San José, Costa Rica, since 1956

CAFTA Opens Doors for California Winemakers

A group of California winemakers visited Costa Rica last week looking to find the right groups to distribute their product nationally.

About 13 different wine houses from throughout the U.S. state of California talked to more than 200 wine connoisseurs and distributors at the Hotel Real Continental in Escazú last Thursday.

The event, organized by the U.S. Department of Agriculture (USDA) and the California Wine Institute, gathered restaurateurs, hoteliers, supermarket owners and small and large wine importers in a setting where they had the opportunity to taste five different wines from more than ten different wine houses.

Five of the 13 visiting wine houses week already distribute their product in Costa Rica, according to a representative from the USDA.

Ryan Stewart, representing Heck Estates from the Sonoma region of northern California, said the reason for his trip was to get to know his product’s local distributor, Distribuidora Isleña, as well as the Costa Rican wine drinker in general.

“We’re looking to expand the business,” Stewart said. “The more I know about how my wines are being sold, the better it is for me to help cater to the market and see what I can do to grow exports.”

For example, Stewart was surprised to learn that Costa Rican wine drinkers like cabernet and pinot noir wines more than Rosé, a sweeter wine preferred in Mexico.

Thomas Evans, a winemaker from NapaValley, said his goal was to find a distributor who matched his company’s goals. By the end of his visit, he was considering five different candidates.

“My wines are more boutique … a little bit more expensive. They are very special wines,” Evans said.

Evans, who represents the Domaine Carneros Winery located in the Carneros region of the Southern Napa Valley, specializes in making sparkling wines fermented in the bottle as well as pinot noirs.

“This is my first time ever in Costa Rica,” Thomas said. “I understand two million tourists came through Costa Rica last year, so we know there are a lot of American people who are retired and vacationing and who like to drink wine.”

Another visiting expert, and trip organizer, was Eric Pope from the San Franciscobased Wine Institute.

His mission, he said, was to bring California wineries interested in doing business here to Costa Rica.

Pope described his job as a “wine marketer” who promotes California wines in emerging markets around the world. Traveling around the world and talking to people about wine might seem like an easy gig, but during a time when economic crisis is deterring wine buyers in the U.S., searching for new markets becomes much more important.

“This creates an opportunity for export as an alternative channel,” Pope explained. Stewart, from the Sonoma region, echoed Pope’s sentiment regarding the current hard times.

“We’re looking at domestic sales dropping, so here I am looking to expand our export sales,” Stewart said.

About 1,000 wineries are members of the Wine Institute, and another 140 hold a special exporting membership.

Pope cited two main reasons why California wineries are making their way down to Central America: the growth of tourism and the Central American Free-Trade Agreement with the United States (CAFTA).

“We’ve been looking at the growth of the imported wine market over the last five to ten years here in Costa Rica along with the growth of tourism,” he said. But, “The most important thing is Costa Rica has entered into CAFTA. For us, it meant an immediate reduction of tariffs.”

Chilean and Argentinian exporters do not pay tariffs because of bilateral agreements of their own with Costa Rica.

“The fact that we had to play against countries that had no tariffs inbound made it really difficult. So people would look elsewhere,” Pope said. “Now we have a level playing field, which is really good.”

Pope is thinking ahead. He wants to make last week’s trip an annual affair where more and more wineries can personally introduce their products to distributors and, ultimately, directly to the wine drinker. But first the Costa Rican drinker and his likes and dislikes, must be studied, something that has not been done completely, Pope admits.

“Ticos understand that there is a world of wine,” Pope said. “They know that there is more to the wine world than just Argentina, Chile or France.”

Although Pope says that because of the current economic crisis it is difficult to calculate how big the wine market in Costa Rica could be, he estimates the California wine industry could earn around $10 million a year exporting to Costa Rica.

Pope says California vintners are focused on producing organically and sustainably, something that should be attractive to many ecologically-oriented tourists visiting Costa Rica.

U.S. wine exports passed the $1 billion milestone in 2008, with 90 percent of export wines produced by California. The volume of wine shipments increased by 8 percent in 2008 over 2007, to nearly 55 million cases, according to the Wine Institute.


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