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| April 2nd 2008 |
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| Guigal and Argento |
Much as consumers talk about Mouton-Rothschild, but buy Mouton Cadet, so too they read about Côte-Rôtie “La Mouline”, but drink Guigal’s Côtes-du-Rhône. Not a bad choice – as even Robert Parker agrees. And then there's Argento, created by Argentine winemaker Nicolas Catena, after he realised that Argentina had very little presence in the international market - and he decided to build the whole category.
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Guigal
Although the French are loath to hear it, Côtes-du-Rhone is a brand. The valley, with it 80,000 hectares of vineyard, is the second largest appellation in France, producing 420m bottles of wine each year. The lion’s share of that, some 50,000 hectares, are Côtes-du-Rhone or Côtes-du-Rhone Villages, churning out 320m bottles. Some of that is sold in supermarkets for as little as €1.99. At the higher end is Guigal’s Côtes-du-Rhône, which now sells for $12.95 on the shelf in the United States, a fancy price tag for a three million bottle label that was first introduced in the late sixties.
Although there are slightly over 6,000 estates in the Rhône valley, it is the some 100 cooperatives and 50 shippers who move most of the wine. Offshore, it is only a handful of those who have built the region’s current reputation. Albeit a latecomer, Guigal must certainly be counted among that group. Known for his single vineyard Côte-Rôtie and Hermitage, it is nonetheless the Côtes-du-Rhône that is the company’s motor – and the only wine many consumers will ever taste. Today, Guigal produces a total of six million bottles a year, half of which is Côtes-du-Rhône. That volume certainly does not stack up against the 25m bottles sold by market leader Cellier du Dauphin, but most consumers would compare, if at all, Guigal’s Côtes-du-Rhône with the Parallel 45 from Jaboulet or the Belleruche from Chapoutier. “We do not buy based on pending orders or potential sales,” says Philippe Guigal, “but only on quality. If 2008 turns out a disaster, we could sit out a vintage.” That is possible because the company has three years of stock in its cellars. “We buy only 1% of the samples submitted, preferring the freshness of the right bank reds from the Gard department.” They are also keen on Syrah, which makes up 55% of the blend.
With half of the production sold abroad, Guigal’s Côtes-du-Rhône is exported at twice the regional average. A large part of that volume goes to the United States, Canada and Great Britain, but Guigal also has a strong following in Japan. There and elsewhere, the Côtes du Rhône is pushed strongly in order to improve allocations of the highly touted wines from the La Mouline, La Landonne and La Turque vineyards in Côte-Rôtie - that Robert Parker has awarded 100 points, a total of 18 times. From that point of view, you might call Guigal’s Côtes-du-Rhône its Mouton Cadet, except that the family would probably object to that comparison.
Argento
In the marketing book Built to Last, authors Collins and Porras advise those who would create a major brand to have a “big hairy audacious goal”. The creation of Argento Malbec, by renowned Argentine winemaker Nicolas Catena was certainly audacious. The |
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brand was created in 1999 by Catena, in partnership with UK distributor
Bibendum, and launched in a smartly packaged, heavy bottle, at £4.99. It became its category leader soon after the launch. Catena’s distribution system then introduced Argento into Europe, Asia and Canada, though a since-resolved trademark dispute stopped it being exported to the US.
But using fine wine channels to distribute a mass market brand proved problematic and by 2005 Catena decided the brand should have its own company. Bibendum, were able to give the company a London office, though the wine is still made at the Bodegas Esmeralda winery in Argentina. “So it’s a small to medium sized company that sits between those two bigger companies,” says Amelia Nolan, general manager of the Argento Wine Company. She adds that Bibendum is a very good fit for the brand, because they also cover the on- as well as offtrade, plus specialists and supermarkets. What hasn’t changed is the strategy, which is where the audacious idea comes in. Catena and Argento Wine are using the brand as a way to build Argentina and Malbec. “The only way for Argentina to have cut-through right now has to be for us to focus on Malbec,” says Nolan. “Especially in a market like the UK where we are seriously small – we have about 1.5% market share.” She admits that sometimes the goal seems huge. “We are doing the heavy lifting and we are the ones spending the money to get the category up and running. That’s a lot for one brand to take on.”
Today, while the Argento brand is between 650,000 to 700,000 cases, the total volume of the company is closer to a million cases, the rest of which is bulk wine supplied to retailers. The company has a Reserva and has also recently launched Artisano di Argento, which will be listed in Majestic at £8.99. And here is how the idea works – by creating the category of ‘Argentina’, Argento stands ready to supply the resultant demand. “We are launching various other new things that don’t have any reference to Argento. We want to be a company that can supply each customer and every market with all of their needs from Argentina,” says Nolan.
And the next step is to become truly Argentine, by building an Argento winery. Nolan says they plan to “establish a stronghold in Mendoza that is really ours… to become a real part of the fabric of Mendoza.”
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