La Riojana is Argentina’s largest wine-making cooperative, and one of the country’s top 10 wine exporters, but even so, the 500-member farmer co-op has historically struggled to gain ground in the U.S. wine market. To get wine from one country to another involves a complex dance between growers, importers, shipping companies, distributors, buyers and retail stores. Each step in the process drives up the price of the final product, and there’s not often much transparency between the parties involved.
This past fall, La Riojana found a way to work though the logistics and increase transparency by partnering with Georgia-based Empire Distributing and North Carolina’s Weaver Street Market, the largest grocery co-op in the Southeast. Their model could pave the way to bring La Riojana wines to grocery co-ops across the U.S.
Peg Todloski, wine buyer for Weaver Street Market, calls it a happy accident; one that came about when she ran out of wine.
In 2013, this wine called Triada Malbec was our best-selling wine in terms of dollars,” says Todloski. “In December of 2013, it disappeared. We couldn’t get it. The distributor couldn’t get in touch with the importer and for seven months that wine was unavailable.
Finally, I just looked up the winery. The rules are that if you have a [wine] label being sold in North Carolina, that distributor has rights to that label. If I could contact the winery and they’d be willing to make a new label with the same wine, then the distributor we’d been buying this wine from, Empire, could just skip the importer, because they also have an importer’s license, and bring it in for us.”
She emailed La Riojana’s export manager Walter Carol out of the blue, the modern equivalent of the cold call. He answered right away.
They’d had had all these different failures, trying to get wine into the U.S., and they were trying to figure out how they were going to do it successfully,” Todloski recalls. “He said the main reason he contacted me right away was because there was ‘co-op’ after our company name and they’re a co-op and he thought, ‘This isn’t one of the big box stores just trying to buy a container of wine. This is worth exploring.'”
Weaver Street Market, Empire, and La Riojana agreed to work together to import wine similar to the Triada Malbec, but bottled under a new label, which allowed Empire to import and distribute it throughout North Carolina.
Todloski’s main focus was to guaranteed a reliable supply of quality, affordable wine for Weaver Street’s three stores. But she says the conversation about logistics sparked a much larger idea:
We planted the seed that maybe they should create a program, Riojana wine for co-ops in the U.S. Instead of focusing on big box stores, they would focus on selling their wines to co-ops. There’s a lot of us, but we’re not a chain, so it’s a lot more work.
Here’s how it works: Grocery co-ops pre-order the wine, and La Riojana bottles and labels the wine based on those orders. By working with a U.S. distributor who also has an importer’s license, the co-ops cut out the middleman, reducing the final sale price by 30 to 40 percent.
Each state has different regulations regarding the import of alcohol, but La Riojana’s goal is to duplicate this model with grocery co-ops and distributors across the country.
La Riojana has had success with grocery co-ops in the past. A collaboration with The Co-operative, based in the UK, led to the winery becoming fair-trade certified in 2006. That means not only are growers guaranteed a minimum price for their grapes, they also earn a premium for each case of wine sold that goes to fund community improvement projects including infrastructure to provide running water, money to build and operate a secondary school, and a new hospital.
From the Riojana website:
One community in particular which has seen the benefits of La Riojana’s larger projects is the small, isolated village of Tilimuqui situated in a remote area of La Rioja province, a place where many of our workers and their families live. It is in Tilimuqui that people have witnessed first hand the life changing power of Fairtrade and its projects. A place, where a new water supply and secondary school have made an extraordinary impact on people’s lives.
In years past, growers produced more grapes than they could successfully sell as wine, forcing the co-op to sell some of the harvest off at a lower price as “unfinished juice” to other wine-makers. This meant the growers lost potential revenue and missed out on the fair-trade premium.
I’m anxious to get more wines into people’s hands and into our stores, because the impact that it’s going to be making for small growers is hard to fathom when you’re in Carrboro buying a $7 bottle of wine,” says Todloski. “It doesn’t just impact their income, it impacts their children and their future, having access to healthcare, water, education, these basics that we can lose sight of. That’s really exciting to me.”
Todloski says customer response to the wine has been unprecedented. Weaver Street Market, in conjunction with three other grocery co-ops in North Carolina, sold 22,500 bottles in three months, and they’re expecting to sell at least eight shipping containers of La Riojana wine in 2016. That’s 129,600 bottles of wine and $10,800 in fair-trade premiums that will go to fund community improvement projects, all from wine sales in NC’s co-op groceries.
If La Riojana can successfully partner with other co-ops around the country, that premium could increase three-fold in the coming months. Todloski says the next fair trade goal for the community is to get organic certification for all of La Riojana’s growers, many of whom already use organic practices on their farms.