As a young woman, it was Laura Catena’s job to pour her family’s wines at the Wine Spectator’s New York Wine Experience. “We were the first winery in South America to be invited,” she says.
Her father, Nicolas Catena, asked her to represent Catena Zapata, mostly because he thought her clear English would be an asset.
Catena says she “sat in this little booth” and watched as crowds lined up to taste Californian, French and Italian wines, while ignoring her.
How things have changed. Catena Zapata in Mendoza is now one of the world’s most admired wineries, whose flagship wines are distributed through the prestigious La Place de Bordeaux. And they have achieved all this while navigating the choppy waters of Argentina’s erratic economy.
At a time when many other wineries are facing economic headwinds, it’s worth considering how Catena Zapata did it.
Always diversify and raise prices when necessary
Catena says that when she was young and idealistic, she thought it was wrong to focus on money.
Now, she thinks differently. “If you want to help people, you need money,” she says. “If you want to make better wine, you need money. If you want to keep the vintages in the winery, you need money.”
One of the first management decisions she made was to hire an auditor to give her financial training. “He literally taught me how to look at profit and loss, and to understand how all the accounting worked.”
Argentina has suffered from high inflation since the 1980s debt crisis; at the end of 2023, the inflation rate was a whopping 211.4%. This also means the exchange rate is unpredictable.
Catena says she’s lucky, because her father Nicolas Catena, did a PhD in economics and specialised in exchange rates. “I’m like, ‘should we switch to invoicing in dollars or euros?’ And he always says what other finance people do: you don’t know what’s going to happen, so diversify your risk. That’s why we have some people being invoiced in euros, some in dollars and some in pesos.”
As for inflation, Catena is sanguine. She says they calculate and recalculate costs all the time, so they know exactly where they are financially, and they keep their money either in the vineyards, or in accounts receivable. “The way we do business so as not to be at risk is basically to invest everything. Your business grows and you have no credit.”
She knows that people who have little experience of inflation have been shocked by the post-Covid inflationary environment, and have dealt with it by absorbing the higher costs. But what Argentina’s continuous inflation crisis has taught her, she says, is that “you have to raise your prices.”
Stay bullish on China
There was a period where Catena considered China “a lost cause” and that she couldn’t build it while also servicing existing markets. “It takes a lot of time to go to China,” she says.
She saw that not only did the French dominate the wine shelves, but that China was also making its own wines — so she assumed they would stop drinking imports one day.
But she says one employee completely believed in China, plus “I saw what Chile was doing,” though she acknowledged they had the benefit of a Free Trade Agreement.
“So I started reading a lot and interviewing people,” and realised that although China can and does make good wine, it would struggle at the fine wine end, because their wine regions either suffer from too much rain, or too much cold weather. “That allowed me to realise there was an opportunity for what we can provide in terms of value. The question I always ask is: can I provide a product that’s twice as good as the competition?”
Today, she says she’s optimistic about the Chinese market, even though her sales fell in the pandemic.
“We’re not back to 2019, but we’ve been growing this past year,” she says. “I think China will come back.”
Aim to be the best
Catena says she never gets into any enterprise unless she’s confident they can be number one in the category.
“It’s less expensive to run a business where you’re number one, or people think you’re the number one, because people will listen to you.”
Communicate loudly and often
A search through Nexis, the database that tracks news sites, reveals that Catena and/or her winery have had more than 10,000 media mentions in the past two years.
That’s the kind of media exposure that no amount of marketing can buy.
Catena says she takes every opportunity to tell stories, both to consumers and to the media. “When people buy wine, like when they buy art, it’s because it says something they care about. So when people are buying wine, they want to hear about the farming, and about what you’re doing with the environment.”
She adds that whenever she’s obsessed about something, she will tell journalists about it.
“Sometimes I think it’s the coolest thing ever and I started telling journalists, and they don’t care. I try five people, and if none of them are interested, it probably means it’s not that interesting.” But more often than not, they are interested.
Get broadband in the vineyards
Wine regions everywhere are facing an ever-growing shortage of labour, and Argentina is no exception. Catena says that young people want to move to the city, “so the only thing I can do is show them how great this life is — that it might be better than the one in the city.”
But it’s difficult to get people to commit to living in rural areas, even when offered a quality house.
“You think most people would say ‘oh my God, you’re going to pay me and give me a house! I’ll take the house!”
But workers weren’t attracted, even when offered seeds, water and the right to have chickens and other animals if they wanted them. “They didn’t care about any of that,” she says.
What everybody wanted was the internet — partly because spouses and children refuse to move anywhere that doesn’t have WiFi.
“The internet tends to be really bad in the countryside and in many of these places was basically non-existent and very expensive,” she says
So, “I paid the money to have better internet and now we are having a much easier time getting people,” says Catena. “They have access to education, and they have access to really good entertainment.” Catena says she’s learned that people won’t live in the countryside if it disconnects them from the world. “The single best thing I did was pay for really good internet.”
Use a good booking system
While tourism provides much-needed income to many wineries, at some point, excess visitors can become a problem.
Catena says that Argentine wineries are now experiencing a boom in tourists from across Latin America, particularly from Brazil, as Brazil’s currency is relatively strong.
“Mendoza is considered a very sophisticated place with a lot of luxury,” she says. “The wines are good, the food is good, the hospitality is good.”
But as more and more Brazilians planned their holidays around visiting Catena Zapata, it became difficult to accommodate all the requests.
“Before the pandemic, it was horrible,” she says. “We had somebody answering every email, and sometimes they would answer it late and we would get some bad reviews. We were doing hospitality the way restaurant reservations were done ten years ago.”
But the pandemic gave the winery some breathing space to overhaul their systems. Today, the booking system is completely online, and visitors can see what the openings are and book for themselves.
Catena says Mendoza also benefits from having tourism agencies that take care of bookings. “Seventy percent of wine tourism is done through agencies. They’re very good and they don’t charge much. You can say to them, ‘I want to go and visit five wineries and they’ll arrange something wonderful’.”
Remember, everything goes in cycles
According to the OIV, red wines have been losing their share of the wine market for the past decade — which would normally be bad news for red wine regions like Mendoza.
Catena says to remember the move away from red wine isn’t happening everywhere. “I think there’s more talk about it than is actually happening in sales,” she says. “The US is still very much a red wine market. Latin America is still red wine.”
In any case, she says Catena Zapata has white wine in its DNA. “Until the 1990s — from 1902 to 1990 — we were predominantly white wine and rosé producers. Our first wine that was successful in the US was our Chardonnay,” she says.
Catena’s latest project is making a rosé from forgotten grape varieties like Criollas, “the native grapes — basically the ones that came with the Jesuits and interbred.”
She says every time she tells her father about her new projects, “he goes into this room where he has all the old labels,” and pulls out an old label from a wine that is exactly the same as whatever Catena is working on. “We’re actually reviving some of those labels. I think this is a cyclical thing that’s been happening forever.”
