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Editor's Viewpoint – What I've Learnt About Chile

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My time in Chile, courtesy of Concha y Toro, is fast drawing to an end. Having reported on both the country's wine industry broadly, and the company specifically for the better part of ten years, this visit has put quite a bit of meat on the bones of my knowledge of all things Chilean. Such as:

Chiles annual per capita consumption of wine is around 14 litres

Chile's annual per capita consumption of wine is around 14 litres

Chile produces the go-to party wine for the younger consumer. When I was in my early- to mid-twenties, I attended many house parties. When it came to bringing a bottle, I was loath to look too one-of-the-crowd and take a bottle of widely-recognised plonk. At the same time, I didn't want to splash out too much. The solution? Chilean wine: Less familiar, less expensive. Fast forward more years than I'd care to mention, and it is clear that this approach is still alive and well. The country continues to specialise in over-producing on quality at the GBP5-to-GBP10 (US$7.50 - $15) price point. While that's great for consumers, this throws up a longer term challenge for the industry: How does it break through the ceiling and push its more premium wares?

Not only has it become clear to me this week that Chile has a swathe of higher-end wines, but many of them certainly hold their own in quality terms, compared to offerings from other – often more established – wine-producing nations. Encouraging consumers to shell out more money for higher-end expressions of brands that they are already familiar with from their house-party days is a challenge facing the likes of Concha y Toro and other Chilean wineries.

Chile still doesn't know what it is yet. Several folk at Concha y Toro have confessed to me this week that the industry has had an identity crisis when it comes to what image it wants to convey to consumers in export markets. While other nations have linked their wine output to lifestyle, environment, cuisine, Lord of the Rings, etc, Chile has yet to find the one over-arching facet that can resonate with consumers. Try it now: When I say 'Chile', what do you think of? Difficult, isn't it?

The country certainly has a lot going for it; an impressive landscape, an aspirational holiday destination, seafood that can compete with the best there is, a young, vibrant outlook from it populace (after decades of political upheaval). The sooner its trade association, Wines of Chile, can pick one such facet and link it to the country's wines, the quicker consumers around the world will buy in to a Chilean state of mind.

Chile is not immune to the impact of climate change, but has more options than most. The country has been more directly affected by climate change: The hole in the ozone layer? Yeah, Chile's got it. Up in the north, near the desert region of the country, a brace of wine regions are struggling with drought, to the extent that many vines are being left to die. But, rather than feel hemmed in by the deserts of the north and the ozone hole in the south, the wine industry can still look east and west.

The country's unique geology affords this option. To the east, there is plenty of height along The Andes that can be explored as existing regions try to deal with environmental fluctuations. And, to the west, there is a coastal range of mountains that offers similar alternatives. The end, then, is not yet nigh.

Chile cannot expect a domestic consumption uptick any time soon. With its Spanish links, its 500-year-old history of vinification and the sheer size of its wine industry – at the last count, the country had around 200 wineries – one would expect there to be a healthy and plentiful approach to wine domestically. Think again. The country's consumption of wine has never been something to write home about. Forty years ago, per capita consumption stood at around 40 litres. Today, that number has fallen to 14 litres. And, it's only going to get worse: Younger consumers in Chile have no connection with wine, preferring pisco instead. The domestic white spirit resonates with the current LDA-to-30 age bracket, so there's little good news on the home front. While exports continue to grow, the country cannot afford to take its foot off the pedal when it comes to breaking into new markets.

Chile's wine presence is dominated by Concha y Toro. The company is the second-largest vineyard owner in the world (behind only E&J Gallo), exporting 93% of all the wine it produces to around 140 markets. Here's the killer number: Concha y Toro accounts for over a third (36%) of all Chilean wine exports. This figure is dominated by Casillero del Diablo, a brand that plays on far broader cues than history or provenance.

The conundrum here, then, is who needs who the most: Concha y Toro or the Chilean wine industry? In any category, all players benefit from a globally-recognised brand that can kick down the door. But, when that bumper brand is one that does not promote its 'Chilean-ness', then what benefit is it to the rest of the category? Consider the Irish whiskey sector, where Pernod Ricard's Jameson is so big it is widely-considered to have transcended the category. That's of no benefit to Irish whiskey; the same could be said of Casillero del Diablo and Chile.


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