BOTTOMS UP!

Mexico 2018 | AGRICULTURE | FOCUS: WINE INDUSTRY

Increasing production and local consumption are putting Mexico on the global wine industry's radar.

Mexico is not really known as a wine-drinking or wine-producing country. However, this is changing faster than believed. The history of wine in Mexico is actually much older than some other countries that are indeed famous for their wines. In 1597, Don Lorenzo García, a native of Cohauila's Valley of Parras, traveled to Spain to request the right to plant grapevines from the king. After obtaining the rights, he founded the first vineyard of the Americas, today known as Casa Madero. This crop then spread in the 17th and 18th centuries through Jesuit missionaries to the California Peninsula, today home of many Mexican wines and boasting a Mediterranean climate.

In the 1980s, the local wine industry was thriving. However, in 1987 President de la Madrid, facing an acute foreign debt, decided to embrace free trade. When Mexico joined the General Agreement on Tariffs and Trade (GATT), most vineyards were unable to compete with foreign players and went bankrupt.

In recent years, the wine industry has come back stronger and currently enjoys its best moment. Nowadays, there are around 300 labels in the country, most of them recognized as good quality and affordable. Baja California, Coahuila, Querétaro, and Zacatecas are the top producers. The potential for further expansion is great, because of Mexico's weather and soil characteristics, but also due to booming demand.

In the 24th edition of the Brussels Concours Mondial, held in 2017, Mexican wines won 18 medals, an all-time record for the country. Four wineries were granted gold medals: Casa Madero, Baja California-based Casta de Vinos, Bodegas de Santo Tomás, and Hilo Negro.

On the consumption side, the panorama is also changing fast, especially in the cosmopolitan cities of Mexico City, Guadalajara, and Monterrey. Wine and tapas bars are popping-up in more and more neighborhoods, offering extensive and specialty wine menus. According to the Mexican Viticulture Council, consumption has skyrocketed over the past decade with a 237% increase. In 2016 alone, domestic consumption increased 10%, reaching almost 90 million liters. Yet, the national production only covers 30% of the market. In 2014, Mexico exported 1.2 million liters of wine, which sounds like a lot until you consider that the country imported 54.3 million liters.

The Mexican Viticulture Council aims to raise the share of local wines in the market to 50% in the next 10 years. For that, the area planted with grapevine used for wine will have to almost triple from 7,000ha to 20,000ha in the same period. Currently, there are 32,000ha of grapevine, but most of this is used for grape and raisin production.

Promoting the wine industry is even on the government's agenda. In late 2017, legislation that outlines concrete ways to boost the sector started moving through Mexico's Congress. First, the bill calls for the creation of a commission to promote the industry and initiate a registry of wine producers and supportive industries such as bottlers, distributors, retailers, and exporters. The law will also create a definition of what constitutes Mexican wine, much like the legal definitions of tequila and mezcal—other beverages more readily associated with Mexico. To be labeled Vino Mexicano, all the grapes must be grown within the country as well as fermentation and bottling. The government expects the price of domestic wine to drop by 17% because of these and other measures outlined in the legislation. Inversely, demand is projected to jump.

The world's eyes are turning to Mexican wine. Jean-Marie Aurand, CEO of the International Organization of Vine and Wine, an organization gathering wine producing countries, stated that Mexico is among the countries belonging to the third generation of wine producers alongside China, Brazil, and New Zealand.

Evolving consumption patterns, favorable natural conditions, government support, and renewed private investments are all aligned to make the most out of the country's wine potential.