Source: Today's Financial News
By: Ronald McMahon
A new middle class in Brazil means more people are going on vacations. It also means food consumption will go up, and not just in Brazil–some reports suggest a 50% increase in global food demand by 2025.
By Ronan McMahon, Executive Director, Pathfinder International
Increased wealth and a new middle class in emerging economies (combined with population growth) means something else, too–all of a sudden, people become image conscious. Gadgets and labels are important symbols of their new buying status.
Global demand for wine is driven by these same trends. A new middle class wants to (and be seen to) drink more wine.
The Russians and the Chinese are leading the charge; demand for wine is expected to grow by 24.4% and 36.6% respectively over the next four years.
In the meantime, changing tastes and savvy marketing is driving the demand for wine in the U.S. Consumption here is growing and is expected to leapfrog France and Italy to the top of the league table by 2012.
This is good news for Argentina and the province of Mendoza in particular.
Few places on earth are suitable for quality wine production. The climate and soil need to be right, and vine cultivation and wine production expertise (ideally the experience of many generations) should be available locally.You also need a production and marketing infrastructure.
Mendoza has all of these in abundance.
Mendoza sits at the foot of the Andes 600 miles west of Buenos Aires. Soil and climate is perfect here for wine production. Argentina’s wine industry began here nearly 500 years ago.
First developed by the Spanish, the French and Italians followed a couple of hundred years later. They came with vine cuttings and expertise from their home regions. Italians brought bonarda. The French came from the Bordeaux region and brought malbec (for which Mendoza has become famous).
Today there is a third wave of pioneers setting their sights on Mendoza. They are coming from all over the globe.
The reason is simple: U.S. dollars buy 30-40 times more vineyard here than in Napa Valley.
In fact, $5,000 will buy you an acre of vineyard in Mendoza. Big label vineyards are coming… joining the small local and gringo wineries. With the bigger wineries comes wine tourism. Boutique hotels are opening up to cater for high-end wine tourists.
They call Mendoza “The next Napa.” Time will tell. Today however the real estate values here are amazing.
In the March issue of the International Living Magazine, one of the property picks is for a 12.5-acre vineyard (planted with malbec) with a house, a caretaker’s cottage, and wine making equipment…total price: $239,000.
It’s usual for small vineyards to come with a house on the property. Perfect for surveying your domain. If you prefer not to get your hands dirty, local co-ops will tend your grapes and produce your wine. All you need to do is make sure you have suitable space for storage. Maybe you’ll want to design a label to put on the bottles you give to family and friends.
Buy a little vineyard here and you might like it so much you hope Mendoza doesn’t become the next Napa.
Editor’s Note: Ronan McMahon is a regular contributor to the International Living newsletter. Find out more here.
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