Casa Valduga - A Sparkling Star from Brazil
(Meininger's Wine Business International - December 2009 Edition)
Joao Valduga is in front of 11 foreign journalists presenting an elite selection of Casa Valduga wines. He is, in every sense, standing right behind these sparkling and still offerings, all produced in the heart of Brazil's most distinguished wine region, the Vale dos Vinhedos (Valley of the Vines), nestled in the Serra Gaucha mountain range in the far south of the country. As the tasting unfolds and the group of mainly Europe-based journalists sniff, sip, gargle and spit their way through the winery's eight best examples, Joao, the winery's director of enology, remains on foot, pacing back and forth and scanning every face for telltale signs of approval, insight, frustration or disappointment. True to his enthusiastic yet focused manner, he requests or more so demands comments - good, bad or ugly - on every wine, and although communication is at times difficult, with Joao understanding some English but speaking little and the majority of the journalists not familiar with the Brazilian Portuguese of the region, the general consensus in the room soon becomes clear: there are some serious wines here and Casa Valduga is a serious winery.
This is no small thing for a Brazilian producer, particularly one without any foreign involvement; Casa Valduga remains 100% family-owned and, not counting some of their premium winery technology imported from Italy, has relied purely on its own resources and expertise throughout the winery's history (unlike a number of Brazil's other top wine producers, which have in recent decades opened their doors to significant foreign investment and influence).
The Casa Valduga story began when the Valduga family made the move to Brazil in 1875, direct from the town of Rovereto in the Italian provence of Trento, as part of a strong wave of immigration from the north of Italy to Brazil's south at the end of the 19th century. Overall, between 1875 and 1900 more than one million Italians moved to Brazil's southern states, which are now home to over 25 million Italian-Brazilians, the largest number of full or partial Italian descendents outside of Italy.
Amongst the first Italian families to arrive in the region, the Valdugas helped settle the area that is now the Vale dos Vinhedos, which had not previously been inhabited, and they also planted some of the valley's first vineyards, albeit with non-noble vine stock that has long since been replaced. Nowadays, there are 31 wineries spread amongst the valley's 82 square kilometres, with around 2,100 hectares of vineyards, 42 hectares of which are owned by Casa Valduga.
In terms of location and conditions, although the valley is certainly not the most naturally advantageous wine region in the world, it is definitely one of the best spots in Brazil, with the hilly, winding topography offering a range of interesting sites and microclimates. The region is in Brazil's southern-most state, Rio Grande do Sul, on the 29th parallel south, 120 kilometers north of Porto Alegre, the state capital, and around 450km from the Uruguayan border. Vineyard sites are at an altitude of between 450-650 metres, while the climate is mild, subtropical and damp, with some frost in colder years, although the threat of hailstorms during summer is a bigger issue.
Notwithstanding these challenges, the Vale dos Vinhedos has developed into a worthy wine region and this was recognised in 2001 when it achieved Brazil's first and only protected Geographical Indication. In keeping with its pioneering history, Casa Valduga played a central role in the successful movement, and is also a key figure in an ongoing push to go one step further and attain a DOC for the valley, once further development and improvement of valley vineyards and winemaking facilities has reached the required levels.
It is perhaps this proactive position that says most about Casa Valduga's philosophy and plans for the future, both in Brazil and on the world stage. The winery is currently run by brothers Erielson, Juarez and João Valduga, all of whom work hard not only to develop the credentials of Casa Valduga, but also those of the Brazilian wine industry as a whole. Amongst other things, Juarez was the first president of the Association of Fine Wine Producers from the Vale dos Vinhedos (APROVALE), an umbrella body formed in 1995 with the aim of creating a spot for the valley on Brazil's rather crowded tourism map. Joao, on the other hand, has been very active in the Institute of Brazilian Wines' promotional program Wines from Brazil, which aims to forge an identity for national wines both domestically and in key export markets.
Despite this outward focus, Casa Valduga recognises that its own vineyards and winemaking facilities are of paramount importance. The winery currently produces 1.1 million litres of wine per year, split 50/50 between sparkling and still. On top of the 42 hectares of vineyards in the Vale dos Vinhedos, Casa Valduga also has 132 hectares in the Encruzilhada do Sul region, about 200km south-west of the valley.
Although not common in Brazil, where over 70% of all production is cheap table wine made from non-noble Vitis Labrusca grapes, all of Casa Valduga's vines are Vitis Vinifera, with the winery squarely focused on the production of fine wines. Furthermore, following a major conversion project in 2000, all vines are now from imported and certificated stock and receive refined cultivation techniques, productivity control and selective harvesting. An example of this commitment to quality fruit was displayed in 2008 when the company imported R$400 thousand (US$ 235 thousand) worth of merlot clones from France.
In terms of the Casa Valduga winery and production facility, significant investment in technology and equipment in recent years has resulted in one of the most modern of its type in South America, including what was Brazil's first enotourism complex. Called Villa Valduga, the complex includes a bed & breakfast style hotel, a thematic garden, wine education facilities and two of the region's best restaurants and was further upgraded over the last two years at a cost of over R$ 1 million (US$ 585 thousand). The complex currently receives around 70,000 visitors annually from the 150,000 that visit the valley, both relatively low numbers that the winery hopes to address over the coming years with more national media coverage and promotions.
Added to this, in 2003 Casa Valduga created a new non-wine business called Casa de Madeira, based just one kilometre from the main winery, producing natural fruit juice and preserves. Initial results have been very promising, with 100% annual growth, albeit from a small base.
As for the wines, Casa Valduga has an extensive range incorporating a number of price brackets and brands, including a series of special editions that are made only in exceptional years; the latter evidence of Casa Valduga's pursuit of excellence when possible and belief that its vineyards can produce top quality fruit, while also acknowledging the growing regions' limitations in terms of consistency.
At this top end there are the Grand Reserve and Premium lines, while in recent years Casa Valduga has also developed a unique range of wines called Mundus, which are elaborated from grapes grown in Argentine and Chilean vineyards. At the lower end there are the Duetto (various blends, each of two varieties), Arte and Naturelle ranges. The winery also has two rosés marketed separately under the Amante Rosé line, a special varietals range called Identidade (Identity) that allows buyers to customise the bottle labels, a new category of kosher wines aimed at Brazil's Jewish community, as well as brandy, grappa and liqueur offerings.
Despite this comprehensive selection encompassing a wide assortment of styles and varieties, it is ultimately Casa Valduga's sparkling wine that is the backbone of the brand, in terms of quality, consumer recognition and sales. The winery prides itself on devoting special care to its 'espumantes' and this has resulted in a number of critically-acclaimed wines that have won over 100 medals and trophies at key events around the world. Casa Valduga has also been very successful in promoting this devotion to sparkling wines and their ensuing quality, plus the fact that it was one of the first Brazilian wineries to develop and use the champenoise method, and is now recognised as one of the, if not the leading Brazilian sparkling wine brands.
The winery is planning even bigger things for the future, aiming to take advantage of a booming domestic market: sales of national sparkling wines have been growing at over 20% per year since 2007, while imported equivalents are on the decrease. Illustrating this investment in the future is the winery's sparkling wine cellar, an impressive chamber over 150 metres long located under the main production and bottling facilities. With a capacity for 6 million bottles, it is currently only around 25% full (this varies depending on when lines are released - the top end remains for up to 72 months), but Casa Valduga's rather ambitious expectation, particularly in a country not yet fully switched on to wine drinking, is to reach full capacity in around 10 years.
Part of the strategy to reach this goal was unveiled in 2008 when Casa Valduga established a new company called Domno. In a move aimed at expanding the company's selection in it's traditionally strongest category, while also safeguarding the name and image of its existing methode champenoise-produced selection, Domno has been created to produce wines made exclusively by the "charmat" method. The business, which is being run by Joao, was established with a R$10 million (US$5.8m) investment, including the purchase of a former facility of Pernod Ricard's Domecq brand in Brazil.
Performance wise, Casa Valduga grew 12% from 2007 to 2008, however the ongoing success of the Casa Madeira brand and new Domno business has contributed to a forecast 30% growth rate for 2008-2009. Although financial figures were not supplied, a 2005 research report by Brazil-based researcher Miriam Aguiar estimated that the company had revenue of US$6.4 million for the year 2004-2005, on production of 750 thousand litres, suggesting that the current 1.1 million litre production figure would have the company around the US$10 million mark.
Beyond the winery, Casa Valduga takes a disciplined approach to marketing and promotion, aiming once again to reinforce the brand's credentials as a premium, fine wine product, at least in the domestic market. Distribution is restricted to specialist shops, gourmet supermarkets, hotels and restaurants, avoiding the Brazilian supermarket sector, which has a mediocre reputation in terms of the selection and presentation of wine. Despite the noble intentions, this distribution mix may be an area to re-examine, as although recognition is high in the wine industry itself, more needs to be done to market the brand to Brazil's emerging middle class and help grow wine consumption in the country (currently very low at less than 2l per capita).
Internationally, while only exporting 10% of its wines, the majority to the US and a number of European markets, moves are underway for expansion, principally, as part of its key role in the Wines from Brazil project, mentioned earlier. To this point, Casa Valduga has had some success raising its profile at a few major events around the world, winning some trophies and medals along the way, although it must be said that as a new and very small player on the international scene, questions remain over whether these small inroads into a few markets can be sustained and lead to bigger things, particularly as the wine itself has not yet been proven as a consistent, quality offering year in, year out. Also, while achieving international sales and recognition should be an important part of the company's future, the domestic market is far more crucial, particularly in terms of reinforcing and building on Brazil's acceptance of the quality of its national sparkling wine (an acceptance which is far less advanced for still wines).
With such challenges ahead, a lot can be understood about Casa Valduga from its strong position on the need for the Brazilian wine industry to improve itself in the key areas of fruit quality, winemaking techniques, marketing efforts and enotourism. Returning to the ongoing push for the Vale dos Vinhedos to be awarded Brazil's first ever DOC, the word's of Joao Valduga himself say a lot for both his winery and the future of Brazilian wine. He stated that, while the DOC is something they believe possible, a range of improvements are still required, including further conversion of old-fashioned vineyards into modern, ecologically-correct systems, the continued introduction and upgrading of technologies, a move to lower yields, viticulture of precision and healthy earth. Or, as he more precisely puts it, "aiming at quality and not quantity, while always maintaining the roots."
(Meininger's Wine Business International - December 2009 Edition)
Joao Valduga is in front of 11 foreign journalists presenting an elite selection of Casa Valduga wines. He is, in every sense, standing right behind these sparkling and still offerings, all produced in the heart of Brazil's most distinguished wine region, the Vale dos Vinhedos (Valley of the Vines), nestled in the Serra Gaucha mountain range in the far south of the country. As the tasting unfolds and the group of mainly Europe-based journalists sniff, sip, gargle and spit their way through the winery's eight best examples, Joao, the winery's director of enology, remains on foot, pacing back and forth and scanning every face for telltale signs of approval, insight, frustration or disappointment. True to his enthusiastic yet focused manner, he requests or more so demands comments - good, bad or ugly - on every wine, and although communication is at times difficult, with Joao understanding some English but speaking little and the majority of the journalists not familiar with the Brazilian Portuguese of the region, the general consensus in the room soon becomes clear: there are some serious wines here and Casa Valduga is a serious winery.
This is no small thing for a Brazilian producer, particularly one without any foreign involvement; Casa Valduga remains 100% family-owned and, not counting some of their premium winery technology imported from Italy, has relied purely on its own resources and expertise throughout the winery's history (unlike a number of Brazil's other top wine producers, which have in recent decades opened their doors to significant foreign investment and influence).
The Casa Valduga story began when the Valduga family made the move to Brazil in 1875, direct from the town of Rovereto in the Italian provence of Trento, as part of a strong wave of immigration from the north of Italy to Brazil's south at the end of the 19th century. Overall, between 1875 and 1900 more than one million Italians moved to Brazil's southern states, which are now home to over 25 million Italian-Brazilians, the largest number of full or partial Italian descendents outside of Italy.
Amongst the first Italian families to arrive in the region, the Valdugas helped settle the area that is now the Vale dos Vinhedos, which had not previously been inhabited, and they also planted some of the valley's first vineyards, albeit with non-noble vine stock that has long since been replaced. Nowadays, there are 31 wineries spread amongst the valley's 82 square kilometres, with around 2,100 hectares of vineyards, 42 hectares of which are owned by Casa Valduga.
In terms of location and conditions, although the valley is certainly not the most naturally advantageous wine region in the world, it is definitely one of the best spots in Brazil, with the hilly, winding topography offering a range of interesting sites and microclimates. The region is in Brazil's southern-most state, Rio Grande do Sul, on the 29th parallel south, 120 kilometers north of Porto Alegre, the state capital, and around 450km from the Uruguayan border. Vineyard sites are at an altitude of between 450-650 metres, while the climate is mild, subtropical and damp, with some frost in colder years, although the threat of hailstorms during summer is a bigger issue.
Notwithstanding these challenges, the Vale dos Vinhedos has developed into a worthy wine region and this was recognised in 2001 when it achieved Brazil's first and only protected Geographical Indication. In keeping with its pioneering history, Casa Valduga played a central role in the successful movement, and is also a key figure in an ongoing push to go one step further and attain a DOC for the valley, once further development and improvement of valley vineyards and winemaking facilities has reached the required levels.
It is perhaps this proactive position that says most about Casa Valduga's philosophy and plans for the future, both in Brazil and on the world stage. The winery is currently run by brothers Erielson, Juarez and João Valduga, all of whom work hard not only to develop the credentials of Casa Valduga, but also those of the Brazilian wine industry as a whole. Amongst other things, Juarez was the first president of the Association of Fine Wine Producers from the Vale dos Vinhedos (APROVALE), an umbrella body formed in 1995 with the aim of creating a spot for the valley on Brazil's rather crowded tourism map. Joao, on the other hand, has been very active in the Institute of Brazilian Wines' promotional program Wines from Brazil, which aims to forge an identity for national wines both domestically and in key export markets.
Despite this outward focus, Casa Valduga recognises that its own vineyards and winemaking facilities are of paramount importance. The winery currently produces 1.1 million litres of wine per year, split 50/50 between sparkling and still. On top of the 42 hectares of vineyards in the Vale dos Vinhedos, Casa Valduga also has 132 hectares in the Encruzilhada do Sul region, about 200km south-west of the valley.
Although not common in Brazil, where over 70% of all production is cheap table wine made from non-noble Vitis Labrusca grapes, all of Casa Valduga's vines are Vitis Vinifera, with the winery squarely focused on the production of fine wines. Furthermore, following a major conversion project in 2000, all vines are now from imported and certificated stock and receive refined cultivation techniques, productivity control and selective harvesting. An example of this commitment to quality fruit was displayed in 2008 when the company imported R$400 thousand (US$ 235 thousand) worth of merlot clones from France.
In terms of the Casa Valduga winery and production facility, significant investment in technology and equipment in recent years has resulted in one of the most modern of its type in South America, including what was Brazil's first enotourism complex. Called Villa Valduga, the complex includes a bed & breakfast style hotel, a thematic garden, wine education facilities and two of the region's best restaurants and was further upgraded over the last two years at a cost of over R$ 1 million (US$ 585 thousand). The complex currently receives around 70,000 visitors annually from the 150,000 that visit the valley, both relatively low numbers that the winery hopes to address over the coming years with more national media coverage and promotions.
Added to this, in 2003 Casa Valduga created a new non-wine business called Casa de Madeira, based just one kilometre from the main winery, producing natural fruit juice and preserves. Initial results have been very promising, with 100% annual growth, albeit from a small base.
As for the wines, Casa Valduga has an extensive range incorporating a number of price brackets and brands, including a series of special editions that are made only in exceptional years; the latter evidence of Casa Valduga's pursuit of excellence when possible and belief that its vineyards can produce top quality fruit, while also acknowledging the growing regions' limitations in terms of consistency.
At this top end there are the Grand Reserve and Premium lines, while in recent years Casa Valduga has also developed a unique range of wines called Mundus, which are elaborated from grapes grown in Argentine and Chilean vineyards. At the lower end there are the Duetto (various blends, each of two varieties), Arte and Naturelle ranges. The winery also has two rosés marketed separately under the Amante Rosé line, a special varietals range called Identidade (Identity) that allows buyers to customise the bottle labels, a new category of kosher wines aimed at Brazil's Jewish community, as well as brandy, grappa and liqueur offerings.
Despite this comprehensive selection encompassing a wide assortment of styles and varieties, it is ultimately Casa Valduga's sparkling wine that is the backbone of the brand, in terms of quality, consumer recognition and sales. The winery prides itself on devoting special care to its 'espumantes' and this has resulted in a number of critically-acclaimed wines that have won over 100 medals and trophies at key events around the world. Casa Valduga has also been very successful in promoting this devotion to sparkling wines and their ensuing quality, plus the fact that it was one of the first Brazilian wineries to develop and use the champenoise method, and is now recognised as one of the, if not the leading Brazilian sparkling wine brands.
The winery is planning even bigger things for the future, aiming to take advantage of a booming domestic market: sales of national sparkling wines have been growing at over 20% per year since 2007, while imported equivalents are on the decrease. Illustrating this investment in the future is the winery's sparkling wine cellar, an impressive chamber over 150 metres long located under the main production and bottling facilities. With a capacity for 6 million bottles, it is currently only around 25% full (this varies depending on when lines are released - the top end remains for up to 72 months), but Casa Valduga's rather ambitious expectation, particularly in a country not yet fully switched on to wine drinking, is to reach full capacity in around 10 years.
Part of the strategy to reach this goal was unveiled in 2008 when Casa Valduga established a new company called Domno. In a move aimed at expanding the company's selection in it's traditionally strongest category, while also safeguarding the name and image of its existing methode champenoise-produced selection, Domno has been created to produce wines made exclusively by the "charmat" method. The business, which is being run by Joao, was established with a R$10 million (US$5.8m) investment, including the purchase of a former facility of Pernod Ricard's Domecq brand in Brazil.
Performance wise, Casa Valduga grew 12% from 2007 to 2008, however the ongoing success of the Casa Madeira brand and new Domno business has contributed to a forecast 30% growth rate for 2008-2009. Although financial figures were not supplied, a 2005 research report by Brazil-based researcher Miriam Aguiar estimated that the company had revenue of US$6.4 million for the year 2004-2005, on production of 750 thousand litres, suggesting that the current 1.1 million litre production figure would have the company around the US$10 million mark.
Beyond the winery, Casa Valduga takes a disciplined approach to marketing and promotion, aiming once again to reinforce the brand's credentials as a premium, fine wine product, at least in the domestic market. Distribution is restricted to specialist shops, gourmet supermarkets, hotels and restaurants, avoiding the Brazilian supermarket sector, which has a mediocre reputation in terms of the selection and presentation of wine. Despite the noble intentions, this distribution mix may be an area to re-examine, as although recognition is high in the wine industry itself, more needs to be done to market the brand to Brazil's emerging middle class and help grow wine consumption in the country (currently very low at less than 2l per capita).
Internationally, while only exporting 10% of its wines, the majority to the US and a number of European markets, moves are underway for expansion, principally, as part of its key role in the Wines from Brazil project, mentioned earlier. To this point, Casa Valduga has had some success raising its profile at a few major events around the world, winning some trophies and medals along the way, although it must be said that as a new and very small player on the international scene, questions remain over whether these small inroads into a few markets can be sustained and lead to bigger things, particularly as the wine itself has not yet been proven as a consistent, quality offering year in, year out. Also, while achieving international sales and recognition should be an important part of the company's future, the domestic market is far more crucial, particularly in terms of reinforcing and building on Brazil's acceptance of the quality of its national sparkling wine (an acceptance which is far less advanced for still wines).
With such challenges ahead, a lot can be understood about Casa Valduga from its strong position on the need for the Brazilian wine industry to improve itself in the key areas of fruit quality, winemaking techniques, marketing efforts and enotourism. Returning to the ongoing push for the Vale dos Vinhedos to be awarded Brazil's first ever DOC, the word's of Joao Valduga himself say a lot for both his winery and the future of Brazilian wine. He stated that, while the DOC is something they believe possible, a range of improvements are still required, including further conversion of old-fashioned vineyards into modern, ecologically-correct systems, the continued introduction and upgrading of technologies, a move to lower yields, viticulture of precision and healthy earth. Or, as he more precisely puts it, "aiming at quality and not quantity, while always maintaining the roots."