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Small Uruguayan wineries making their mark
Wines & Vines / June 2001

By Larry Luxner

"In a world of big factory wines," says Daniel Pisano, "our business is to keep wine as close to earth and man as possible."

And that's exactly what Pisano is doing. He's one of the best-known winemen in Uruguay -- a small South American country that's been producing wines for over a century, but which only recently began making inroads into the export market.

In the last 18 years, Uruguay has seen its exports jump, from 60,000 bottles in 1982 to over two million bottles in 2000. In value terms, those two million bottles were worth $3.3 million -- still a drop in the bucket compared to neighboring Argentina or Brazil, but a significant amount for a country of only 3.2 million people.

Major markets for Uruguayan wines are now Brazil, Great Britain, France, Belgium and the United States.

"Uruguay started emerging strongly into the world wine market in the 1990s," says INAVI, a Montevideo-based wine institute whose nine-member council consists of six private-sector officials and three government appointees. "The introduction of new vine strains in the 1980s, in addition to more open markets, has led to the production of top-quality fine wines and enabled the development of an incipient flow of exports to destinations that have traditionally been considered connoisseur markets. The undeniable success of this transformation is made manifest by the numerous awards obtained in international winetasting events."

In 2001, Uruguayan-owned wineries will export $3.5 million worth of fine wines, says Edgardo J. Etcheverry, president of the Asociación de Bodegas Exportadores de Uruguay (Uruguayan Wine Exporters Association). In addition, a Brazilian company, Industrias Cooperativa Vinicola Aurora Ltda., buys several million dollars worth of bulk and bottled wines from here, because, Etcheverry explains, "they've found that Uruguayan wines, due to their characteristics, have adapted well to Brazil."

In total, annual Uruguayan wine exports amount to three million liters worth around $8 million, says Etcheverry.

He and Pisano were among 20 or so industry officials interviewed by Wines & Vines during a recent press trip to Uruguay that included visits to half a dozen wineries. The trip focused on this Spanish-speaking nation's efforts to improve its reputation as a New World wine-exporting country on par with Argentina, Chile, Australia, New Zealand and South Africa.

"Uruguay is going through a process of reconversion, eliminating vineyards that are good only for production of table wine," Etcheverry said. "This began at the end of 1980. The intense change for medium to small-scale growers happened in the '90s, helped heavily by a subsidy from the government. So now each year those new vineyards are coming into production, and that's why the volume is growing. We now have the potential to export not less than seven or eight million bottles a year."

Adds Etcheverry, whose organization has 21 member companies representing 75% of all Uruguayan wine exports: "One of the most appropriate markets for Uruguayan wines are people who, in my opinion, have big purchasing power. I think the snobbish nature of such consumers will drive them to new products. It'll be a novelty for them. The main difference is that they'll see Uruguay as a new winegrowing region, with a variety that none of the other New World exporters have, namely Tannat." (Tannat also is known as Moustrou and Bordeleza Blecha, according to A Practical Ampelography, translated by Lucie Morton.)

According to local sources, the Tannat was first introduced to Uruguay in 1870 by Basque immigrants. It quickly became the "national grape," with production eventually surpassing all other countries including France, where it was born. The Tannat -- currently the dominant variety here -- is to Uruguay what Malbec is to Argentina, producing very colorful and powerful wines, with tender but very present tannins which allow them to keep for a long time.

Says Pisano: "The Tannat is the antithesis of the so-called international varieties which have been planted in all cornders of the planet to respond to a global demand of stereotyped taste."

Etcheverry agrees. "The fact that we're an unknown country is interesting for consumers who want to discover new things, but it also means a lot of work and research to find the right importers to supply those kinds of consumers," he says. "The first thing potential importers ask is, where's Uruguay? Then you have to explain to them why we can make fine wines. Then we have to get them to taste the wines and convince them that our wines are competitive on the world market. But it's difficult to offer competitive prices because the supply is so short."

The main reason Uruguay never focused much on exports is that it didn't have to, until recently. Even today, the country's internal market is sizeable, at 95 million liters. Although per-capita consumption has been declining, the average still drinks 33 liters a year -- not as high as Argentina, but higher than either Brazil or Chile.

Over half of Uruguayan wine production comes from the department of Canelones -- just north of Montevideo, capital of the nation and home to nearly half its population. This zone, located 35º south of the Equator, is the oldest and best fit for the production of wine. The climate is temperate, similar to that of the Mediterranean regions in southern Europe. The annual average temperature is 16.6º C., and seasons are clearly distinct, with hot summers and cold winters with abundant frost. The ripening of grapes is favored by a high temperature variation between night and daytime, thanks to the influence of the ocean and the wind coming in from the sea at night.

One of Uruguay's oldest wine producers is Santa Rosa, whose founder planted the country's first vineyard, in 1860. The company was officially established in 1898, and by 1924 reached annual production of 120,000 liters. According to commercial manager Daniel Mutio, Santa Rosa today employs 25 people and has 120 hectares (one hectare equals 2.47 acres) under cultivation, but only exports 2% of its total production.

Nevertheless, it has a very high reputation in the industry.

"Santa Rosa is the Budweiser of Uruguay," says Guzmán Castro, sales director of Miami-based International Bonded Export Service Corp., which imports Uruguayan goods. "Way before anybody was producing decent wine in Uruguay, Santa Rosa was making wine that was halfway drinkable."

Reinaldo de Lucca is an enologist in El Colorado, a town in Canelones. Now 49 years old, he studied plant physiology at Penn State University and got a doctorate in grape culture from Montpelier, France. His company produces 200,000 bottles of fine wine annually, and began exporting three years ago.

"In Uruguay, each plant belongs not only to the same variety but to the same clone. Each clone has its own particularity," says De Lucca, explaining that the clones were selected in Burgundy, and that he uses American rootstock.

"If my grandfather were alive today, he wouldn't like the way we've changed the vineyard," he said, taking visitors on a tour of his fields. "But we think the best way of avoiding insects and disease is by planting wheat. We plant barley and oats in the wintertime to protect the soil from erosion. We don't need to use insecticides in our vineyards, which is an advantage, considering the need of our consumers nowadays. We used to use some chemical fertilizers years ago, but no more. Now we use organic fertilizer like chicken manure."

De Lucca says he's figured out that new isn't necessarily better.

"We are convinced that when you have equilibrium in your ecosystem, you will get better quality," he says. "Everything is in the berries. If your berries are of high quality, you have the chance to make good wine. We learned from our fathers and grandfathers. After World War II, many people started to promote herbicides and new chemicals and fertilizers. And everybody was willing to change. But very rapidly, we realized this wasn't the right path, so we switched back to the way we used to cultivate grapes."

In Salto, 500 kilometers north of Montevideo, Héctor Stagnari oversees a 15-hectare vineyard established by his predecessors, who emigrated to Uruguay from Ancona, Italy, in the late 19th century.

"The winery was established in 1921, and I'm a fifth-generation vintner," says Stagnari, 40, who became an enologist at the age of 18 and worked in the vineyards of Châteaux. "We have very limited production. We have very high-quality grapes, so we don't buy grapes from outside sources. We export half our production, mainly to Germany, the United States, Great Britain, Belgium and Canada."

Another leading Uruguayan producer, Ariano Hnos S.A., was founded in 1929 by Italian immigrants Adelio and Amilcar Ariano. Half of the company's grapes come from a 70-hectare farm in Constancia, a small town in the department of Paysandú, aboaut 380 kilometers north of Montevideo. The other half comes from a 40-hectare tract in El Colorado in the department of Canelones.

"In the Paysandú area, the climate is temperate, with clearly defined seasons," says a company brochure. "Average annual rainfall is 1,218 millimeters, and climatic conditions are very favorable for the production of top-quality grapes, with excellent alcoholic graduation. The grape-ripening process ends in February, when the light is intense, there's less humidity, days are longer and the harvested grapes have a good color and aroma."

In Canelones, 60% of Ariano's wine containers are made of cement epoxy, with stainless-steel doors, and the other 40% with fiberglass. The company, whose capacity in Canelones is 2.8 million liters, recently purchased new oak wine casks of 250 liters for reds such as Tannat and Cabernet Sauvignon.

The harvest generally begins around Jan. 30 and ends betwen April 5 and April 8. Average annual grape production is 1.5 million kg., which results in 400,000 liters of fine wine. That wine sells in the local market for around $2.20 a bottle, which table wine is worth only 70 to 80 cents locally. Ariano employs 45 people and has annual sales of around $1.2 million. Its U.S. agents are Montevideo Importers Inc. of New York and Uruguay Imports Ltd. of Baltimore.

Down the road from Ariano's Canelones winery is Bodega Vudu. The name has nothing to do with voodoo the religion, but is rather a Spanish acronym for Viticultures Unidos del Uruguay. Vudu has been around since 1888, with the Varela family taking over the business in 1933.

"My grandfather and his brothers got some farmers together to form a cooperative to combat the oligarchy of large wineries," said current owner Enrique Varela. "Their association was successful in making the government pass a law that fixed minimum prices for grapes in order to defend the farmers' interests."

Over the last 15 years, the family has invested around $2 million in the winery, which now covers 110 hectares. Most of Vudu's production is sold in Uruguay, says Varela, adding that in Uruguay, land for wine cultivation costs $1,500 to $2,000 per hectare, compared to $10,000 to $15,000 in Mendoza, Argentina, and $50,000 in Chile.

Pisano, who prefers to think in bunches of berries per plant instead of kilograms per hectare, says "each plant is an individual and must be treated that way in order to produce the high-quality grapes we require."

His planting system is the traditional espalier, with density ranging from 4,000 to 5,000 plants per hectare. A space of one meter separates plants in each row, and Pisano allows 2.0 to 2.5 meters of space between rows, depending on soil type and variety, clone and rootstock vigor. Pisano says he searches for balanced vines that produce two to three kilograms per plant.

"We never made any concessions in terms of quality, and while many wineries grew by acquiring big tanks and vats to fill them with poor grapes to compete in the low-priced wine market, my father César stubbornly planted low-producing Tannats that gave strong wines but less money," recalled Pisano. "Everybody said he was crazy not to plant high-yielding varieties, but he knew his best investment was to teach his children to be proud of the wines he produced. I felt that way when, as a child of five or six, he used to take me along to sell the wines, and people said he had the best wines in Uruguay. But few people knew them, and since then, I've felt committed to make our wines known and to try to always improve their quality."

Pisano says all his vineyards are non-irrigated, and that he uses neither insecticides nor residual herbicides (though he does apply mineral fungicides as needed).

"We use no chemical fertilizers, only organic compost when planting a new vineyard and we have a clover planting between rows for fixing nitrogen from the air," he says. "We keep the natural grass cover until the end of spring rains in order to extract excess water, and later on during the season we mow the vegetation and disk the soil in the summer. Three to four times during the growing season, we take away excess leaves from the bunches for better exposure of the grapes. We remove excess crop when needed, and clean up late-flowering bunches that would not be completely ripe at harvest time."

Pisano, whose 16-member extended family lives in various houses scattered throughout the vineyards, is typical of Uruguay's 300 or so small-scale, traditional vintners who primarily sell to the domestic market.

"Our children grow up playing among the rows of vines," he said. "They already know the names and can distinguish among different varieties at the age of five."

Establecimiento Juanicó also might have stayed small, if not for smart marketing and some incredibly good luck.

Once unheard of, Juanicó today accounts for 40% of the country's wine exports. In 2000, it shipped 700,000 bottles overseas, an amount equivalent to half its production.

"Juanicó is the biggest exporter," says company president and CEO Fernando Deicas, who began distributing local wines by bicycle at the age of 12 in Montevideo's Carrasco neighborhood. "We have competitively priced wine and more expensive ones, ranging from third-party labels like Marks & Spencer, which sells for $1.50 a bottle FOB, to Preludio, which costs $20 a bottle."

The company dates back to 1755, but since then, the land has been owned by different people. Don Francisco Juanicó, a Minorcan immigrant who purchased the land in 1830, built an underground cave allowing the elaboration of high-quality wines. After the establishment of the railroad in 1872, the area turned toward dairy activities, and also to fruit cultures and the production of wine.

By 1885, some 50,000 grapevines had been planted, and some of the stone buildings built during that period are still in use today by the company. In the early 1900s, the estate was bought by the Seré family, which established the so-called Cortijo Ensayo, designed to make European-style wines under the Latour Saint George brand. In 1946, the premises were purchased by state entity ANCAP, which planted grapevines from Charente, France, to produce brandy. Finally, in 1979, Establecimiento Juanicó bought the business from ANCAP and five years later planted virus-free, clone-selected varieties.

In December 1992, the word Juanicó was registered as a geographic origin indication under Directive EEC No. 3650/92 of the European Union.

Juanicó's property totals 600 hectares, the vineyard taking up about a third of this. High-density plantations of Juanicó's own French-origin grapes produce controlled harvest volumes of around 120 quintales (one quintal equals 100 kg) per hectare. The company says it manages its vineyard "with state-of-the-art technology and intensive manual work -- conduction, pruning and harvesting -- to select the best-quality grapes."

The vineyard employs 45 people (and another 120 during the height of the season). Its 2000 harvest came to 4 million kilograms, utilizing intensive pruning techniques and other manual work to select the best grapes.

"Due to a severe drought, 2000 has been our best harvest ever," said export manager Christian Wylie. "Our wines are being well-received on the international market right away, and very young wines are getting good listings."

Wylie, who was export manager at Santa Ines in Chile before relocating to Uruguay a year ago, said he's expanding the portfolio of countries Juanicó exports to from 12 to 16. This should boost annual exports to over 2 million bottles by 2003.

The winery, which employs 15 workers, has a capacity of 4.7 million liters (stainless-steel and epoxied concrete). Its processed grape production in 1999 came to 3.85 million kilograms (half from Juanicó's own vineyards, half from other growers), resulting in 1999 wine production of 3.5 million liters. That fell to 3.01 million liters in 2000.

White varieties produced by Juanicó include Chardonnay, Sémillon, Sauvignon blanc, Viognier, Gewürztraminer, Riesling, Chenin blanc, Colombard, Ugni blanc and Muscat de Frontignan. Red varieties include Merlot, Cabernet Sauvignon, Cabernet france, Petit Verdot, Pinot noir and Tannat.

Establecimiento Juanicó recently signed a $1 million joint venture with French distributor William Pitters. The 50-50 venture, known as William Pitters Uruguay S.A., consists of 40 hectares planted mainly with Tannat and lesser quantities of Merlot and Cabernet franc.

William Pitters is the largest distributors of foreign wines in France, in addition to being the biggest producer of Bordeaux wine. It currently buys around 100,000 bottles a year from Juanicó and sells them in large supermarket chains such as Carrefour and Casino Géant, according to Olivier Richaud, the company's international director of development.

"For the past five years, we are importing wines from Uruguay into the French market and other countries where we've seen a significant increase in volume. This project represents a wonderful opportunity to position Juanicó's products as the No. 1 Uruguayan wine in France," said Richaud, who met with Uruguayan President Jorge Batlle in November to discuss the venture.

In 1999, the company signed a distribution deal with Seaboard Brokers in New York. Through Seaboard, it distributes in the New York-New Jersey area with Charmer and Fedway. It's also begun exporting to Argentina, a trend no doubt helped along by Uruguay's participation in Mercosur, a regional trading bloc whose founding and associate members now include Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay.

Deicas is now busy on his latest project: encouraging tourism. He's overseeing a $6 million project to convert an abandoned mansion into a country hotel. Every Saturday, buses bring cruise-ship passengers and hotel guests to the winery from Montevideo and Punta del Este. Yet the main focus of his activities is promoting the export of Tannat wines.

"Tannat lets us offer something distinct to the world, a wine with its own personality," says Deicas. "It's very important in an age where people are tired of the same varieties and the same tastes."

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