions according to climate zone. Finally, development of the new sustainability seal constitutes important progress.” This year the Chileans wish to place wines from old, non-irrigated sites with varieties like Carignan at the focus of the ProWein 2012 tastings at their joint stand featuring 40-45 wineries.

California: Late Harvest in 2011
Californian wine-growers see continued work on their sustainability scheme as one of the most important aspects of their work internally. By 2013 this scheme plans to cover 80% of the approx. 195,000 ha of the area under vine. The Californians are seeing continued success in exports. After two-digit revenue growth in 2010 the first months of 2011 brought some 8% growth in terms of quantity and 32% in terms of value. China and Hong Kong, in particular, bought considerably more Californian wine. Europe, Canada and Hong Kong are the most important export markets.

California will once again be featured at ProWein 2012 with 35 exhibitors representing some 100 wineries. In addition to the “Down2Earth” joint seminar series (co-launched by South Africa, New Zealand, Chile, Argentina and California at ProWein 2010) there will also  be tastings held at the joint stand featuring wines from the Napa Valley, Sonoma County and the Zinfandel grape variety. Furthermore, two Californian chefs will be cooking at the stand. Visitors here can also expect the first 2011 wines which enjoyed a long ripening period due to this year’s very late harvest.


New Zealand: 100% Sustainable
New Zealand remains true to its philosophy of bringing higher quality wines onto the world market instead of focusing on increasing quantity. This appears to be a successful strategy as the country’s global exports are seeing strong growth in 2011: +11% to England,  + 81% to Germany, +22% to the Netherlands. Sweden, Germany and the Netherlands are to form the focus of export activities in 2012. The joint stand at ProWein will see 25 producers here, 7 more than in the previous year while another 12 will be presented on other stands. In addition to participation in the “Down2Earth” initiative the joint stand also offers its own tasting sessions under the heading “The Riesling Challenge”.

With 33,600 hectares Sauvignon Blanc still remains the dominant Kiwi variety. However, another recent trend is the Austrian variety Grüner Veltliner. Furthermore, Chardonnay and Syrah are also gaining in importance. From 2012 New Zealand’s area under vine is to achieve 100% sustainable cultivation.

South Africa: New Sustainability Seal
The wine nation at the Cape adopted its new sustainability seal in 2010 – which amongst other things attaches importance to conservation of the unique flora and fauna of the Cape Floral Kingdom. 82% of the slightly more than 100,000 ha under vine is already cultivated according to the requirements of the new seal. Su Birch, Managing Director of “Wines of South Africa” is certain: “The seal will help us with marketing. Many buyers look for sustainable production.” However, South African exports to their largest customer Great Britain are under pressure due to the high Rand exchange rate. Exports in 2011 fell slightly although South Africa is successfully opening up new markets like China and Africa.

Some 60 producers will be participating at the joint stand at ProWein 2012. In addition to seminars in the joint “Down2Earth” series there will also be special tasting sessions at the South Africa stand.


Uruguay: Export Motor Tannat
Since the late 90s Uruguay has been undergoing a technical revolution making it possible for exports from this wine nation with its 9,000 ha to compete with other New World countries. This makes Uruguay attractive for international investors – as demonstrated by the Bodega Bouza and Bodega Garzón projects in the coastal region near Punta del Este. Tannat remains the trademark variety here which in 2011, according to Gustavo Margariños, Coordinator of Wines of Uruguay, may have produced “the best harvest ever in quality terms”. Exports are seeing progress in leaps and bounds. After a 25% increase in 2010, exports in 2011 once again rose by 20%. Uruguay’s key export nations are Brazil and the USA. ProWein 2012 will host 16 bodegas (2011: 8) who will be presenting their Tannat wines.


The author Jürgen Mathäß has been working as a journalist for over 20 years and writes exclusively about wine. After completing his studies (in economics) and gathering experience in the business field he began writing on business topics. After working as editor-in-chief at the wine business journal "Weinwirtschaft" (1986-1992) he now writes exclusively about wine as a freelance journalist and wine consultant.


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