2012: Looking towards the end of the world

Something about 2012. Is it just me or are things so much more ominous this year? As I sit in Bodega Calle with a bottle of Ca de Calle nearby, I contemplate on the few short days since my arrival this harvest season. A couple weeks before my arrival, one winery employee leaves after 10 years with us, dissatisfied that he is no longer the only “key” employee in the company, that he in short has to respect reporting requirements on inventory movements, while at the same time he leaves under vague staff accusations that he may have stolen a pallet of Torrontés from a shipment made to a nearby cold storage facility. Unprovable of course, primarily because he did not prepare the correct documents required for the inventory transfer of this fateful shipment. Ironic. If “angel’s share” is wine lost to evaporation, what do you call this?

This morning I had a conversation with a long time Mendoza “bodeguero”. During the last 14 years they allowed their winery to build in the size of its administrative and winemaking staff as they pushed into new markets and strove to improve their wines with each harvest. We as faithful importers represent and inform on all sides of the market. We represent our buyer’s desire to have good quality wine for a good price while at the same time we try to make sure the wineries we represent get rewarded with adequate pricing for the quality products they produce. It is a hard balance at times. Today, I was told that in addition to laying off all the permanent staff outside the immediate family, they will need to raise their pricing 20% in order to survive the rampant Argentine inflation, (137% since 2007).

If 2011 marked the apex of the boom, then surely 2012 marks the pull back. As accurately forecast in the documentary Boom Varietal, (facebook.com/BoomVarietal), Argentina’s problem is not Yellow Tail, it was not the film Sideways. It is Argentina’s government. As I recall, the first push into the US wine market by Argentina in the 80’s was subdued not by an American disinterest in the country’s products, rather it was the Argentine government itself that messed up the economy so badly that wineries couldn’t afford to export their products. President Menem pushed the reset button in the late 90’s, but by then Argentina’s wineries had to start from the beginning all over again. I must ask, will we be doomed to repeat this history?

It is fitting that I sit towards the “end of the world” contemplating “the end of the world” of Argentina. It may of course not be the End Of The World, but certainly things are changing very quickly. My friend, the imperiled winery owner, said that he heard that the Presidenta doesn’t want to allow the peso to devalue “because it would strengthen her political opponents on the right.” It reminded me of our Republican congress for a second when they say as long as Obama fails, we win. Hey, anybody in politics these days care about their own country?

A rough straw poll seems to indicate that maybe close to 30% or more of the small wineries in Argentina may skip this year’s harvest or worse yet, forever close their doors. A growing number of wineries are for sale. Tough position and tricky to know what to do when 2012 seems to be setting up to be clearly a better harvest than 2011. A hot year again, no surprise there. Particularly in the famed Luján region and extending east from the mountains. The winner this year will be Valle de Uco. Higher altitude, with cooler nights and a longer growing season, the preference is becoming increasingly clear.

The fact that our winery is located in Luján gives us pause. The most important DOC wine region in Argentina is Luján de Cuyo. We had great illusions about qualifying for Luján DOC Malbec status, but now with the hot weather, I am uncertain. Better fruit is to be had farther south…

Today’s marks a tough day in the business of producing wine in Bodega Calle. We were ready to fill 90,000 bottles of 2011 Malbec, Cab/Sauv and Merlot. The quality of the glass bottles were so bad we had to stop the bottling and send everyone home. Our Argentine supplier, Cristalería Rosario, sent us bottles worse than I have ever seen in my life.

Don't buy bottles from Cristalería Rosario.

Of particular interest is the nipple on the bottle in the lower left. Is that where you are supposed to open it?
Industria Argentina can’t be the ongoing joke for all eternity. Please folks, let’s not fall apart so easily. We can do better! Until next time. Chau.

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Southern Wine Group & Rage Productions announce world premiere of Boom Varietal, a documentary on the rise of Argentine Malbec

FOR IMMEDIATE RELEASE: Bend, Oregon (September 29, 2011) – Southern Wine Group, (SWG) “Importers of Latin America’s Finest Wines” is pleased to announce the world premiere of Boom Varietal, a full-length documentary about Argentina’s Malbec wine, on October 7th, 2011 as an official selection at the 8th annual Bend Film Festival.

“The film has been a lot of work, but it has been rewarding to document what we have seen happening in Argentina over the past decade during Malbec’s introduction into the U.S. This film captures the lives of both the wine growers and the Malbec grape itself in a very honest and captivating way. This film will stand with the best wine documentaries ever produced,” said Kirk Ermisch, SWG’s President and the film’s Executive Producer.

Sky Pinnick, Rage Production’s owner and the film’s Director added, “We are very proud of this film. We spent eighteen months following the lives of various wine makers, growers, producers and field workers in Argentina, a culture we knew almost nothing about when we first started this project. We transported our RED digital cinema camera down to Argentina, which provided some challenges but also allowed us to capture some really beautiful cinematography. It wasn’t easy producing a film in a foreign country, but we were able to cross cultural barriers and tell an amazing story that I think people will connect with in any language.”

The buzz among wine connoisseurs and novices alike is one word – Malbec. Originally from France, Malbec found its perfect home, its perfect terroir in the dry Argentine climate. Its booming popularity has swept through the U.S. and the world, reviving a varietal that had been nearly lost. Boom Varietal will inspire your palate and a love for Argentina’s rich culture.

About Southern Wine Group
Southern Wine Group is the pioneering national wine importer and producer of fine wines from Latin America. SWG began operation in 2000 and was among the very first U.S. importers of Argentine Malbec and Torrontes in the country. They have since expanded over the last decade to include in the portfolio, “best of class” wines from leading boutique producers in Chile, Argentina, Uruguay and Mexico. Visit us at www.southernwinegroup.com.

About Rage Productions
Rage Productions has been producing award winning films, music videos and TV commercials since 1994. Their internationally distributed films have won awards such as Best Film, Best Core Film, Best Cinematography and Best Editing. Based in Bend, Oregon they offer a wide range of services from filming to editing to music composition. Learn more about Rage at: www.rageproductions.com.

For more information, see www.BOOMVARIETAL.com or contact Kirk Ermisch or Sky Pinnick directly.

Contact:
Kirk Ermisch
Southern Wine Group
kirk@southernwinegroup.com
Or
Sky Pinnick
Rage Productions
sky@rageproductions.com

See the release on the wire service

2011 Mendoza Harvest and Reflections on the State of the Industry

Hello everyone,
I don’t consider myself a “blogger” so I don’t update this very often. Nor, does there seem to be enough time in the day to allow to get to this as much as I’d like. However from time to time the need does seem to arise. Either someone surprises me by saying “hey you haven’t written anything for a while, why not?” or something happens that tends to grind in the back of my mind until I attempt to express it here or in private email form. So here goes, what’s on my mind, North American Summer 2011.

I am just finishing my harvest stay down here at Bodega Calle. It was our 10th harvest. I cannot believe it and I was kinda surprised to realize this, (I was at Vina Altair in Chile when I asked them how many harvests they had done, Ana Maria the expert winemaker there told me, “this is our 10th harvest, we started in 2002” to which I replied, “gosh, I guess this is our 10th harvest in Mendoza too”). 10 years. Wow, what a ride. We haven’t yet had any kind of big party to celebrate. We just keep our heads down and keep working. Seems to be our character. Eventually we will have to organize something…

I personally have been involved with 13 harvests in Mendoza. I have seen better harvests than others, but Mendoza generally delivers on the promise. Not at all like other major growing areas in the world. That said, to understand harvests in Mendoza think of a tuning device that has 4-5 knobs. One for early harvest frosts, one for dry, scorching summer heat, one for hail, and one for harvest time rain. If you want to throw in one for Zonda, the super-blustery winds that happen from time to time that can blow off grape flowers, then we could throw that in too.

2011 the knob was way up on spring frosts in Valle de Uco. Up on Zonda, way up, then suddenly down on heat, up on severe hail in Valle de Uco and Agrelo, and down on harvest rains. What we got was a very reduced crop in Valle de Uco and parts of Lujan de Cuyo, (Agrelo). Grapes came in substantially late because of the cool, dry harvest conditions. Because of the reduced yields in Valle de Uco, quality was very good with deep black red colors that were out of this world. Lujan, did not have its best year. Not a bad year by any means, but not the best. Yields were standard, and the early hot summer heat seemed to last too long for quality’s sake in Lujan. Once the nights got cooler, it was too late to really help things.

I guess you could say that it was a bit of a “global warming” harvest. Intense climatic episodes, with lower altitudes getting blasted too much for their own good with summer heat, albeit that the duration of the heat wasn’t as long as feared.

We’ll see how it all goes from here. Despite what I said, we have a lot of great quality wine (having bought lots of good fruit this year), to watch going forward. We were generally pleased with everything and glad to have another harvest under our belt.

The climatic conditions of harvest this year had a huge impact on grape prices once you factored in demand for Malbec grapes. Throw cronic double digit Argentine inflation into the mix and the continued weak dollar and you got a pretty tricky situation for everyone. On the bright side, it means Argentines will get what they want, diversity in sales. As Malbec prices move up, the consumer world will be willing to purchase lower priced, other varietal wines when they can get equal quality non-Malbec wines for a few dollars less on the shelf.

The silver lining may be indeed that Argentina firmly evolves beyond the “one-varietal” “one-hit-wonder” status that it seems to have laid before itself. I won’t say I know the content of John Gillespie‘s speech at the Foro Vitivinicula in Sept this year, but the title I understand has something to do with a consumer’s willingness to “trade-down” when prices of their favorite wines go up in price. Basically, wine drinkers are only brand or varietal loyal to a point. Wine drinking is generally about exploration and if your staple wine gets too expensive then that is a good reason to try something new!

In almost 14 years being involved in Argentina, Malbec was the most expensive per kilo on average than ever before; and I mean in real dollar terms too. Just to get a snapshot of what I am dealing with: Malbec grape prices were up almost 50% this year; and this after a string of years of grape prices increase. Bottles have effectively doubled in price in 12 months. As have cardboard boxes, and labels. Labor? Remember the stereotype that Latin America had cheap labor? Forget about it. Now, Argentina’s minimum wage is nearly that of the USA. Would have anyone thought this would happen so soon? The decision for wineries this year is a true ‘rock and a hard place’ proposition: Make no money this year at the winery or mark up prices, and risk having the consumer, “trade down” and stop buying your product. Not a fun place to be.

Such a tight spot unfortunately brings out the corruption in those that it comes naturally to. In Argentina, wineries that have been in business many years have an accumulated “number” of Malbec volume built up. Understand that in Argentina, if it comes in as “Malbec” and goes out in a red blend and not as “Malbec” the Malbec volume “number” stays on the winery books. Very useful in this time of high prices and high demand that you might have a little bit of Merlot and Cab laying around and want to export it as “Malbec” to one of the more price point conscious importers looking for a deal.

Therefore, beware those $6.99-9.99 wines marked as “Malbec” on the front label. I would say that it is virtually impossible to make a 100% varietal Malbec wine these days at the above prices confronted with the real costs associated with making such a product. If the wine isn’t on close out or from a vintage dating prior to 2010 then forget about it. It isn’t pure Malbec my friends.

Good Malbec starts at about $14.99 retail these days, still a great deal. Things start to get interesting at about $18.99 and above. Still a deal when these wines compete with the best wines of the world. Unfortunately, Malbec is no longer “cheap” so who knows what is about to happen to volume. At only about 2% of the import market, one would think that continued growth is probable, (especially since Australian Shiraz grew to be about 7% of the same market) . But like everything from Argentina over the last 80 years, it is the Argentine’s (READ lousy Government) themselves that seem to always mess up a good thing. So muchachos, where do we go from here?

Another thing I have been working on this year is a film with Sky Pinnick of Rage Films on the Boom of Malbec. It will be called Boom Varietal we think, (see http://www.Boomvarietal.com). It hopes to explore and answer this question.

Finally, unlike most other boutique importers of Argentine wines, we have always sought to sell more than Malbec and we have always sought to sell more than wines from Argentina. We sell wines from 4 Latin American countries now and have successfully created niches for them. We sell a diversity of different varietal wines from Argentina and have done so since the beginning. I think that Malbec will remain important for us as a business and for wine drinkers around the world. However, now more than any other time before, it makes sense to explore other wines from Argentina, not to mention all the great wines to be discovered in Chile, Uruguay, Mexico and beyond.

Happy tasting!
Kirk

South American Harvest Notes 2010

Hi all,
I am just back from 3 months in Mexico, Argentina, Uruguay and Chile. I wanted to update everyone and give you my impression on South America’s harvest, which just finished.

Vineyards around Ensenada, Mexico got record rainfall this winter. Somewhere close to 27 inches! This will likely make the dry-farmed vineyards quite healthy this summer. Expect grape productions to raise. As long as the summer is not too much of a scorcher, quality should be the best in a long while as well. Look for a run of good Jubileo starting with the 2009 harvest and with a hopeful repeat in 2010.

Uruguay, had some early harvest rains so Merlot in particular was not in the best condition. Albariño and Tannat, two popular offerings from our supplier Bouza, did however fare better. So not to despair.

Chile had good weather, but the harvest was down by close to 12%. Because of the earthquake, some production facilities withstood damage and were not operating at full capacity. Tabali, reported no damage and experienced a cool, dry harvest with maximum hang-time for the grapes.

Argentina had another very hot summer, one notable rainy week and then prolonged cool, dry weather. Those that knew to wait, were rewarded with perfect Brix and even phenolic ripeness and extreme dark skins due to the cold nights. Those that picked in a hurry, thinking that 2010 was going to be a replay of 2008 got grapes with marginal ripeness and poor color.

We at Bodega Calle had several heated discussions with growers wanting to harvest in a hurry. In the end, our calm in the storm paid off and we were rewarded with lots of Reserve quality wine. Even though we will make more Reserva Ca de Calle this year than ever. Alberti 154 is likely to be rewarded with lots of premium juice that really grades more into the $20 retail range rather than the $14.99/bot value we strive to hit (or exceed in this case). This reminds me what a good deal Alberti 154 is considering that most sell the product for $12.99 retail.

It is my hope one day that our wines will sell for a bit more on the shelf than they do now. Our wines spare no expense and are completely hand picked and selected and made with the use of gravity flow. We will hold the low pricing as long as we can so that everyone can try them. However, grape prices grew by between 30-50%, inflation while holding constant, currently is close to 30% on the year. Things don’t bode well for us holding pricing much longer, but we will try.

Cheers,
Kirk

Mendoza Harvest 2009

2009 harvest in Mendoza, Argentina is looking good so far. Flower set had some isolated issues with frost and winds earlier in the year, but it hasn’t made much of a difference except for lowering final harvest yields. A hot February pushed sugars to early heights, but things have thus far mellowed and overall tannic ripeness is coming along quickly now. In some cases, some vineyards are about a week early compared to average, in other cases, harvest dates will be about even with average. Colors are showing in the winery to be intense and dark, early on in the ferments. With yields down, we are hoping that concentrations in fruit flavors will be even more intense than last year. Luckily, the harvest has been great with no rain and with warm days and cool nights.  Higher altitudes may prove to be the winners this year as they were less affected by the warm summer.

Ca de Calle 2007 Gran Reserva

cadecallelabel1By now you have likely tasted through the 2007 vintage Albert 154 wines. If sales are any indication, they are by far the best wines we have ever produced in our small Lujan de Cuyo based winery. In early 2007 we separated out and fermented a small selection of our best grapes from that harvest, aging the microcuvees with a combination of new and used French oak. Luis Barraud (of Vina Cobos fame) went on to finish the project, assembling the final blend this summer. Now that the wine has had some time to settle in bottle, this blend of 32% Malbec, 23% Bonarda, 21% Syrah, 16% Cabernet Sauvignon, and 8% Merlot is drinking fabulously, filled with the dense rustic flavors of dark fruits and berries that typify this region.

We named the wine Ca’ de Calle (Calle’s Place), in honor of Elivra Calle, the woman who shared our vision of remodeling this historic winery and helped turn it into reality.

Production is limited to 550 cases.

– Jeff