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Brazil's Aurora winery marks 70 years in business
Wines & Vines / March 2001

By Larry Luxner

BENTO GONÇALVES, Brazil -- Last month [February 2001], workers at Cooperativa Vinicola Aurora Ltda. in southern Brazil celebrated the 70th anniversary of their company -- whose vineyards were planted more than a century ago by Italian immigrants.

The lush Aurora Valley, located in the southern Brazilian state of Rio Grande do Sul, still has the ingredients that lured those early grape planters: it's 600 to 900 feet above sea level, the days are sunny and the nights are cool.

Today, modern touches can be seen throughout the valley, including imported seedlings to improve quality and rockets armed with silver nitrate to minimize the danger of hailstorms. Aurora, with annual sales of $80 million, has become -- if not the best-known winery in the Southern Hemisphere -- certainly the largest.

During a recent visit to Aurora headquarters in Bento Gonçalves, a picturesque city in the mountains 75 miles north of Pôrto Alegre, hundreds of Brazilian tourists were seen waiting in line to tour Aurora's operations and learn how wine is made.

This would surprise most Americans, who think of brands like Argentina's Trapiche or Chile's Concha y Toro when they think of South American wines at all. Yet Brazil boasts over 400 wineries, virtually all of them in the southern state of Rio Grande do Sul, near the Uruguayan border.

Until recently, however, the nation's fine wines were unknown in the exterior because few people thought to develop the wine image outside Brazil.

"The Brazilian wine industry has grown a lot in the last few years, not only in production but also in quality," says Julio César Corradi, an Uruguayan enologist who has lived in Brazil since 1984. "That has put it in an ideal condition to export. The consumption of wine per-capita in Brazil is growing year by year, creating a very interesting market."

Corradi, interviewed over lunch at a popular churrascuría down the road from the Aurora winery, says Brazil has several production advantages over Uruguay.

"The quality of red wines in Uruguay is better because of the climate. At the time grapes mature in Brazil, it rains a lot. This doesn't let grapes mature to the full extent. White grapes aren't affected by this, because it's not necessary that the grape achieves full maturity, But I think Brazil produces better white wine than Uruguay," says Corradi, whose family came over from Bergamo, Italy, in 1910.

"It's the truth," he says. "I prefer to make red wines in Uruguay, and whites in Brazil, particularly Chardonnay and Sauvignon Blanc, which are very aromatic. In some years in Uruguay, the white grape produces wines of very low acidity, producing wines without much aroma, even though the taste is the same."

Another advantage is the cost of production, which in Brazil is considerably lower than in either Uruguay or Argentina.

By all accounts, the Brazilian wine industry took root in 1875, the year large-scale Italian immigration to southern Brazil began. On Feb. 14, 1931, sixteen families -- finding the soil and climate conditions similar to northern Italy -- joined to form the Aurora wine cooperative. In fact, a company-produced video proudly says "the positive spirit of the Italian colony is the heart and soul of Aurora."

The company began exporting to the United States in 1973 with 20,000 cases of Sangue de Boi jug wine a year, mainly for the Portuguese ethnic community in New Bedford, Mass., according to former Aurora executive Mark Rudolph. In 1985, Marcus James -- a decidedly un-Brazilian brand name -- was born through the combination of Marcus (the given name on Rudolph's birth certificate) and James (one of the sons of joint-venture partner Michael Tye, president of United Liquors of Boston).

"If they had given it a Brazilian name, the wine would have sat in a corner," joked Valter A. Neis, Tasca's predecessor. From 1988 to 1998, the brand was marketed in the United States by Canandaigua Wine Co. of Canandaigua, N.Y.

But that deal eventually fell apart, said Aurora's export manager, Clario J. Tasca.

"The agreement with Canandaigua to export Marcus James wines to the U.S. had to be revised in 1998, when we completed 10 years," Tasca told Wines & Vines. "In 1997, our red wine stocks were very low and and we were hoping to increase export quantities. Due to this controversy, the agreement was cancelled. From 1998 on, Canandaigua began to import red wine from Argentina."

Tasca said that in 1998, Aurora sold one million 9-liter cases in the domestic market, with Marcus James becoming the main brand in Brazil. Its total production came to 1.8 million cases.

"The lack in stocks is being supplied temporarily from Uruguay, and our member growers are increasing red wine production supported by our agronomic department, which is importing root stocks from Italy and South Africa," he said. "Our present policy is to pay attention specifically to the domestic market. Export markets will be sought once our fine wine stock level exceeds domestic demand."

Last year, Aurora bought 200,000 cases of wine from Uruguay, says Corradi, while it exported $2.5 million worth of fine wines, table wines and coolers; its main export markets were Paraguay, Argentina, Finland, Germany and Japan.

Today, over 1,300 area families sell their entire production -- around 50 million to 65 million kilograms of grapes a year -- to Aurora for processing into table wines, fine wines for export, grape juice and frozen concentrate. The winery has 13 separate units covering 110,000 square meters, with an annual production capacity of 85 million liters. White wines are fermented in temperature-controlled, stainless-steel tanks, while reds are aged in oak barrels imported from Kentucky, Tennessee and France.

Aurora's four bottling lines, representing a $3 million investment, were manufactured by a company Corradi represents: Cavagnino & Gatti SpA of Italy.

In addition to the winery itself, Aurora maintains two vineyards in Rio Grande do Sul: Bento Gonçalves and Bom Principio. A third, in northeastern Brazil's San Francisco Valley, no longer belongs to Aurora.

In Brazil itself, Aurora is the dominant brand, with 27% of the 350-million-liter domestic market for fine wines. In second place is Seagram's (Meson Forestier and Almaden), and in third place is Cooperativa Garibaldi. Unlike Argentina, where the average person guzzles 40 liters a year, Brazilians aren't big wine drinkers. Per-capita consumption here is only 1.5 liters -- far less than that for either beer or cachaça, a powerful, often homemade drink made from rum and sugar cane.

Corradi, who resides in the town of Flores da Cunha, says that compares to Uruguay's per-capita consumption of 17 liters of wine. But he points out that Brazil has nearly 180 million people, meaning that even with much lower per-capita consumption, the market for wine is still twice as big as Uruguay, which has only three million people.

Aurora currently has 10 labels on the market: Aurora Reserva Chardonnay, Aurora Reserva Gewurztraminer, Aurora Reserva Cabernet Sauvignon, Marcus James Sparking Wine Brut, Marcus James Sparkling Wine Demi-Sec, Ratzkeller Late Harvest White Wine, Aurora Cabernet Sauvignon, Aurora Chardonnay, Marcus James Pinotage and Clos des Nobles Cabernet Franc.

Aurora also leads in other categories, enjoying 32% of the market for table wines, 17% of the market for table wines in large bottles, 13% of the sparkling-wine market, 49% of the market for coolers, and 27% of the grape juice market.

Foreign wine brands have a negligible presence in Brazil. In 1996, the Brazilian government approved strict legislation that established procedures for registering foreign wineries with the Ministry of Agriculture as a condition for exporting to Brazil.

Under Directive 255, potential wine exporters must complete a questionnaire, provide a description of the winery's installations and equipment, identify its local representative and show proof of official recognition -- in the country of origin -- of the winery's legal existence.

The directive calls for an on-site review of the winery to verify that sanitary, technical and documentary conditions are in order, with the site review taking place within six months of the Agriculture Ministry's registration of the winery. Some well-known wineries are exempt from this detailed registration procedure; these are chosen by a commission made up jointly of wine industry representatives and Agriculture Ministry officials.

"There is a similar site review requirement for foreign meat, dairy and seafood establishments wishing to export products to Brazil, with the travel costs of the Brazilian officials conducting the review generally paid by the exporter or the importer," reports the U.S. Embassy in Brasília. "Such trips can be of such a high cost that smaller wineries may be dissuaded from seeking registration, unless the on-site review costs can be shared with other wineries and several of them be included in the same trip."

Recently, Brazil's National Bank for Economic and Social Development (BNDES) loaned $28 million to the wine industry of Rio Grande do Sul to finance wine exports.

According to the industry association UVIBRA (União Brasileira de Viticultura), Rio Grande do Sul exports 12 million bottles of fine wine, six million tons of grape-juice concentrates and 15 million liters of ordinary wine per year. While most of Brazil's fine wine is exported by Aurora, ordinary table wine wine is trucked mainly to Paraguay and the grape-juice concentrates end up in Europe, Asia and the United States.

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