Expat in Argentina looking to enter the wine business as an exporter seeks info

Greetings,

I’m a long time American expat, but new to Argentina. I’d like to somehow get into the wine business through some form of export. I’m a wine drinker, but know very little about the business other than what I’ve been researching. I’m looking for advice, thoughts, opinions, general ideas, references to web sites, companies, specific people, etc. I’ll describe some basics and try to be obvious when I’m stating an opinion that’s more of a gut feeling than anything arrived at by research. Apologies if this is a bit lengthy, but I generally find when seeking advice that the more details one gives, the better quality of responses one gets.

My brother-in-law, a Peruvian expat who has been living in Argentina for at least 15 years, is in the process of setting up a company to export beer to Peru and the US, and is planning to export private label (using his family name) wine as well to both Peru and the US. He has made connections with a winery located in the Pedernal Valley section of San Juan Province with more than 1.100 hectares of vineyards planted throughout the different valleys of the area. They already export to the US under their various labels. He and I have just started talking about all of this, so I’m not sure if he’s looking for me to help him with his venture, but so far has offered me the use of his company/contacts here. His plan, as far as I know at this point, is to have a friend in Miami (w/o wine specific experience) handle things on the US end and believes that by focusing on a few select geographic areas he can do well. I don’t know enough to have a valid opinion, but I do know he’s successfully run his alpaca clothing business since he was a teenager in the 1990’s and has a good head for business. He’s very confident that he can do well. I’m not sure how aware he is of the US laws re: selling/distributing alcohol, the three-tier system, etc. The Malbec he showed me that he plans on distributing is around a US $10/bottle (retail) option when sold under the wineries brand, though the winery has a wide variety of wines where I’m seeing US retail prices of $40 and $60 for their higher end wines that range from high 80’s to 94 points. Vivino.com says they have 216 wines, so I’d assume there are private label options other than the $10/bottle Malbec, but that’s just an assumption.

My two past successful business ventures had two things in common. First was that I was either partners in the same company where I focused on production while the other partner focused on retail, and the other sole-proprietor business where I only focused on sales while I relied on (sole-proprietor) friends who supplied me with their products. The other thing in common was that we weren’t the biggest players in the market, but focused on quality, which in both cases allowed us to create a successful niche for customers who were looking for high quality and something different that stood out from the rest. I enjoy working with others to bounce ideas off of and divide responsibilities and so far am not really enjoying my latest small venture as I have to wear all of the hats.

I could be completely off, but knowing that there already exists wineries who are exporting their products, and distributors who have existing relationships with these wineries, it might be best to think of working a more specific niche and perhaps not focus on getting bottles into retail shops. My idea when I arrived was to focus on providing private label solutions for restaurants/hotels looking to have a house brand. I’m aware there are established companies already providing this service as well. I’ve also considered that I don’t know anyone personally in the US who is in the wine business or in a position where they could travel from city to city in search of clients.

One of my first assumptions is that on the US end of things it would probably be best to partner with/utilize the services of a distribution company as opposed to trying to put one together. Established experts who know the business, would be ready from day one, and could advise me on what type of wine/region they feel would work best in this situation. This dovetails with my preference to work with others and divide responsibilities allowing me to focus solely on what’s to be done on this end. My brother-in-law has his contact, but the Mendoza region and North to Salta is day’s drive and I’m sure if there are better options they’d be worth exploring.

One of my other initial thoughts was to find a winery that while large enough to handle sustainable demand, currently is more focused on domestic distribution; creating an opportunity to have a somewhat more exclusive product in foreign markets. I have also come across someone (on an online mentoring website) from Buenos Aires who has sales and marketing experience with a large winery and now runs a business selling wine online direct to consumers from smaller wineries whose wines may not be available in Argentine supermarkets. Another thought is that it would be best to focus more on higher priced wines since shipping costs per case are the same no matter the quality of what’s in the bottle, but I’ve read how the profit margin can be lower on higher priced wines, so again, it’s just a general thought. Another question, though more general business than wine specific, is whether it’s possible to avoid the much higher taxes and general business regulations of Argentina by establishing an American based import company as opposed to an Argentine export company.

Thanks for making it this far, hope I’m barking up the right tree, and thanks for any responses.

Paul Hobbes (or maybe it was the person who runs Laurel Glen? can’t precisely remember) had a podcast somewhere where he discussed the complexities of doing business in South America. At one point he was making wine down there as a side project and sending it up here and selling it at the lower shelf price points.

If you want a generic primer on Argentine wine, Laura Catena’s book is ok

https://www.wineberserkers.com/forum/viewtopic.php?p=3307590#p3307590

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If you are getting advice from ‘online mentors’ and WB, be careful of getting scammed.

I have no special knowledge about Argentinian exports but I wonder if this organization might help in some way. https://www.winesofargentina.org/en/about-us/wofa/. As someone living in Argentina, you are aware of the economic instability that has plagued the country for as long as I can remember. The recent resignation of Martin Guzmán has exacerbated the problems.

I wish you good luck. I do have a few ideas of producers in Argentina and Uruguay whose wines I would like to see in the U.S. Dr. Madaiah Revana, sole proprietor of Revana in Napa, Alexana in Newberg, OR, and also owner of Corazon del Sol in Medoza might have someone that you can contact if that is appropriate. They are exporting CdS to the U.S. and it is stocked in and distributed from their Alexana winery in Oregon I believe.

What problem are you trying to solve? Then work backwards.
Sales is hard, very hard. Knowing where your first buck is coming from before you do anything is a powerful advantage.
Find the buyer(s) first.

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