Old World decline in Oz opens Argentine opportunity

Wines of Argentina is upping its efforts in Australia, now one of its fastest growing markets, after revealing that exports to the country have increased 400% in volume in the past four years.

Scenes from Wines of Argentina’s recent Cambalache event in Sydney

While historically a combination of New Zealand and Old World countries have taken the lion’s share of Australian imports, some of the more traditional areas of countries such as France and Italy are starting to see a decline, according to Andrew Maidment, Europe and Asia head of Wines of Argentina, giving New World and emerging wine regions an opportunity for growth.

“Argentina is benefitting from consumers search for something different and this is seeing us pick up market share”, he said. “This growth has been organic and not prompted by significant changes in policies, such as free trade agreements, or other outside influences.”

Instead Maidment believes Australia’s “openness” to wines from other countries is driving growth with 33% of on-trade sales in Australia now made up of imported wines – a segment that has grown by 30% in the past year alone. The growing popularity of Malbec and Torrontes has also helped raise the profile of Argentine wines, with sales of Malbec reported to have grown 115% by volume in the Australian on-trade during 2015.

“‘Traditionally’ successful varieties in Australia such as Shiraz (-21%), Cabernet (-22%) and Pinot Noir (-11%) appear to be losing ground and in their place Malbec has emerged as a popular alternative, along with Sangiovese blends and Tempranillo blends”, said Maidment.

Despite experiencing strong growth in the past four years, Argentine wine still accounts for just 2% of the Australian market, leaving significant room for further development.

A traditional Argentina grill at Wines of Argentina’s recent Cambalache event in Sydney

Wines of Argentina is supporting this growth by carrying out a number of initiatives in the country, which have included hosting a Cambalache event in Sydney in November. The trade-focused event saw 30 Argentine wineries showcase their wines to 250 guests, who were given a full Argentine cultural experience, complete with tango, live music, street art and traditional cuisine.

“Activities such as Cambalache in November were aimed specifically at building a brand for Argentina by bringing both the country and the wines to life”, said Maidment. “We have proven that Argentina can have a strong brand – one that is very attractive to the Australian trade and consumer – but now the challenge is to continue with enough sustained, widespread activity to ensure this brand makes it in front of drinkers.”

Wines of Argentina will be continuing its efforts to raise the profile of Argentine wine in Australia throughout 2016, working with both the on- and off-trade, including major retailers and specialist wine retailers, and direct to consumer through various initiatives.

“The door is open to Argentine wines and we feel strongly that now is the right time to focus more efforts on the market”, said Maidment.

While the USA remains Argentina’s biggest export market, and Australia a promising new prospect, the UK is still the “one to watch”, says Maidment.

“We’re investing more heavily in the UK than ever before and continuing the positive trend is a top priority for next year.”

Sales of Argentine wine in the UK have grown by 26% in the past year, according to Nielsen, making it the fastest growing country of origin.

Within mainland Europe the strongest markets are Switzerland, Scandinavia (specifically Sweden) and Germany, which is a further focus market for 2016.

“We consider Germany to be have significant upside potential, so have identified it as our second focus market in Europe for 2016”, said Maidment.

Looking ahead, Wines of Argentina’s long term goal is to see the country’s bottled wine exports increase from it’s current level ($850 million in 2015) to $2 billion annually over the coming years.

“We believe we have the right strategy in place and that with favourable economic conditions – conducive to exports – growth on this level is achievable in the medium term”, said Maidment.

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