Blends’ – the name chosen by Alejandro Bulgheroni and Carlos Pulenta for their business – is more than a reference to winemaking technique. Blends combines wine estates from different countries – Argentina, the US, Uruguay and Italy, with more to follow – and its corporate philosophy mingles two potentially contradictory concepts: a global approach to doing business with wines that aim to retain a distinctive sense of place; and, through its founders, it mixes the highly contrasting worlds of wine and oil.
Bulgheroni, Blends chairman and the company’s chief investor, is a veteran of oil and gas exploration projects through Bridas, the company established by his father. Pulenta made his name as the driving force behind a number of high-profile Argentinian wineries, including Peñaflor, Trapiche, Salentein and, most recently, Vistalba. The trinity heading up the new business is completed by Alberto Antonini, ex-winemaker with Frescobaldi and Antinori, a Tuscan winemaking consultant with extensive international experience, particularly in Argentina.
Provenance
Over the past few years, they have built up a portfolio of premium wine businesses, starting with Pulenta’s Mendoza-based Vistalba and adding Bulgheroni start-up Garzón in Uruguay; Renwood Winery in Amador County, California; Dievole in Tuscany; and Argento, the best-selling Argentinian wine brand in Europe over the past decade.
For Pulenta, Blends is about reconciling quality and quantity, alongside provenance. “I thought it would be interesting to try to find out where in the world are the best regions where we can produce good wines. To go out to those regions – it might be Tuscany, Bordeaux, Napa – where we can produce wines that still tell the story of where they are from,” he says.
Bulgheroni’s cash and Pulenta’s vision are the twin driving forces of Blends, but in establishing a multi-national wine company with ‘quality’ as its stated aim, they are hardly breaking the mould. Many other businesses have tried to do precisely the same thing, so what makes Blends different from its rivals?
“What makes us different from other companies is that we can produce wines in all the most important wine regions of the world and find in each region the best expression of the grapes, the perfect terroir for each grape variety, without modifying the condition of the land,” says Gustavo Crespo, MD of Blends in Europe, Canada and Asia. For example, Zinfandel in Amador County, with Renwood; Sangiovese in Chianti Classico with Dievole; Tannat and Albariño in Uruguay with Bodega Garzón; Malbec in Mendoza with Argento and Bodega Vistalba.
Each wine estate is independent in production terms, with the central Blends operation acting as the company’s commercial division, conducting all back-office functions within three regional divisions: Blends Asia, Canada & Europe, based in London; Blends US, based in the Napa Valley; and Blends South America, based in Mendoza. There’s a quarterly meeting between the three, and they all report to the Blends board, based in Buenos Aires.
Further acquisitions are planned – Pulenta mentions Napa, Bordeaux and the northern Rhône as potential targets – but Blends is simultaneously aiming to organise its collective route to market through a detailed review of international distribution, set for completion by the end of 2013.
Leading with Argento
The acquisition of the Argento brand from UK importer Bibendum in September 2012 has been key, thanks to its distribution network. Originally a joint venture between leading Argentina producer Catena and Bibendum (Catena later exited the business), Argento has grown to become the best-selling Argentinian wine brand in Europe over the past decade, and is particularly strong in the UK, Benelux, Switzerland and Canada.
“In some locations, Argento brings a lot [in distribution terms], and in some, not a lot,” says Crespo. One glaring exception is Germany, an acknowledged weakness for the business. “We want that to change,” admits Crespo.
Blends claims not to be philosophically wedded to any particular distribution model, but wants to use whatever works best in each market. For instance, the wineries have four distributors in Sweden, but Crespo isn’t sure that’s a bad thing. “We need to see the potential of these importers and whether we want to consolidate in one importer, or split and keep things as they are,” he says. “It’s a big, big task.”
Meanwhile, there are advanced plans to improve distribution in Russia and Eastern Europe, where Argento is present, but not strong, and the other wineries absent altogether. All five Blends wineries are about to be launched in Norway through Altia Group-owned Premium Wines, while Garzón debuts in Benelux in October with on-trade partner Ad Bibendum, already has a listing with the Finnish monopoly, and will be handled in the UK by Bibendum.
And Asia? “That’s the big challenge,” acknowledges Crespo. Blends has a new representative based in Shanghai, but is taking a slow and steady approach to China, mapping the regions with main importers and distributors before approaching and appointing them. Crespo reckons they might need five or six companies covering all the brands, as well as working through regional wholesalers to reach second-tier cities. While emerging markets are a focus, Pulenta doesn’t yet view them as crucial. “The best is to have solid distribution in a good wine-drinking country like the UK,” he argues.
Mature markets are, however, notoriously competitive. In an effort to meet this challenge, Blends has a warehouse in Belgium, which enables Argento and a couple of other tactical brands from Argentina to be shipped to Europe in bulk, as well as allowing customers to order mixed containers. This is seen as a potential boon for niche wineries such as Garzón, meaning that clients don’t have to take the risk of committing themselves to an entire shipment of untested Uruguayan Tannat or Albariño.
If Argento offers Blends potentially game-changing routes to market in several countries, Pulenta says the brand also stands to benefit from its new owner. “Argento is already established and helps us with the distribution of the other brands,” he admits. “But the big, big change for Argento will come in the production.”
Previously a ‘homeless’ brand with no estate or winery to call its own, Argento now has a 7m-L production facility, plus 280 ha of new Mendoza vineyards planted in 2010, plus another 25 ha down the road at Altamira, focused on Malbec.
Experiment in Uruguay
Among the other Blends brands, most of the wineries have obvious trump cards – Malbec at Vistalba, Zinfandel at Renwood, Chianti Classico at Dievole – but the obvious exception is Uruguay’s Garzón. Where the others are established names, Garzón, with 180 ha of freshly planted vineyards and a winery due to open in 2014, is a brand new venture in a brand new winemaking area, also called Garzón. “The [Uruguayan] wine business is in Montevideo, but we didn’t like it,” says Pulenta. “But this is a place 15 km from the ocean. It’s Tuscany in the lie of the land, but the conditions are Galicia. That’s the reason we decided to produce Albariño there.”
Unlike in Mendoza, where the locally evolved, clonally distinct take on Malbec has been a success, Antonini is unimpressed with Uruguayan Tannat, preferring to source his clonal material from Madiran in France instead. “I normally prefer to work with local clones because they have been fine-tuned by the local environment,” he says. “But that’s not so in Uruguay.”
If Garzón is the exception to the Blends rule in terms of winemaking philosophy, that’s also true in terms of consumer profile, in that Uruguay still represents a very small niche. But Pulenta is hopeful that Garzón’s location will help here – it’s close to the busy resort of Punta del Este, described as ‘the St-Tropez of South America’ and a holiday hotspot for the growing numbers of well-heeled consumers from Brazil and Argentina. Wine tourism will be developed alongside the “booming” local wine market, he says.
Alongside yet-to-be-announced future acquisitions, Blends will also seek to develop two further projects: in Montalcino and in Chubut, Argentinian Patagonia. A series of acquisitions has left Blends with the Podere Brizio estate in Montalcino, plus a total of 40 ha of vineyards, 25 ha of them eligible for Brunello production. Plans include extending the Podere Brizio winery, as well as possibly building another facility at its other Montalcino estate, Poggio Landi. The venture will be run from Dievole.
Chubut, like Garzón, was a discovery of Bulgheroni’s, indicating that the oil tycoon is more than just the money man of Blends. “He has lots of production in the south and he knows this region better than his home,” says Pulenta of the Chubut project. “The oil people are curious and they always want to go where noone else does. The wine and the oil business are both long-term businesses, you know. Some people who invest in the wine business, they want the return on investment in two days. Then they go crazy and they get out of the business.
“If you decide to make a wine in Chubut, it could be 10 years before you have the wine. And with oil, until you really have it pumping, it’s seven or eight years.”
Oil and water famously don’t mix, but oil and wine? Maybe they’re not so different after all...
Blends at a glance
- A collection of premium wineries: Argento and Vistalba in Argentina; Garzón in Uruguay; Renwood in California; Dievole in Italy
- Founded and funded by Alejandro Bulgheroni, Argentinian oil entrepreneur; with Carlos Pulenta, Argentinian wine executive; and Italian winemaker Alberto Antonini
- Offices in Napa, London and Mendoza, and warehousing in Belgium
- Argento: Acquired in September 2012; estimated global sales of 500,000 cases; now has own vineyards and a 7m L winery (with plans to expand to 10m L)
- Dievole: Acquired in November 2012, one of the oldest and largest (80 ha) estates in Chianti Classico; plans to cut number of wines produced, concentrating on Chianti Classico, Riserva and single vineyard
- Bodega Garzón: New venture 18 km from the Atlantic; focus on Albariño and Tannat; new winery set for 2014 harvest; plans to develop wine tourism
- Renwood Winery: Established in 1993 in Amador County and acquired in 2011; Zinfandel specialist using dry-farmed vines up to 100 years old
- Bodega Vistalba: High-end wine project set up by Pulenta in 2003 in Lujan de Cuyo, Mendoza, with a range of premium blends focused on Malbec; key markets of the US, Canada, Belgium and the UK
- Blends has also acquired a winery and 40 ha of vineyards in Montalcino; experimental vineyard established in Chubut, Argentinian Patagonia
