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Leading Latin-American markets on the alert

September 20, 2013 by Laura Saieg | in Exports, News

Although Argentina’s exports to Brazil, Paraguay, Mexico, Peru, and Venezuela do not show an excellent performance, the proximity of the country to these destinations, including the language and the similar character, helps to consolidate Argentine wines’ positioning.

Analyzing the Argentine exports to these five Latin American markets, Brazil, Paraguay, Mexico, Peru, and Venezuela, only the first of them shows a slight growth of 1% by value and 3% by volume, in the period January-July of 2012 versus 2013; whereas the others report a fall, due to different reasons.

Yellow lights for Brazil

As regards Brazil, one of its problems, not only for Argentina, but for all the products imported by Brazil, is that its currency, the real, has been weakened against the dollar in the past few months.

Undoubtedly, this situation affects the retail prices of wines, favoring mostly regional producers.

In spite of this, the market will remain growing, as there is a consuming market hungry for imported wines and new things.

About this destination, Martin Navesi, Brand Manager of Santa Ana’s exports, highlighted that there, the winery is leader in the medium and medium-low segments. “We believe that many consumers will not want to pay more than a certain retail price, so this may lead them to look for the good value we offer.”

Encouraging panorama for the exports to Mexico

Wine import in Mexico concentrates 70% of consumption in this country. Currently, it has a per capita consumption of 0.65 liters, a very tiny number in comparison with other countries. It is anticipated that consumption will treble by 2020, attaining 180 million liters per year.

Shipments of packaged wine from Argentina to Mexico showed a drop of 1% by value, going from USD 9,509 to USD 9,406. While in terms of volume, the figure remained in 2,466 liters. In the case of this destination, bulk wine appears on stage as a new way of exporting. This way, analyzing the total amounts of 2012 versus 2013, a growth of 15% in value and 85% in volume is observed.

According to Federico Boxaca, Export Manager of Familia Schroeder winery, “Mexico registers every month rising figures, mainly due to a revitalization of the economy and an upward trend of consumption in restaurants.”

Red lights for Venezuela

This year, this market seems to have vanished off the list of Argentine wine exports. In the total of packaged wine, between January-July 2012 versus 2013, the decline was 76% in terms of both value and volume. This downturn, according to wine business people consulted by WineSur, is the result of the economic scene in Venezuela.  From last year on, the country has been taking economic and political measures similar to Argentina’s. What happens is that during 2012, importers need foreign currency to import, and this year the quota is practically non-existent, meaning a disappearance of this market as destination of the exports from Argentina and from all over the world.

Paraguay, towards quality

This destination is still incipient in terms of consumption and wine knowledge. When analyzing wine exports of January-July 2012 versus 2013, packaged wine experienced a drop of 30% by value and 43% by volume.

Despite this downturn, it can be seen during this period that wine consumers in Paraguay have developed their taste, leaning towards higher-priced and better wines. This is reflected in the rise in the average price per liter from Argentina to Paraguay, having a 36% increase, going from USD 2,39 per liter in 2012 to USD 3,24 in 2013.

Peru is gradually positioning

The Peruvian market is mostly supplied by local producers that cover around 80% of the market, according to data from ‘ICEX’. This country has had a promising economic development in the last decade, pushing up the consumption of high-quality wines.

Argentina’s packaged wine exports to Peru, during the analyzed period, in the particular case of tetra-brik and bottle, revealed a decrease of 12% in value and 17% in volume.

Martin Navesi pointed out that in this destination, the winery has not grown in terms of volume, but they noticed that the firm has managed to improve little by little the sales mix, focused on their products’ quality. “Consumers are trading up to our Premium lines,” he stressed.

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