San Juan Wine Region Looks to the Okanagan for Inspiration

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Canadians drink an awful lot of wine from Argentina, but very few of us have ever been to one of the world’s largest wine producing regions.

That’s something the federal and state governments in Argentina would like to change, and they are looking at the Okanagan Valley as a model for future growth.

I just spent a week in San Juan Province,  a wide patch of irrigated desert in the shadow of the Andes that is the second largest area for wine production in Argentina after Mendoza, it’s more famous neighbour to the south.

I visited three wineries and attended a two-day corporate wine tasting event with about three dozen wineries - or bodegas, as they are called in Argentina - and found an industry that is well funded, well organized, and turning out a terrific product.

That industry dwarfs the wine industry in BC. Argentina has planted out more than 553,000 acres with wine grapes, and about 97 per cent of that land is in Mendoza and San Juan, compared to only 10,000 acres in all of British Columbia.

The country produces more than 1.5 billion litres of wine annually, and is the 10th largest wine exporter in the world. About 10 per cent of Argentina’s exports go to Canada, and about 34 per cent to the United States.

And yet, very few people travel to this region for wine tours.

While I was trying out various wines in San Juan I also asked the winery owners whether they had facilities for tourists, and how many tourists they would expect to visit in a year. Most did not host tourists at all, and those that did were frankly not that busy.

One winemaker told me he owned likely the busiest bodega in San Juan Province in terms of tourist visits, and got about 7,000 a year.

He just about choked on his Malbec when I told him a popular winery in the Okanagan could easily get twice that number in a single week.

According to the most recent figures from the BC government, the Okanagan gets about 800,000 people doing wine tours every year, or more than 15,000 per week. Of course, the majority of those come during the spring, summer and early fall.

If you walk into Mission Hill on a sunny summer day there are so many wine tourists it can be a tough haul just to shoulder your way into the tasting bar! By contrast, I visited a great winery in San Juan called Merced del Estero, which is ranked as the sixth best attraction in San Juan.

I saw a few locals come in and buy some wine, but no tourists came to visit the winery while I was there, and this is generally true throughout the region. While the area is beautiful and in many ways similar to BC, I saw only four or five foreign tourists in San Juan during the entire week of my visit.

This outlines the huge challenge facing Argentina as it attempts to rebuild its economy after a disastrous round of hyper-inflation and repeated recessions. It is, in fact, the same challenge that faced BC and Ontario two decades ago, when the then-nascent wine industry faced competition from US winemakers after the signing of the NAFTA deal: How to build a viable wine industry based on tourist visits?

Canadians sometimes don’t give themselves enough credit, but as someone who has toured Bordeaux, Tuscany, Rioja and San Juan, I can truly say the wine industries of Ontario and BC have done a superlative job of increasing the amount of revenue earned per acre.

Unlike Argentina, which has a vast region suitable for wine production, BC has only a very tiny area, and the wine region in Ontario isn’t that much larger.

But when you look at how much money BC generates from each acre, the picture looks a lot better. According to a study by the Okanagan School of Business, in 2010 the wine industry contributed $87.3 million in direct output to the BC economy, with an indirect output of $51.8 million.

These are dated numbers, and the GDP impacts have clearly soared in the six years since those figures were recorded.

Simply put, BC generates more dollars per acre than any other wine region on earth.

People visiting the Okanagan buy wine at full price at the winery, increasing the margin on each bottle. They buy souvenirs, join tours, pay for wine tasting, eat meals, stay at hotels, buy gas, visit attractions and spend their money in a hundred different ways.

This isn’t happening in Argentina yet, so the GDP impact per bottle is much, much lower, as is the profit margin the winemaker is earning for each bottle.

While in San Juan I spoke to Alejandro Moreno, who works in Economic Development for San Juan Province. Moreno told me the province is launching new programs beginning this year to emulate the success enjoyed by regions like the Okanagan Valley, the Niagara Peninsula, and of course Napa Valley.

San Juan is a rugged and mountainous region, dominated by the Andes mountain range and the arid desert in the valley below, and like BC it has several natural attractions such as the twisted landscapes in Valle de la Luna (Valley of the Moon) or the insane people who roar around the Pampa del Leoncito on ‘wind cars’. Imagine a kid’s go kart strapped to a large sail, ripping across the desert floor at more than 60 kmh, and you get the idea.

But unlike the Okanagan, the region just doesn’t get many visitors.

Moreno says the plan now is to study other regions that are popular with tourists, particularly wine regions like the Okanagan, or the adventure tourism areas like Banff, and use similar strategies to grow the tourism industry over the next 20 years.

Moreno and his team are already working with foreign travel companies to build ‘Glamping’ (glamour camping) destination resorts, that will also package tours for wine travel, adventure travel, and for agritourism. Also like BC’s Okanagan Valley, the San Juan government wants to create ‘wine trails’ that tourists can easily follow, and to rebrand their wines and their region so that San Juan becomes better known as a wine designation.

At the moment Mendoza to the south gets virtually all of the attention from wine tourists and wine snobs alike, but the truth is that even Mendoza does not do that well at attracting foreign tourists.

While Canadian winery owners may sometimes feel small in comparison to much larger wine regions like Napa and Sonoma, Bordeaux and Provence, Tuscany and Piedmont, it’s good to know that many regions in the world consider Canadians to be best in class in the area of wine tourism.