Higher Ground

Total Argentinian wine volumes have struggled in the U.S., but the real action is at the higher tiers.

Even as the majority of Argentinian wine brands have encountered volume losses in recent years, Mendoza-based Bodega Catena Zapata (winery pictured) has managed to grow, largely thanks to its focus on high-end, site-specific offerings of Argentina’s signature varietal, Malbec.
Even as the majority of Argentinian wine brands have encountered volume losses in recent years, Mendoza-based Bodega Catena Zapata (winery pictured) has managed to grow, largely thanks to its focus on high-end, site-specific offerings of Argentina’s signature varietal, Malbec.

For the past five years, Argentinian table wine exports to the U.S. have steadily declined, reaching an all-time low of 5.02 million cases in 2019. Almost all of the country’s leading brands have suffered volume losses in recent years, with only a few bright spots bucking category trends. But there are reasons for optimism, thanks to the premiumization of the country’s most revered varietal, Malbec.

Even as Argentina’s exports to the U.S. have dropped precipitously, U.S. imports of Argentinian Malbec eked out gains last year, rising to 4.2 million cases—up from 3.98 million cases in the previous year. And producers are taking note, zeroing in on more upscale iterations of the varietal, and putting regional specificity at the forefront.

These moves have correlated with a surge in Argentinian brands retailing at above $15, with premium Argentinian table wine up 26% in IRI channels year-to-date ending September 6. And while the Covid-19 pandemic remains a pressing global issue, a number of Argentinian wine brands have seen major growth in retail channels, helping to offset the collapse of on-premise sales. When restaurants and bars are able to forge a full-fledged return to normalcy, Argentinian winemakers are optimistic that the investment in the country’s top tiers will enable more brands to succeed in those accounts.

Chicago-based importer and marketer Winesellers, Ltd. handles two Argentinian labels, Bodegas Zuccardi (winery pictured) and Santa Julia, both of which play at the super-premium end of the category. Winesellers highlights its brands’ regionality, especially in the Uco Valley.
Chicago-based importer and marketer Winesellers, Ltd. handles two Argentinian labels, Bodegas Zuccardi (winery pictured) and Santa Julia, both of which play at the super-premium end of the category. Winesellers highlights its brands’ regionality, especially in the Uco Valley.

Malbec Moves Up

Though Argentinian Malbec exports to the U.S. are still well below their all-time high of 4.91 million cases in 2013—and not quite on track to match the growth of the mid-2000s, when exports shot up by millions of cases every year—Malbec is currently staging something of a comeback in the U.S. The renewed interest is due partly to Malbec’s robust flavor profile, which resonates with U.S. consumers—especially younger demographics. “It has this rich flavor, and such smooth tannins; it’s an incredibly concentrated wine, but has a softness, and U.S. consumers really gravitate toward that,” says Laura Catena, fourth-generation winemaker and managing director at Argentina’s Bodega Catena Zapata. “It’s a top varietal for millennials too, and that demographic has proven extremely loyal to Malbec, especially as more sales start to happen online.”

The flagship Catena Mendoza Malbec ($25 a 750-ml.) jumped by 45% last year, according to Catena, making it the fastest-growing varietal within the winery’s core lineup, which also includes Cabernet Sauvignon and Chardonnay, among others. Though the winery has made moves with varietals outside of Malbec, Catena emphasizes that Malbec remains the signature. “I don’t find it necessary for there to be some varietal that’s growing more for Argentina than Malbec,” she says. “The regionality of Malbec, to me, is more exciting than, say, the regionality of Cabernet Sauvignon from Argentina. There doesn’t need to be some new variety from Argentina when there’s so much more about Malbec that people haven’t explored.”

To that end, Bodega Catena Zapata offers a number of hyper-specific wines, including three from its Adrianna Vineyard, which rises nearly 5,000 feet above sea level in Mendoza. The Adrianna Vineyard Mundus Bacillus Terrae Malbec ($140 a 750-ml.), Fortuna Terrae Malbec ($140), and River Stones Malbec ($125) each express different parcels of the vineyard and illustrate the unique terroir that can be found in even just 1.4-hectares (3.5 acres) of space. Ultimately, Catena wants to raise awareness of Malbec’s upscale potential. “The world is only just beginning to know Malbec,” she says. “This is a varietal that truly expresses terroir, and lets the diverse alluvial soils in Argentina speak. Eventually, I want people to know Argentinian Malbec the way they know Pinot Noir from Burgundy.” Overall, the winery sells approximately 165,000 cases annually in the U.S.

Elsewhere in Mendoza, Alamos Wines is seeing promise for Malbec above $10 as well, especially in IRI channels. “We’re seeing the premium segment contributing the most volume growth in the Argentinian category,” says Molly Davis, vice president of marketing at E. & J. Gallo, which handles the brand in the U.S. “For Alamos Malbec, we’re seeing growth trends over the last 12 weeks of 28.4% in IRI. We’re encouraged to see this growth, and are excited that consumers are once again seeking out Malbec from Argentina.” The Alamos portfolio includes an entry-level, Mendoza-appellated Malbec ($15 a 750-ml.) as well as the slightly more upscale Mendoza Selección Malbec ($20).

Also emphasizing Malbec is Moët Hennessy’s Terrazas de los Andes, which is likewise stressing the varietal’s prowess and further potential in the U.S. market. “When someone asks me what’s coming after Malbec, I tell them that something big is on the horizon—Argentina,” says Terrazas winemaker Hervé Birnie-Scott. “Malbec is the best varietal to reveal the terroir that we have in Argentina, so we’re starting to see a lot of interesting expressions of Argentina that are illustrated through the grape. I love using the parallel with Napa, where you’re drinking an Oakville, or a Mount Veeder, or a Spring Mountain, but it’s all Cabernet. Here, you’re going to drink Malbec, but it’ll be an Altamira or a Las Compuertas.” Aside from its core Reserva Malbec ($15 a 750-ml.), the winery offers a number of other site-specific Malbecs, ranging from single vineyards to single parcels that are priced up to $100; it’s reaped the benefits of this upscale lineup, with volume rising slightly last year by 1.3% to 149,000 cases in the U.S.

At Winesellers, Ltd., which handles Argentinian label Familia Zuccardi and its Bodegas Santa Julia brand, co-president Adam Sager has also taken note of the importance of regional specificity in growing Malbec in the U.S. “We’re seeing an evolution in consumer awareness of different styles of Malbec, that are produced depending on site-specific growing areas of Mendoza and, more specifically, in the Uco Valley,” he says. “One of the lessons learned from Australia and the collapse of Shiraz was that the region and its producers always need to be improving quality—not just chasing the bottom on price.” Both Santa Julia and Familia Zuccardi offer Malbecs within super-premium price points, with the latter highlighting even more upscale iterations of the varietal, including José Zuccardi Uco Valley Malbec ($45 a 750-ml.) and Finca Piedra Infinita Paraje Altamira Uco Valley Malbec ($140).

While Malbec reigns supreme in Argentina, and continues to act as the country’s calling card worldwide, more winemakers are exploring alternative varietals, among them Zolo (winery pictured), which offers such white wines as Torrontés and Sauvignon Blanc.
While Malbec reigns supreme in Argentina, and continues to act as the country’s calling card worldwide, more winemakers are exploring alternative varietals, among them Zolo (winery pictured), which offers such white wines as Torrontés and Sauvignon Blanc.

Premiumization Path

While Malbec has certainly buoyed Argentina’s high end, additional varietals and experimental winemaking techniques are also demonstrating the country’s varied terroir and viticultural prowess. For its part, Bodega Norton is looking more toward the country’s white varietals. “Argentina has great white wines that U.S. consumers will love,” says export director Santiago Galli. “From Sauvignon Blanc to Sémillon, there’s extraordinary quality in Argentina’s white wines, and the segment continues to develop.” He points to Bodega Norton’s recently released sparkling Grüner Veltliner—currently exclusive to South America—which debuted with exceptional results. Bodega Norton’s white wine lineup also includes Reserva Chardonnay ($17 a 750-ml.), Barrel Select Chardonnay ($15), and Barrel Select Sauvignon Blanc ($15).

Bodega Norton, like others, is dedicating more time and effort to highlighting Argentina’s varied terroir. “Argentina has a unique combination of altitudes, with vineyards situated at 10,000 feet above sea level, and others that are right by the sea,” says Galli. He adds that Bodega Norton has five separate vineyards that are spread across Mendoza in an area known as the “First Zone” for the quality of its grapes. Norton’s vineyards also skew older, with the majority around 30 years old and some as much as 80 years old.

At Bodega Tapiz, president and owner Patricia Ortiz also looks to white wines as a means of differentiating Argentina and showcasing the diversity of its landscape. “We’re trying to show how varied the white wines can be, in expressing and exploring different places,” she says. “We’re looking at different altitudes, which are extremely important for this country, and we’re getting down into new distinct appellations that highlight specific soil.” Across Ortiz’s three wineries—Tapiz, Wapisa, and Zolo—white varietals like Torrontés and Chardonnay are strong performers.

In Patagonia, winemaker Patricia Ortiz is experimenting with underwater aging through her Wapisa label (bottle pictured).
In Patagonia, winemaker Patricia Ortiz is experimenting with underwater aging through her Wapisa label (bottle pictured).

Ortiz is also innovating with new winemaking techniques; she introduced underwater aging at her Patagonia-based Wapisa winery earlier this year. “The first batch of this project consists of three cages, and we’re comparing the wines to the ones that are stored in our warehouse,” says Ortiz. “We’re measuring the effect of light on the bottles, as well as the effects of pressure and temperature. The idea is that six months underwater is like seven years in the warehouse.” The first batch of wine placed underwater—a total of 1,500 bottles—is a blend of 50% Malbec, 30% Cabernet Sauvignon, and 20% Merlot; eventually, based on the initial results, Ortiz hopes to turn the project into a wine lover’s attraction, wherein consumers can dive down to the cages and retrieve their bottles. The prices have yet to be set for these wines, but Ortiz notes they will skew toward the higher end.

Another technique that has taken hold in Argentina is natural winemaking, with a number of producers joining the fray. Bodega Catena Zapata launched La Marchigiana, a new line of natural wines, last October. “I was so interested in how natural wines tasted a little different—they were more raw and imperfect, in an interesting way,” says Catena, likening the experience to eating sushi for the first time. The La Marchigiana line includes Malbec, Bonarda, and Criollo (all $35 a 750-ml.); Catena says the latter, in particular, has been a revelation for the winery. “Criolla is a pink grape, and it’s a cross-breed—we have some in our vineyards that are cross-bred with Malbec,” she says. “This wine is like a rosé, with that bright freshness, but because it’s produced from natural winemaking, there’s a touch of oxidization as well, and some texture that just makes it so much more interesting.” She adds that moving forward, Criolla could serve as a novelty that’s more exclusive to Argentina, given that most of the cuttings in the country are now native species as a result of that cross breeding.

Santa Julia, which has long played in the organic space, also recently introduced a natural wine. Made from certified-organic estate vineyards and with no added sulfites, El Burro ($18 a 750-ml.) is a Mendoza-sourced Malbec, which the winery sees great promise for in the U.S. Ultimately, Argentina’s move toward the higher end is changing the fabric of the country. “Wine in Argentina is much more diverse than we’ve previously been accustomed to,” says Winsesellers’ Sager. “Argentinian winegrowers have invested heavily in researching their various regions, and in a short period of time they’ve made a lot of advancements in the way that they farm and grow grapes, resulting in wines that are unique to both their specific regions and the producer’s interpretation.”