AnuvaBlog

Torrontés: the Next Malbec

                Since 2004 no other country has seen the meteoric rise in volume, value and market share figures that Argentina has in the import segment of fine wine to the U.S. Over the last two years while all other segments of imported wine are down in both value and volume—except for Argentina’s across the Andes rival—Argentina has seen value increase in 2008 by 26.6% (U$ 500m) and volume by 15.6% (18.1m 9L cases), and through 3Q 09 value is up 8.8% and volume 8.9%. (It’s important to note that over 50% of all wine sales in the U.S. are done in 4Q of any year due to the Holidays)

                The majority of the reason for this growth during a recessed world economy is due to the great value that is Malbec. But of recent, Argentina’s ace in the hole has been its little known white wine called Torrontés (pronounced tohr-own-TAYS).  Torrontés, a grape variety of Spanish origin has found a home in the arid high altitudes of Salta, La Rioja and San Juan. The dryness and altitude factors enable Torrontés to achieve its best expression while maintaining its acidity, something that it loses at lower altitudes and with too much rain. When achieving its fullest personality a Salteño (from Salta) Torrontés—widely considered to be the best region—such as one from Carinae Vinos, will have an exuberant nose of honeyed orange blossom, jasmine and citrus while the mouth remains dry and crisp with flavors of pineapple, grapefruit, apricot and tropical fruits. This Salteño version is contrasted only slightly by its Riojano (see Aguijón de Abeja) and San Juanino (see Serrera Torrontés) counterparts that exhibit more delicacy and elegance. All Torrontés pair extremely well with light pastas, fishes and salads. For specific pairings try a nice apricot or fig jam over triple cream brie; prosciutto wrapped honey dew or cantaloupe; or peach, raspberry or mango sorbet with lightly flavored biscotti.  

It is this humble author’s opinion that this unique flavor profile of Torrontés combined with the newness factor that will ultimately be responsible for its growth in the U.S. and world markets over the next decade. Compared with the overly ubiquitous (yes, I just used those two words together) Chardonnay that has led to an ABC (“Anything But Chardonnay”) philosophy amongst many an aficionado, slightly fatty Viognier or off-dry Gewurztraminer—the three varieties that Torrontés is most often likened to—Torrontés has the sweet floral nose of the latter two that Chard lacks, better acidity that Viognier, and is dryer and more food friendly than Gerwurztraminar while generally being a better bang for your buck than any of the three.  This flavor profile and price point translate to sales potential.

 In the first nine months of 2009, exports for this varietal have grown 42% in value and 40% in volume.  At Anuva’s own wine tastings in the U.S. and here in Buenos Aires our wines that most frequently get a “I’ve never tried anything like that” response is Torrontés. Interestingly, the next most likely wine to get a response like that is our Bonardas.

What is Bonarda? Where Malbec is peaking and Torrontés is on its way up, Bonarda is still completely off the map. Think a nice smokey-chocolate nose with hints of raisin and fig. In the mouth, juicy blueberries and hints of pepper with an aggressive mouthfeel. This is the varietal that most often gets “wows” from wine professionals at our wine tastings. It blows away the normal flavor profile of a deep colored, full bodied red. Mairena Bonarda has been one that gets great reviews from critics and neophytes alike. Look for Bonarda to start selling well in the next 2-3 years.  

It seems like all of our assumptions have been confirmed and reconfirmed. The hardest hit sectors of the U.S. wine market are fine dining, chain restaurants, and wine shops according to Wines and Vines. The good news is that website and online retail sales have remained constant (good news for me that is), and sales in imported wines from Argentina, Chile and Spain are all way up.

It still boggles the mind that a product that is so ubiquitous as wine would be ILLEGAL to ship anywhere. It’s not like we’re talking about explosives or anthrax. It’s wine. Anyone, anywhere, anytime can go down to their local supermarket and buy as much as they want. So why the big deal? Why waste millions of dollars in legislation and man power fighting this?

Distributors.

I can understand that the point of view of a distributor is that direct to consumer shipping, especially from domestic wineries, will steal market share from their businesses. The flaw in this argument, is that most of the wineries that are truly interested  in making their small business work through D2C shipping are too small to work with many distributors. They simply don’t have the volume. Even if they could afford to supply many different distributors with a pallet per month, they run the risk of running out of inventory for territories where they sell well and being ignored by or buried in the portfolios of bigger distributors.

Wine will never stop being put on shelves. And just as this will always remain the main model for buying wine, the distributor will have his place. It’s just that the precise description of that place needs to be revisited to account for small producers to sell D2C.

That said, if a distributor can pay attention to lower volume wineries and develop their brands with an understanding of their inventory levels and marketing budget, this should actually reinforce business for both the winery selling D2C and the distributor selling on the shelf.

This is not rocket science, people, its just selling wine bottles. The harder we make it for everyone, the more the consumer suffers and the smaller the overall marketplace.

I will admit that this is a bit of a sore subject for me, as I am in the business of shipping wine, but I have not yet met a single American who has attended one of my wine tastings who doesn’t cringe when they realize that they live in a state that does not permit direct to consumer shipping of wine.

They stand and look at me flabbergasted, as if I had something to do with the fact that they can’t simply go on the internet and buy the wine they prefer. An article here in the Citizen’s Voice gives great insight into why these direct shipping bans exist (someone thinks that they will not be getting their money), and the ridiculousness of that:

“There is nothing complicated about allowing consumers to buy the wine they prefer over the Internet and having it shipped, while still ensuring compliance with state tax and underage drinking laws. Most other states have figured it out, but the Politburo that runs Pennsylvania’s booze monopoly prefers to treat it as indecipherable rocket science.

According to the Wine Institute, 81 percent of all adult Americans have access to their preferred brands over the Internet. Pennsylvanians are a large chunk of the other 19 percent.

And make no mistake, this truly is a matter of choice. The Wine Institute says that 40,000 to 50,000 domestic labels, and another 40,000 to 50,000 imported labels, are available for sale in the United States each year. Well, the United States excluding Pennsylvania, where the state monopoly has 3,024 listed varieties and about 22,000 others that can be ordered through the state system — about 25 percent of the variety available to other Americans, often at better prices.

Several courts have found that states cannot simply forbid shipments of out-of-state wines, if they allow shipments of wines produced in-state — a little matter known as interstate commerce.

Here’s how a pending bill in Pennsylvania would purport to have the state comply. Consumers could order from a winery, but the shipment would have to go to the state Liquor Control Board, which would then deliver it for a fee. Orders could be made only to wineries that produce 80,000 gallons a year or less, which fits the description of most wineries inside Pennsylvania.

That, of course, is ridiculous. Of 19 “control” states, those where the state government controls varying degrees of the business, 12 allow direct shipments to consumers. None of those states is as “controlled” as Pennsylvania. But New Hampshire, with state-controlled sales, allows direct shipments. It requires shippers to use licensed interstate carriers, for the shipments to be clearly labeled, and for adults to sign the receipts. Consumers get the products they want. The state gets its cut. Cheers.

Rather than forever guarding its own interests, the PLCB should find a way to accommodate consumers who aren’t satisfied with its selection and service. And the Legislature should do far better than trying to convert the PLCB into a delivery service, an enterprise that requires a far greater degree of urgency than the agency is likely to muster.”This article was published Thursday, August 28th, 2008.

It is too bad that ultimately, the consumer is always the one who gets hurt in situations where massive, rich distributors, or other entities that hold onto monopolies are unwilling to change, adapt and overcome new circumstances that will make everyone better off.

To echo again, what the Eerie Times News (a local Pennsylvania paper) says about direct shipping of alcohol as it pertains to Pennsylvanians (and by default all Americans)… Enough already!!

Why can’t people just buy the alcohol they want and not deal with Liquor Control Boards, middlemen, bureaucracy and unwarranted price hikes?

I’m glad that winebusiness.com is regularly putting articles like this among its headlines as this has to be one of the most important issues effecting alcohol trade today.

I don’t understand why state and federal entities that control the alcohol trade see direct to consumer shipping as something that is somehow different from regular retail/wholesale sales. People are still drinking the wine. People can still buy as much as they want whenever they want. It’s just that people now can only get limited types of spirited beverages, either locally made or made by massive producers that can pay to have their product go through “the system” in order to stock shelves.

It is perhaps the working of wholesalers, other middlemen, and larger alcohol companies that is preventing more direct shipping. They seem to be the only ones who THINK they have something to lose.