Days of wine and profits: vineyards come of age with offerings at the high end of the spectrum and a variety to rival the wine regions of France and California

Latin CEO: Executive Strategies for the Americas, June, 2001 by Luis Zalamea

TWO KINDS OF PEOPLE WRITE ABOUT WINE: expert critics and plain lovers of wine. I belong to the latter. The former, purist and often pedantic, enjoy dropping names in their descriptions like acidity, countertaste, tannic content, tarse and piquancy -- words that belong in enological treatises. I prefer to describe wine poetically: coquettish or cavalier, solemn or cryptic, rambunctious or charismatic. Anything that its bouquet, color and taste might unleash in my imagination through palate, eye or nose. We empiricals usually come to love wine through our cult of food in a shared and mutually fulfilling ritual. And of course there is wine's erotic role, as instigator and accomplice in the battles of love. As Casanova said: "Women who do not enjoy the pleasures of the table cannot partake of the joys of the boudoir." He could, of course, have also said it about men. And both sexes are quite capable of falling in love with a wine with the same obsession and fidelity that is unleashed by human passions.

Wine has comforted and cheered humanity for thousands of years. In the 16th century, when the Spanish and Portuguese settled in the New World, they brought the cuttings and seedlings of their best wine grapes along with age-old winemaking methods. But nature did not cooperate everywhere. In the vast tropical regions of what is today Latin America, they did not find the right balance of soil, temperature, rainfall and humidity for growing wine grapes. At best, they reaped only passable table grapes.

But there were placid valleys in the foothills of the Andes where fine grapes thrived and created a prosperous wine industry. Prom colonial times in Chile, and since the 19th century in Argentina and Uruguay the wines of Latin America have been quietly flourishing. Nature was equally generous in isolated pockets in Baja California and the flat, elevated mesas of northwest Mexico, in the southern highlands of Brazil and along the arid Pacific coast of Peru. In these oases, limited wine production developed, but mostly for local consumption, and never in the same league as Chile and Argentina.

While a large part of Latin America -- especially in the tropical belt -- remains faithful to beer and rum, the Spanish and Portuguese love of wine is still deeply embedded in the culture. And it has been awakened through savvy marketing efforts by Chile and Argentina, nowadays impelled by globalization, integration and the revolution in communications technology.

"Over the last decade, Latin America's economy has progressed to the point that, overall, wine consumption has increased substantially" says investment banker and enologist Jose R. Garrigo. There is a serious lack of statistics to support this statement, but Garrigo often travels the region. Hopefully not too far in the future lies the day when Latin Americans from all walks of life may enjoy wine, in keeping with the words of Chile's Nobel Prize-winner poet Pablo Neruda.

Chile: Pioneer and Savior

IN THE HISTORY OF LATIN American enology Chile not only plays the role of pioneer, but also of savior of wine on a global scale. During the 19th century, when mildew and phylloxera devastated most of the world's vineyards, Chile's distant and isolated geographic position, flanked by the Andes and the Pacific, saved its grapes from the scourge. In the aftermath, Chile generously supplied healthy vinestocks to Europe and elsewhere while plague-resistent vines were developed.

Having saved wine for the world, Chile was ready to tend to its own vineyards. At the time, there were some 30,000 spread through the long, thin country, but most were less than three acres in size. More enterprising winemakers expanded their estates and bought fermented grape juice (called must) from small farmers. These pioneers started to export on a small scale. Soon brand names like Concha y Toro, San Pedro, Santa Carolina, Macul, Undurraga and a few others became household words outside of Chile.

During the 1950s, the wine industry was still fairly simple. Chile produced the lightest dry whites to go with its fabulous seafood, and Argentina's full-bodied and rustic reds were ideal for the world's choicest beefsteaks. Tenacious and shrewd, the Chileans founded trade associations and technical schools to improve winemaking, lobby government and promote exports through intelligent, cost-efficient marketing. By 1990, exports totaled 43 million US liters, worth US$52 million. Since then, exports increased dramatically to 240 million liters and US$600 million in 2000. Profits have been methodically reinvested to further develop the industry In the meantime, domestic wine consumption increased in the '80s to the highest levels in local history around 30 US liters per capita per year. It slowly declined to 13 liters in 1997. A year later it recouped to 18 liters and now continues upward.

Successful exports have not only meant growing profits for Chilean wineries, but diversification as well. During the last few years, a series of boutique wineries have sprouted and are producing rare fine wines in small quantities, much in demand in the world's most discriminating markets. In two recent prestigious contests in Paris and Rome, seven gold medals and 33 silver medals were awarded to boutique brands such as Casa Silva, vinedos Terranoble and Viu Manent, known only to importers and connoisseurs.