Profile de membre VINEX en vedette

VINEX interviews Richard Bonvin to get the inside story on Argentina’s Mendoza Vineyards and how it is now part of Origin Wine’s focus on sourcing and bringing market focused New World wines to the market.

How has Mendoza Vineyards grown over the years and increased volume?

We started with a small office in 2003. In 2006 we bought Mendoza Vineyards winery in Godoy Cruz, 15 minutes from Mendoza city centre. In 2015 we bought 72 ha of premium vineyards in Alto Agrelo (Finca La Anita). We have grown around 30% per year to reach a production volume of 12 million litres in 2020. 

Mendoza Vineyards works with 50 producers in the Uco Valley and Luján de Cuyo. We employ 58 people to source grapes and wine on long term contracts and to develop new products. Our services include own label brand and product development, wine analysis, label design, wine treatment and blending.

What is the average annual volume now and how does that that break down between reds and whites and the percentage for each main varieties?

Just over half of our vines are Malbec, but we also have a strong focus on Merlot and Chardonnay as well. The majority of our production is red, over 80%. Our exact breakdown is here.

*Estimated quantities by the end of the year.

How does that break down between wines you produce for bulk and for bottle/brands?

We have a strong performance in both bulk and bottled wine production with more of an emphasis on supplying the bulk market. Here is the breakdown.

What is the split between domestic and exports and how has that changed in recent years?

The vast majority of what we produce is for exports around the world, but over the last three years we have also seen strong growth in the domestic market, but at much smaller volumes.

What are your main export markets and how has that changed in recent years? 

The US, UK, Germany and Canada are the main export markets. We have seen a big swing in exports from the US to the UK in the last year (since it has been part of Origin Wine). In 2019 we exported 3.5m litres to the US and just over 1m litres to the UK. In 2020 that had switched to 2.8m litres in the UK and 1.4m litres to the US. Exports to Canada have also gone from virtually zero to 2m litres in 2020.

How has 2020 been for you and the impact of Covid-19? How have you changed and adapted?

We are growing around 30% year-on-year. In the local market we increased off-trade volume doing promotions with retailers and Tetra Pak has performed particularly well. Our on-trade distributors did a lot of work with wine shops, delivery, promotions etc.

The European market increased too because we are strong in the off-trade. In the US market, things were more complicated because we are selling through both on and off-trade with numerous outlets to manage. We opened a lot of new markets in South America too, so overall it has been a good year.

Has it had an impact on the volumes and values of your exports? If so how?

The US market sales are lower versus our yearly forecast, but overall we are on track with our budget because European sales have increased.

Have you had to change and adapt which markets you are exporting your wine to during 2020?

We did a lot of videos conference with our clients, virtual tasting, training, etc. On the communication side it was more difficult because without having any wine fairs, visiting clients it is difficult to have the right feeling when we can’t meet “face to face”. We were lucky because we have a lot of long-term client contacts.  But it’s difficult to launch new products or to find new potential clients.

Have you seen a change from buyers/ markets in the wines they want from you?

We did increase our bulk export sales because Argentina is very competitive in terms of the quality/price ratio. Also, we saw an increase in white and rosé sales during the summer.

How do you see the 2021 vintage and the market for Argentine wine?

A bit too early to say. I think similar to the 2020 vintage, maybe a small price increase for white wines because we have a shortage.

How have the prices for bulk and bottle wine been compared to average in 2020?

The price of white and generic (dry red and white wine) has increased over the past four months due to high demand. The rest was stable.

What do you expect to see happen in 2021 in terms of pricing for bulk and bottle wine?

I think white wine will increase and generic (dry red and white wine) red and white too, but we will still be competitive. Bottled wine prices will remain stable although this will depend upon the economic situation in Argentina. If we have a devaluation, the price will be stable for bulk wine.

Any developments happening in the winery and your vineyards in terms of plantings/ growing the business?

We planted 5 ha of Cabernet Franc for premium quality. Also, we have maintained a level of investment; technical equipment, tourism, barrels, vineyards, etc

Anything else you would like to share?

We are keen to promote our premium wines from Argentina through our range of Finca La Anita single estate wines. Argentina is very strong in this sector too and has seen healthy growth globally during the Covid crisis through specialist retail and online sales in particular.