GUALFIN, ARGENTINA – You already know about our ranch here in Argentina. No, it is not very productive or practical. It is too far, too high, and too dry. It is marginal in almost every way.
The cows are too thin (they don’t have enough grass). There’s not enough water in the seasonal rivers to irrigate much. And without water, well, it’s a desert.
It used to be marginally profitable (or at least sustainable). Former owners used to be able to graze 2,000 head of cattle on the ranch. Eager buyers came up to bid on them for the local market.
But the weather seems to have changed over the last 20 years. Each year brings less rain… and more problems. We’re lucky if we can support 500 animals.
And now, refrigerated trucks come up from the pampas, bringing more tender beef at reasonable prices. And because of the altitude and harsh conditions, we rarely get more than 250 calves. Each one sells for barely US$100.
You can do the math yourself
Not much money to pay for fuel, tractors, insurance, tools, vaccinations, and seven salaries.
To make matters worse, there is a political movement afoot in which local activists want to take the ranch and turn it into a reservation for the Indians.
It would be a disaster for the locals who depend on the ranch as the only employer in the valley. That is a long story, which takes more telling than we have time for today… but it just complicates things.
Of course, we could just pack up and move out. It was always meant to be an adventure and a learning experience. (It has been more of both than we reckoned on!) We don’t depend on it for our livelihood. We don’t need it in our lives.
But the people who live here do.
Gustavo, Natalio, Pablo, Carlos, José – they, and their families, work on the ranch. We are the only employer within an hour’s drive. They depend on us to figure out how to keep the ranch going… or they will have to move out.
Right now, we do that by subsidizing it, heavily. But that can’t last forever.
So today, we’re going to make a proposal to you. The idea is to try to “save the ranch.” But we’re not going to ask you for a contribution. We’re going to propose a deal… where you can’t lose.
Let me explain.
A Simple Experiment
When we bought the ranch, we bought a cattle operation. That is what was interesting to us. Perhaps we read too many Westerns as a boy, but we always wanted to be a cowboy. And for the last 10 years, we’ve enjoyed the roundup, branding, cattle drives… and the rough life of a high-country cattle ranch.
The previous owner told us when he left that he planted a few grapes “up in the valley, near Tacana” as an experiment. But we paid little attention.
A few years later, however, the grapes were ready to harvest. We took them over to a neighbor. (Lower in the valley, there are many wineries.) He made wine with them. Malbec.
No “oak.” No mixing grapes. No chemicals. Just pure Malbec grapes from what must be one of the highest, most remote, and most naturally healthy vineyards in the world.
Finally, the bottles came back. We wondered what the wine would taste like.
It was strong. Intense. Rich.
“It’s very good,” our neighbor – Raúl Dávalos – pronounced judgment. “Easily as good as mine.”
His own winery, Tacuil, has been tested by famed wine expert Robert Parker. He gave it a 93 – near the top of his rating system.
“Great,” we replied.
Crushed, Cooled, Fermented
As we would learn, there are a few reasons why our wine is exceptionally good.
First, it is so high, so dry, and so far from other vineyards that there is no need to use a lot of chemicals to kill weeds, bugs, and fungus. The valley is naturally healthy.
Second, the temperature variation between day and night is extreme. It will be very hot when the sun is out (which is almost every day). And the nights will still be cold. The grapes protect themselves with thick skins. These skins are where the flavors and sugars (the source of the alcohol) collect.
Third, the grapes are irrigated, but they get little water compared to most vines. What water they do get is absorbed into limestone rocks in the soil. As the roots pull out the water, they also get vital nutrients and minerals.
In short, the wine is exceptional because the location is exceptional. Plus, we called in an exceptional wine expert – Sebastián “El Turco” Saravia – who supervises all aspects of wine production.
Once the grapes are picked, they go over to our neighbor’s winery. There, Raúl Dávalos, a fourth-generation winemaker, makes sure the grapes are properly crushed, cooled, fermented, and bottled.
Over the last few years, we’ve gained more experience with the wine. We had local experts taste it – “Excellent!” We had experts in the U.S. try it – same verdict. And we shipped up a whole pallet of it for our daughter’s wedding.
But we had to get down to business, too. We remembered the words of Donald Hess of the Hess Collection… a company that sells millions of bottles each year from all over the world.
“Anyone can produce a great wine,” he said. “All you need is the right place. But it takes a genius to sell it.”
Paying the Middleman
The problem is middlemen. You may pay $60 for a bottle of Tacuil’s RD Reserva wine in a restaurant in Buenos Aires. But the winemaker may only get nine bucks. The rest goes to the distributor, the marketer, and the restaurant.
It’s worse when wines are shipped to the U.S. It’s liquor. So everyone has to be licensed. Competition is limited. You have to go through an importer, a distributor, a warehouser, a shipper, and a sales network… not to mention the taxes! You don’t end up with much.
Our vineyard can only produce about 10,000 bottles per year. If we sell the normal way, the wine will be offered in restaurants at maybe $79 a bottle. But by the time the middlemen are paid, little of that money will end up back at the ranch, not nearly enough to cover the costs.
Which leads me to my proposal to you…
4,000 Bottles for Sale
Our vineyard can never be even close to profitable unless we can sell the wine directly to consumers. So here’s what we’re going to do. We’re going to sell it the only way we know how: by subscription only. And we’re going to make you an offer no one has ever made in the history of the wine business (as far as we know).
Last year, frost killed half our output; we only have 4,000 bottles to sell. First come, first served. You place an order. We send the wine to you.
But wait… There’s more.
You don’t know our wine. And we have no reputation in the wine business to give you confidence. (Your editor has been drinking wine for 40 years. But he’s only been making it for five.)
So you don’t know if you’re going to like it or not. And if you don’t like it, we’ll both feel bad. You’ll feel bad about buying it. And we’ll feel bad about selling it to you.
So here’s what we’ll do: You will have a guarantee. If you don’t like it, just tell us. We’ll refund your money.
But there’s a small catch
You have to give it a chance. It’s more intense than the wine you’re probably used to. Goes great with meat. The Argentines drink it with their big steaks, for example. We drink it with everything, every day. Other wines now taste weak in comparison.
Offer it to friends and neighbors. See what they say. And if after you’ve gone through your supply you think it did not live up to the promises and claims we’ve made for it, just say so. We’ll be happy to refund your money.
No need to send anything back. We’ll take your word for it.
So the very worst that could happen is you drink our wine at our expense! We told you that you couldn’t lose!
Remember that our stock is very limited, so don’t delay. Place your subscription order immediately. It’s first come, first served. We only have 300 cases available. If you miss it this year, you’ll have to wait til next year…
So if you’d like to help us save the ranch, raise a glass, and enjoy an exceptional Argentine Malbec, you can place your order right here.
Regards,
Bill
Category: Economics