There are 35 countries making up the region of Latin America and the Caribbean. This incredible mosaic of diversity is tempting for Argentine wines: rich in tourism and luxurious hotels, apart from bars, restaurants, discount stores and supermarkets chains.
The main and almost exclusive competitor of Argentina is Chile in the 7 leading markets: Venezuela, Peru, Colombia, Brazil, Uruguay, Paraguay and Mexico. These destinations were analyzed in the cycle organized by “Área del Vino” for the Argentine Society of Wine (SAV).
“Chile will be our main competitor, as Latin America is not so attractive for our international competitors because it covers 2% of the global imports. Besides, the average price of wine imports -USD 2.4 per liter- is under the world average – USD 3.27 per liter-,” highlighted Javier Merino, director of Área del Vino.
The exception of this rule is Brazil: market where wine imports amount to USD 240 million. There, the competition is hard and two neighboring suppliers are leading the markets: USD 76 million supplied by Chile and USD 53 million by Argentina. The other four origins of wines are Portugal, Italy, France and Spain.
In Paraguay, Argentina covers 78% of the market. However, Chile achieved 10% of share in a year. On the contrary, in Mexico, Argentina has only a small share of 12%, being the two leading countries Spain and Chile.
In Peru, Argentina is responsible for USD 10 million out of USD 20 million of the total wine imported. “There, it has been growing by 18% per year. In 5 years, it managed to win 14 points of share,” explained Merino.
Finally, Colombia is an interesting market that imports USD 36 million. There, Chile is heading the market reaching USD 20 million and a 52% share. The Argentina’s share amounts to 27% and it exports USD 10 million.
In order to conclude, imports of the 7 countries mentioned, between 2006 and 2011, went from USD 295 million to USD 492.9 million, and the growth rate reached 17%. Nowadays, Argentina boasts a 37.2% share on average in all the countries analyzed.
Channels: it is expected a decline in the on-trade in Latin America
“The on-trade shows a downward trend for 2015 all over the Latin America, except in Colombia because it is a very small market and Mexico which, though is large, is consuming increasingly this channel, ”according to data coming from Euromonitor, provided by Fernando Trollano.
In Colombia and Venezuela, the largest concentration is registered in supermarkets, due to the low culture of wine (3 out of 4 bottles are sold in supermarkets). In Peru, specialized stores so-called “licorerías” (liquor stores) are considered very important. “Nonetheless, this share is falling and the supermarket is gaining ground. The idea in this market is to increase the share of the off-trade channel and higher-value products.”
In Colombia, supermarket accounts for 76% of the total distribution. “The leading chains focused on low-priced lines. It is reported a growth in volume and a slowing down of the growth rate in terms of value, “highlighted Trollano.
About this market, Hugo Sabogal, Public Relations at Wines of Argentina for Latin America, pointed out that one of the promising channels are hotels which, although use margins of 300% in wines, in the past few years, in Colombia the hotel supply increases five times.