Once Marginal Terroirs Take Argentina’s Wines to New Heights

BY STEPHEN TANZER | SEPTEMBER 05, 2019

Having tasted with a number of top Argentine producers in May and June in New York in the course of sampling about a thousand new releases from Argentina, I can tell you that they were buoyed by the high quality of the 2019 harvest following a coolish though dry growing season and a relaxed harvest. But since then, the shockingly weak performance of Argentina’s President Mauricio Macri in a primary election on August 11 has thrown yet another curveball at the constantly beleaguered Argentine wine industry, so 2019 will probably be remembered more for its economic and political jolts than for its favorable weather conditions. The mood in Argentina was grimmer as I finished my annual tastings of new releases in late-August.

A 100+-year-old vineyard planted with pre-phylloxera Malbec at Colomé Estate in Salta

Once Again, Argentina’s Economic Future Is Murky

I wrote at length last year about the economic challenges facing wine producers in Argentina. But the local wine industry - and the country in general - faced a larger shock just a few weeks ago, when Argentina’s center-right President Mauricio Macri, a former civil engineer who also briefly attended the Columbia Business School and Wharton, and who has introduced numerous market-friendly policies since taking office in late 2015, was unexpectedly swamped in a primary election. This presages a defeat in the upcoming presidential election in October and a possible return to the old interventionist policies of his populist predecessor Cristina Fernández de Kirchner, who is technically running as vice president on a ticket led by Alberto Fernández. On the surface, it appears that much of Argentina’s population has grown tired of waiting for Macri’s policies to bear fruit, as they are still dealing with recession, austerity and extremely high inflation, which had reached an annual rate of over 50% by July.

The most recent devaluation of Argentina’s peso of virtually 33% against the U.S. dollar in the three business days following the primary election triggered yet another increase in inflation estimates for the rest of 2019. (The peso has stabilized, at least for the time being, between 55 and 60 to the dollar – compared to 20.5 when I spent two weeks in Argentina in April of 2018, just over a year ago!) This incremental inflation will only deepen Argentina’s current recession and cause further declines in domestic wine consumption. Costs will go up, producers will raise prices, and consumers will drink less – a vicious circle. Wine prices had already increased in the local market in the past 18 months due to short crops in 2016 and 2017.

The short-term effects on the wine industry – and the domestic economy in general – will be confusion and paralysis. The sharp devaluation of the Argentina peso that followed the primary election will result in salary adjustments, which in turn threaten to paralyze the economy. For wineries, it will push up production costs. And that’s not even accounting for short-term disruptions to the marketplace: with suppliers of such dry goods as bottles and corks reluctant to sell until the exchange rate settles down, only buyers willing to pay in U.S. dollars or Euros will be able to purchase what they need, but then these wineries would get no positive effects of the devaluation.

It will also be a difficult time for growers who sell grapes to domestic producers, and this poses a longer-term threat to Argentine wine as a whole, as some vineyards that produce bulk wine will no longer be economically viable. In fact, it’s already a problem, as growers received their first payments for the 2019 grapes in July, based on prices that had been established in March. After devaluations in April and August, the value to them of these payments has declined considerably.

In contrast, Argentine producers that are oriented toward export markets should benefit from at least a short-term boost in their margins – an exchange rate windfall – as they are paid in U.S. dollars or Euros, and these currencies will now go farther in Argentina. But eventually, the producers will have to pay the same higher prices for imported dry goods. And of course, whether they export or not, they will all have to deal with continuing political and economic uncertainty. Export-oriented wineries seeking to remain competitive in important international markets have already struggled for years; in many instances they have essentially held their prices steady (in U.S. dollars or in Euros) for a long time. The pressures on them will only continue to increase.

Just as important, it will become more difficult than ever for wineries to make medium- and longer-term business decisions, such as purchasing vineyards, expanding wineries and so on, as their likely future costs and sales margins become harder to predict. And, of course, nothing will be certain until the Presidential elections in late October, and even then the ultimate fate of Argentina’s large debt obligations may still be unclear. In late August, Argentina’s government declared a selective default, which further clouds the situation.

The view from the outdoor tasting room at Doña Paula in Luján de Cuyo

The Good News Is That Wine Quality Is Soaring

It has been said that Argentina is a country where if you leave for a week, everything changes, but if you leave and come back 30 years later, everything is the same. While that maxim may describe the nation’s politics and economy, it definitely does not describe its wine industry or the quality of its wines. On the contrary: quality is higher than ever in Argentina and the country’s wines – and most-prized vineyards – have little resemblance to those of a generation ago. Recent successful vintages have only added impetus to the rise in quality.

Moreover, a greater number of wines with distinct place character are being made in Argentina than ever before, and not just expensive bottles. Thanks in part to a string of recent vintages in which the grapes could ripen at reasonable levels of potential alcohol, without a rush to pick due to vine maladies or threatening late-summer and early autumn weather, I found more worthy, vibrant white wines this year than ever. And of course, many new whites are coming from high-altitude, calcium carbonate-rich sites that produce mineral-tinged grapes with good acid retention. Torrontés is still the Argentine white wine most likely to be found in export markets – even if it’s normally better suited for gulping than for pondering – but I also tasted a lot more good, vibrant Chardonnays this year, including some relatively inexpensive ones (under $20) that compare favorably on the international stage. I saw more excellent white blends as well, and a stunning new set of Pinot Noirs (from Domaine Nico) that leaves me newly confident about the longer-term potential of high, chalky sites in the Uco Valley for this finicky variety.

Of course Argentina’s red wines are fresher than ever, with more moderate levels of alcohol and better natural acidity. Many top producers are cutting back on new oak and making greater use of stainless steel tanks as well as concrete cubes and eggs for vinifying and raising their wines. They are carrying out less extractive vinifications, often with a percentage of whole clusters. And they are picking more precisely by soil type and microclimate, even within single vineyards, aided by smaller tanks specially designed to handle smaller-lot vinifications.

I found a higher percentage of outstanding 90-point wines this year than ever before. Perhaps of greater importance, there were more 95-pointers too – extraordinary wines that in their density, complexity, flavor definition, energy and site specificity can be tasted alongside top reds from around the world. Now we’re talking! At the other end of the spectrum, inexpensive everyday drinking wines are under pressure as domestic demand declines. Clearly, the future of Argentine wine, certainly on the international stage, is in the premium category.

Concrete eggs at the Zuccardi winery in Paraje Altamira

Recent Vintages Have Been Better in Argentina

It’s harder than ever to generalize about growing season conditions in Mendoza, a region that still accounts for 70% of vineyard acreage in Argentina—particularly owing to increased plantings in cooler, higher-elevation sites that not long ago were considered marginal at best for viticulture. Sites in the province of Mendoza range from Winkler I (more than cool enough to grow bracing Pinot Noir, for example) to Winkler V, in lower, flatter areas on the eastern side of Mendoza. These latter sites are located far from the cooling effect of the mountains, and are normally best suited for mass-produced hot-country wines that are of limited interest to discerning international wine drinkers.

The whole of Argentina’s wine lands stretch from Jujuy in the extreme northwestern part of the country to the new emerging region of Chubut in southern Patagonia. In latitudinal range that’s greater than the distance between Santa Barbara, California and Kelowna, British Columbia, in the center of the Okanagan Valley region. The generally lower latitudes (i.e., closer to the equator) of wine-growing in Argentina (from about 24 to 45 degrees south, vs. 34 to 50 degrees north in North America) are mitigated by higher altitude and greater thermal amplitude.

Following a difficult period from 2014 through 2016, including two cool, wet years in 2015 and 2016, Argentina is now enjoying a string of very good growing seasons. The harvest of 2019 may turn out to be the best of them, as the season was benign and long, on the cool side and dry, with smallish berries leading to moderate yields. The growing season began with a cool spring, and cool flowering weather reduced ultimate crop loads. January and February were dry and sunny, even featuring some heat waves in the northern half of Mendoza, with sugar levels rising well. Many growers assumed that the hot periods in January would allow the grapes to partly catch up following the late flowering, but cool conditions in March and April slowed down the ripening process. Atypically, daily maximum and minimum temperatures in Uco Valley were often a bit higher than in Luján de Cuyo, with the result that some Luján de Cuyo fruit came in after some Uco Valley grapes. But growers were mostly able to pick at their leisure as the grape skins were healthy. The typically high skin-to-juice ratio of the grapes should result in concentrated wines, and natural acidity levels were higher than average owing to the mostly cool growing season and to the recent trend toward earlier harvesting.

Total degree days during the 2019 growing season were the lowest since 2016 virtually everywhere in Mendoza, While some high pHs required adjustments, 2019 is normally a year with sound acidity, good sugar levels and solid concentration. The weather was conducive to producing fresh white wines with aromatic intensity and sound acid balance. But in some instances, red winemakers had to be careful not to overextract during the vinification, as the fruit normally began with a good concentration of tannins.

Vines at Miraluna in northern Calchaqui Valley, at an altitude of 8,000 feet

In Patagonia, the early spring of ‘19 was damp and cool but the summer was a good one, with some brief heat spikes in January and February. The Uco Valley was wetter than average in November and December, then drier and cooler than average from December through March. As frost was not an issue in ’19, overall production was slightly higher than average—and considerably higher than that of the past three years. In Cafayate in Salta, 2019 was a good dry year with a sunny harvest. Temperatures were mostly average, with rainfall sparse except in February. The harvest was dry and cool.

The 2018 growing season was mostly dry and sunny, with pronounced thermal amplitude. In the Uco Valley, maximum daytime temperatures were higher than average virtually from October through April, although average daily temperatures were normal and nighttime lows were average to slightly lower than average, which helped to preserve acidity. Temperatures were generally average in the central and eastern parts of Mendoza, somewhat cooler than average in Salta, and warmer than normal in parts of San Juan. Monthly rainfall totals were lower than average throughout Mendoza, with the exception of December, and most winemaking regions in Argentina enjoyed dry weather in March and April that allowed them to harvest grapes with healthy skins.

Some high-altitude sites, particularly on the western side of Uco Valley, had yields cut sharply by frost in mid-October (a rare late-March frost also affected parts of Uco Valley and caused some producers to pick earlier than ideal) but overall production was more or less normal and better than anticipated, which was very good news for the industry after the short crops the previous two vintages. The young 2018 reds generally show good natural acidity, clear vineyard expression and smooth tannins, while the whites are aromatic, brisk and mostly medium-bodied, not far off in style from the ‘17s. Salta also had a good year, with a healthy, slightly larger than average crop level, as this region mostly escaped spring frost. In fact, through much of the region, temperatures in December, January and February were actually lower than the recent historical norm. Crop levels were reduced somewhat in many sites in Patagonia due to frost losses in both spring and fall but the fruit ripened well. The heat of summer here was early and compressed.

Two thousand seventeen was the second straight year with low yields – by most accounts, the second lowest to 2016 in the last 20 years – owing to spring frost that was particularly hard on Malbec, and on the Uco Valley in general. (There were also frost losses in Patagonia but Salta was mostly spared.) Higher rainfall than average during early summer reduced the need for irrigation, but rainy spells were generally followed by cool, breezy days that dried out the vines and prevented maladies. The second half of the summer was mild, with conditions remaining dry through January and February (with the exception of more rainfall in central Mendoza), and some parts of Uco Valley required irrigation during the driest spells in January and February to avoid a blockage of maturity. The 2017 harvest took place about two weeks earlier than usual, with daytime high temperatures – but not nighttime lows – lightly higher than average into March in Uco Valley. March cooled off and rains arrived at the end of that month and in April but most of the fruit was in by then. Several growers reported that their grapes were rich in tannins, requiring relatively general extraction during vinification to make rounder, better-balanced wines.

Temperatures in San Juan, which is Argentina’s second-largest producing province with just over 21% of total vineyard acreage, were considerably lower than average through the entire 2017 growing season, with rainfall virtually nonexistent from the beginning of January through the harvest. Meanwhile, yields were better in Salta and the harvest was much earlier than usual, thanks in part to very favorable sunny, dry conditions in January, which sent sugar levels higher. But in some spots the hot weather resulted in a blockage of maturity and growers actually harvested later than in Mendoza. In Patagonia, spring frost sharply reduced ultimate vine yields and the veraison was drawn out by cool weather, ultimately keeping grape sugars moderate.

The Casa de Uco in Tunuyán, combining a luxury resort with more than 70 hectares of vines

It’s Hard to Ignore the Supremacy of Uco Valley

I believe that consumers – and the producers themselves – who have had a chance to taste the most successful 2016s from Uco Valley have gotten a new appreciation of what kind of quality and style can be achieved in Argentina in very cool years in favored sites. If this set of wines has stimulated the salivary glands of tasters both within Argentina and abroad, will this experience make consumers less willing to purchase overripe, cooked wines in the future?

That appears to be what many producers are banking on, as they continue to seek out and plant new and ever-higher sites in the Uco Valley, not to mention in other distinctive microclimates around the country that were previously considered to be too cool for viticulture. Some producers have been quite forthright in saying that they are already in the process of shifting their bases of operation (or at least their prime vineyard sources) from Mendoza’s so-called First Growing Region (Primera Zona), the traditional heart of Argentina’s wine industry where quality wines were first produced on a large scale – an area not far south, southeast and southwest from the city of Mendoza that includes Luján de Cuyo and western Maipú – to Uco Valley sites that are as much as 75 miles south of Mendoza. They are captivated if not obsessed by the ability of cooler sites to grow grapes that, through slower and steadier maturation, reach full phenolic ripeness before sugar levels skyrocket and acidity levels plunge. Even in the vintages following 2016, many producers have been able to make lower-octane, more easily digestible wines in a more European style from Uco Valley fruit, and fewer labels than ever before are admitting to 15% alcohol.

An ancient Criolla vine at Colomé

A Passing of the Glass…

This will be my last annual report on Argentina’s wines, as I will be handing over responsibility for coverage of Argentina to Joaquín Hidalgo, a widely respected and gifted taster and one of the few successful fully independent wine journalists in Argentina. I originally met Joaquín in Buenos Aires in 2006, where we were both judges helping to select Argentina’s best wines for the Club del Vino’s first Argentine wine guide. I have been following Joaquín’s career ever since then. For several years he was a taster and editor for the Austral Spectator South American wine guide, covering Chile as well as Argentina before the guide decided to limit its coverage to Argentina. Joaquín established his own (Spanish-language) website, vinomanos.com and since 2015 has published a weekly wine column in the daily newspaper La Nación. I became reacquainted with Joaquín in Mendoza on my tour there in April of 2018. In late May and early June of this year I tasted about 400 wines with Joaquín in a series of group tastings in New York. I am happy to report that our assessments of wine quality – and the characteristics we look for the wines we taste – have been consistently in sync for a long time. I can’t think of anyone better qualified to cover Argentina’s wines for Vinous.

Joaquín will be able to provide far more comprehensive coverage than I’ve been able to do, through regular visits to all of Argentina’s important wine regions and their leading wineries. He will accomplish this objective by publishing several articles on Argentina each year, including features on white wines and special reports on up-and-coming stars in addition to a major annual report on new releases.  Joaquín will also cover Chile for Vinous, with his first report on these wines due this winter. In the meantime, readers can get an early taste of Joaquín’s writing by referring to his essay on the recent move in Argentina toward the establishment of meaningful closely defined appellations based on terroir rather than political boundaries. 

And finally, I would like to thank everyone I have met over the years who has helped me organize my tastings and has played a role in the growth of Argentina’s wine industry-winery owners, winemakers, consulting enologists, vineyard managers and countless professionals who work behind the scenes. I have no doubt that the best is yet to come.

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