1. Julio Elías* and Gustavo Ferro**
AAWE’s Annual Conference in Ithaca/NY 2018
Understanding Innovations and the Diffusion of Knowledge in New World Wines: Conceptual and Experimental Innovations in Argentina
Julio Elías* and Gustavo Ferro**
*UCEMA, Buenos Aires, Argentina
**UCEMA and CONICET, Buenos Aires, Argentina

2. Motivation
How does the process of applying knowledge to the industry work?
How do people innovate?
What is inside the innovation black box?
Can the innovation process be stylized?

3. Scope
We study the main results of Argentina’s wine industry innovations:
1) Increased internationalization in the market.
2) Improved quality (and export prices).
3) Differentiated products (such as Malbec and Torrontés).

4. Method Two cases: Approach to innovation:
Catena (Mendoza, Center-West)
Etchart & Rolland (Salta, North-West)
Approach to innovation:
Conceptual innovators
Experimental innovators
SOUTH AMERICA

5. New World’s participation in the wine export market
Countries
Variable
1990
1995
2000
2005
2010
2013
NW6
Export Quantity (Index 1990 = 100)
100
296
524
846
1,157
1,262
Export Value (Index 1990 = 100)
302
770
1,494
2,132
2,495
Average Price (Index 1990 = 100)
102
147
177
184
198
OW6
Export Quantity (Index, 1990 = 100)
111
123
142
179
Export Value (Index, 1990 = 100)
114
128
193
249
314
Average Price (Index, 1990 = 100)
103
104
136
140
175
Argentina
411
176
428
538
616
377
759
1,558
3,761
4,527 92
430
364
699
735
Source: FAOSTAT (at February 20th, 2018).
NW6 = New World 6 (Argentina, Australia, Chile, New Zealand, South Africa, United States).
OW6 = Old World 6 (France, Germany, Greece, Italy, Portugal, Spain)

6. New World’s average export prices as a proportion of French wines
Countries
1990
1995
2000
2005
2010
2013
Average
Std. Dev
Argentina
0.11
0.09
0.47
0.27
0.44
0.40
0.29
Australia
0.73
0.63
0.85
0.59
0.41
0.37
0.64
0.20
Chile
0.35
0.42
0.36
0.32
0.38
0.04
New Zealand
0.78
0.84
0.69
1.13
0.54
0.86
0.97
0.23
South Africa
0.33
0.21
United States
0.39
0.56
0.46
0.55
0.45
New World 6
0.34
0.57
0.08
France
1.00
0.00
Germany
0.51
0.43
0.50
0.49
0.48
Greece
0.07
Italy
Portugal
0.14
Spain
Old World 6
0.62
0.65
0.06
Source: FAOSTAT (at February 20th, 2018).

7. Two types of innovators
Goals
Methods
Outcomes
Conceptual
Specific and sudden discoveries (discontinuous).
The goal is precise.
Goals stated in advance. Detailed preparatory plans.
A final work developed systematically
Experimental
Imprecise in advance and evolutionary.
The goal is a topic or problem.
Tentative and incremental.
Trial and error.
Slow building of skills yields to a body of work
Source: Own elaboration, based on Galenson (2007).

8. Case studies Catena Experimental
Case of Study
Type of innovator
Focus
Catena
Experimental
1980s-1990s intent to replicate California’s revolution in Argentina.
1990s-2000s the development of a local grape insignia (Malbec) in the main productive zone of Argentina (Mendoza).
2010-to date, experimentation in different heights and terroirs.
Etchart & Rolland
Conceptual
1990s concept: world class wines can be produced outside Old World traditional producers, of combining high quality practices and technology with local resources (land and varieties). In so doing, hiring of an international expert to implant new practices and know how.
2000s-to date, diffusion of Torrontés and high quality Malbec in a peripheric productive zone of Argentina (Salta).

9. Dr. Nicolás Catena Zapata
Bodega Catena Zapata, Luján de Cuyo, Mendoza, Argentina.

10. Mr. Arnaldo Etchart
Bodega San Pedro de Yacochuya, Cafayate, Salta, Argentina.

11. From common desire to produce world class wines…
and given the historical primacy of French wines as quality paradigm, California’s success in producing world class wines and Chile’s remarkable internationalization…
two types of innovators, Catena (experimental), Etchart & Rolland (conceptual),
left bulk wine production and sold old wineries.
recognized the importance of height and soil, knowledge and technology
achieved the globalization of “local” grapes as Argentine insignias (Malbec & Torrontés).
gained international awards and recognition.

12. Thank you for your attention!