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Uruguay beginning to make some waves in the wine world
Impact International / August 1, 1998

By Larry Luxner

MONTEVIDEO -- When a connoisseur mentions South American wine, consumers think of Argentina, Chile or Brazil -- rarely Uruguay.

Fernando Deicas, president of Establecimiento Juanicó, would like to change that.

His company recently signed a joint venture with French distributors William Pitters and announced it would invest $1 million to buy land to boost production of a little-known variety called Tannat Merlot.

Introduced to South America's smallest Spanish-speaking nation in 1870 by Don Pascual Harriague, the variety adapted beautifully to Uruguay's local climate. Today, Uruguayan production of Tannat Merlot has surpassed that of its counterpart in France.

"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."

Establecimiento Juanicó was one of several Uruguayan wineries participating in a mid-May trade show in Miami. The three-day event, entitled "Why Uruguay?" was aimed at luring U.S. investment to South America's smallest Spanish-speaking nation.

"Uruguay started emerging strongly into the world wine market in the 1990s," says INAVI, a Montevideo-based winecultivation institute established in 1987. "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."

In the last 15 years, Uruguay has seen its exports jump, from 60,000 bottles in 1982 to over a million bottles in 1997. In value terms, exports are now worth over $2 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 wine are now the United Kingdom, Belgium, France and Holland. Says INAVI: "The undeniable success of this transformation is made manifest by the numerous awards obtained in international wine-tasting events."

Juanicó is one of eight wineries in Uruguay that export (though over 300 smaller ones produce strictly for the domestic market). Yet the company accounts for nearly half the country's wine exports. Last year, it shipped 480,000 liters overseas -- 45% of the 1.065 million liters exported.

Still, Uruguay's domestic market is sizeable, at 95 million liters. Although per-capita consumption has been declining, the average uruguayo still drinks 35 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 -- where Juanicó has its winery.

"Juanicó is the biggest exporter," says 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 sell 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. 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 in turn sold it in 1946 to Uruguayan state company ANCAP (Administración Nacional de Combustibles, Alcohol y Portland). ANCAP planted grapevines from Charente, France, in an effort to produce brandy; some of those fields are still active in that production.

In 1979, the Deicas family purchased 100% of the stock of Establecimiento Juanicó from ANCAP. Since 1984, the company has been importing virus-free, clone-selected varieties from France.

According to a company brochure, "southern Uruguay, located 35° 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 16.6° 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. The vineyards, planted on soft slopes with shallow argillaceous soils, yield well-balanced crops which result in moderately alcoholic and highly scented wines."

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

The company's main red varieties are Merlot, Cabernet Sauvignon, Pinot Noire and Tannat. Its main white varieties are Chardonnay, Sauvignon Blanc, Gewürztraminer, Riesling, Chenin, French Colombard, Muscat de Frontignan and Viognier. Its 1997 harvest came to 2.5 million kilograms, utilizing intensive pruning techniques and other manual work to select the best grapes.

The company is on the verge of signing a distribution deal with a U.S. importer, though Deicas declined to say which one. 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.

Asked why his country's wine industry is suddenly taking off now after lying dormant for so many years, Deicas has this to say:

"The economic opening of the country has caused wine growers to think about competing internationally. Before, the industry was protected, and wineries had poor genetic quality and antiquated technology. But Uruguay always had adequate soil and climate for optimal production. Our wines are comparable to those of Argentina and Chile, and superior to those of Brazil."

At present, Juanicó owns 600 hectares in two main plantations, and employs six full-time enologists among its 50 permanent workers.

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