Info 12 04 16 Wines of Chile Plan Estratégico 2020

Transcription

Wines of Chile - Plan Estratégico 2020 - Mercado Internacional
El sector del vino en Chile se plantea ingresar 3.000
millones de dólares por exportación en 2020
•
•
El “Plan Estratégico 2020” de Wines of Chile tiene como principal objetivo convertir al país chileno en el primer productor de vinos de calidad entre los países
del “Nuevo Mundo”1.
Se prevé una tasa media de crecimiento interanual del 9,2%, alcanzando en
2020 los 3.000 millones de dólares de facturación.
Madrid, 23 abril 2012.- La industria vitivinícola chilena ha fijado un ambicioso objetivo
para esta década: convertirse en el primer productor de vinos de calidad diversos y
sostenibles entre los países del “Nuevo Mundo” para el año 2020. Para ello, la organización Wines of Chile presentó hace unos meses el “Plan Estratégico 2020”, en el que
establecen los pasos a seguir para conseguirlo.
El Plan incluye todos elementos de la industria vitivinícola nacional; pequeños y grandes productores, proveedores, bodegas, pymes, exportadores, organismos de turismo,
etc., han de trabajar conjuntamente para lograr las metas establecidas. El Plan proyecta una tasa media de crecimiento anual en términos de valor del 9,2%, alcanzando los
3.000 millones de dólares estadounidenses en 2020 procedentes de la exportación
de vinos embotellados, frente a los 1.139 millones de US$ facturados en 2009.
Este crecimiento se basa en el incremento de las exportaciones principalmente por el
aumento del precio medio, el cual es inferior al de sus principales competidores. Chile
apuesta por el valor de sus vinos, frente al volumen. Por este motivo, se ha convenido
elaborar vinos de una calidad superior y potenciar su imagen en los principales mercados mundiales.
1
Se entienden como países productores del Nuevo Mundo los siguientes: Chile, Argentina, Estados Unidos, Australia, Nueva Zelanda y Sudáfrica.
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Plan Estratégico 2020
Los 4 pilares del Plan Estratégico 2020 de Wines of Chile son los siguientes:
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Diversidad y Calidad
El principal objetivo de Chile es el de elaborar vinos de calidad diferenciada, aprovechando sus óptimas condiciones agro-climáticas, el rápido desarrollo de nuevas técnicas productivas y el gran número de variedades de uva que se producen: Chardonnay,
Sauvignon Blanc, Syrah o Pinot Noir, entre otras.
•
Sostenibilidad
El Plan no ha olvidado la sostenibilidad, teniéndola en cuenta durante todos los procesos productivos, desde el viñedo hasta la copa. Así, consorcios técnicos de la industria
vitivinícola han colaborado estrechamente con bodegas y expertos de las principales
universidades para crear un programa de sostenibilidad integral que incluye un Código
Nacional de Sostenibilidad, el cual incluye prácticas relacionadas con la sostenibilidad
en términos de producción, agricultura, y responsabilidad social corporativa. Las bodegas que cumplan con los requisitos marcados tendrán derecho a utilizar el sello “Certificado de Sostenibilidad WoC2” en sus botellas.
•
Imagen del País
Aprovechando la imagen del vino como una de las principales señas de identidad de
Chile en el extranjero, el Plan también presta especial atención a la potenciación del
sector del turismo de vino o enoturismo. Desean utilizar al vino como un nexo de
unión para ampliar las oportunidades turísticas y culturales de Chile: gastronomía, folklore, cultura, naturaleza, etcétera.
•
Innovación
En los últimos años, la industria vitivinícola chilena ha invertido en técnicas de investigación y desarrollo con el objetivo de ir mejorando constantemente los procesos productivos a fin de optimizar la calidad del producto final. Para ello, la industria ha creado Vinnova y Tecnovid, consorcios técnicos para desarrollar proyectos de I+D que
cumplan con las necesidades de las bodegas, colaborando además con universidades
nacionales e internacionales.
Para conseguir estos 4 objetivos, se plantean una serie de estrategias para la industria
y en los mercados, cuyo detalle se complementa con un detallado análisis de la situación y 2 anexos (1. Promoción General y 2. Análisis de los Mercados de Destino).
Comienza con un diagnóstico de la industria, analizando los pilares básicos de cualquier estudio sobre el sector a nivel global: Consumo, Superficie de Viñedo, Produc2
Wines of Chile.
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ción, Exportación e Importación. Presenta un análisis de la evolución de los principales
exportadores mundiales en los últimos años, comparando el desarrollo de éstos y el de
Chile. A continuación, se centra en la industria vitivinícola chilena, observando cómo
ha evolucionado y cuáles son las perspectivas de futuro.
El punto 4 se centra de forma específica en los objetivos establecidos en el Plan Estratégico 2020. Recordamos que el objetivo final de Wines of Chile era el de crecer una
media anual del 9,2% en valor para alcanzar los 3.000 millones de dólares estadounidenses en la exportación de vinos embotellados en 2020. Esta meta se basa en las
enormes oportunidades en el mercado internacional, apoyada por el crecimiento
histórico de los vinos chilenos en el extranjero, como se aprecia en las siguientes tablas.
Los objetivos específicos se dividen en dos grandes apartados:
-
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Objetivos al nivel de la industria:
o Alinear la industria tras un mensaje unificado y una estrategia
o Dotar a Wines Of Chile (WoC) con los recursos necesarios para alcanzar
de forma eficiente los objetivos fijados
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o Identificar los problemas que limitan la competitividad de la industria
chilena del vino
o Consolidar WoC como representante de la industria chilena, integrando
los intereses y las necesidades de todas las partes implicadas.
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Objetivos al nivel de los mercados:
o Crear y comunicar claramente una identidad única y diferenciadora para
la categoría
o Desarrollar un plan de inversiones más agresivo y mejor dirigido, con
mayor impacto en los mercados objetivo
o Posicionar “Vinos de Chile” como una denominación de categoría mundial
o Fortalecer la imagen de país para obtener sinergias, integrando el enoturismo, la gastronomía y el vino.
o Esta nueva estrategia requiere alcanzar al consumidor, reforzar el uso
de nuevas tecnologías y redes sociales, actuar estratégicamente con relaciones públicas y una campaña global de posicionamiento.
Todas estas líneas de actuación vienen detalladas en el plan, definiendo objetivos concretos, puntos a desarrollar y recursos necesarios para conseguirlo.
Para conseguir el objetivo general de crecimiento previsto, Wines of Chile ha analizado
tres alternativas posibles que implican diversos elementos relacionados con el volumen, la producción (hectáreas) y el precio medio (a mayor volumen, menor precio
medio y viceversa). Finalmente, se ha considerado que la alternativa intermedia “Crecimiento en Volumen: moderado – Crecimiento de Precio: Moderado” es la más oportuna. Con ella, se prevé un crecimiento aproximado de 2.400 hectáreas por año para
los próximos 11 años (+1,9%).
Por otra parte, el Plan presta especial atención al posicionamiento de los vinos chilenos en el mercado internacional, analizando los principales países competidores. Para
posicionarse de la forma correcta y aumentar la notoriedad, presencia y conocimiento
de los vinos de Chile en el mercado internacional, la industria vitivinícola chilena, a
través del presente Plan, se sirve de diversas herramientas de comunicación: prensa
especializada, importadores, distribuidores y demás comerciantes, sommeliers, etc.
Por otra parte, también establece como público objetivo a aquellos interesados en el
mundo del vino, sin tener por qué ser expertos o profesionales del sector. Éstos pueden convertirse en prescriptores potenciales de los vinos chilenos, otorgándoles divulgación y valorando el “carácter natural y sostenible” de los mismos, como se refieren
desde WoC.
Respecto a las estrategias de promoción, observamos que la inversión en programas
promocionales, ferias internacionales y oficinas de WoC en Chile en Reino Unido, Estados Unidos y Chile ha crecido una media anual del 8,5% desde 2005 a 2010, destinando
un 60% al apoyo procedente del sector privado (78% del total en 2005, por lo que vemos que el sector público ha ido ganando terreno). Por otra parte, se estima que el
gasto medio en promoción por caja es de 0,141 dólares, siendo inferior al de sus prinOEMV
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cipales competidores, siendo Francia el líder con 0,564 dólares por caja. Los principales
objetivos respecto a promoción fijados por Wines of Chile son, entre otros, abrir una
oficina de WoC en Asia, llevar a cabo programas en los principales mercados, y aumentar el coste por caja procedente de actividades de promoción y publicidad hasta los 2024 centavos por caja, lo que implica una mayor dedicación en este aspecto.
Wines of Chile defiende que la inversión en actividades de divulgación, marketing, publicidad y comunicación de los vinos chilenos en el extranjero es una pieza fundamental para la futura consecución de los objetivos establecidos. La organización defiende la
calidad de sus vinos, por lo que opina que hay que saber promocionar lo que ya tienen,
sobre todo ante el aumento del precio medio de venta en exportación que pretenden
desde WoC a través del Plan.
En definitiva, Wines of Chile ha elaborado el Plan Estratégico 2020 con el objetivo de
alcanzar los 3.000 millones de dólares estadounidenses facturados por sus ventas de
vinos embotellados en el extranjero, registrando una tasa media de crecimiento anual
del 9,2%. Para ello, se centran en la producción de vinos de calidad diferenciada, que
posean un precio medio más elevado, al tener el país chileno uno de los precios medios de exportación más bajos entre los principales proveedores mundiales. Para cumplir con este objetivo, deben implicarse el cien por cien de los integrantes de la industria vitivinícola chilena: pequeños y grandes productores, vendedores y distribuidores,
bodegas, exportadores, y demás agentes comerciales relacionados con el sector, trabajando todos ellos en una misma dirección.
Para más información, dirigirse al Observatorio Español del Mercado del Vino
www.oemv.es - Tel. 91 799 26 66 - [email protected]
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WINES OF CHILE
STRATEGIC PLAN 2020
INTERNATIONAL MARKET
NOVEMBER 2010
CONTENTS
4. STRATEGIC PLAN 2020
1. INDUSTRY DIAGNOSTIC
STRUCTURE OF THE WORLD WINE INDUSTRY
Global Consumption
Surface Area Planted to Vine
Production
Exports
Imports
CHILE’S NATIONAL WINE INDUSTRY
COMPETITION
United States
Australia
South Africa
New Zealand
Argentina
France
Italy
Spain
EVOLUTION OF THE CHILEAN INDUSTRY IN THE GLOBAL CONTEXT
Evolution of Exports
Generic Investment
CONSUMERS
Wine Consumers
Image of Chile in Target Consumer Market
SWOT ANALYSIS (STRENGTHS, WEAKNESSES, OPPORTUNITIES,
AND THREATS) OF THE CHILEAN WINE OFFER
Strengths
Weaknesses
Opportunities
Threats
9
9
10
11
12
14
15
18
18
20
21
23
25
27
28
30
32
32
38
39
39
39
41
41
41
41
42
2. VISION & MISSION
VISION OF THE CHILEAN WINE INDUSTRY
MISSION
45
45
3. POSITIONING
COMPETITIVE ENVIRONMENT
COMMUNICATIONS TARGET
INSIGHT
BENEFITS
VALUES AND PERSONALITY
ESSENCE
UNIQUE SELLING PROPOSITION
TAG LINE
STRATEGIC PILLARS
Diversity & Quality
Sustainability
Country Image
Innovation
47
47
47
47
48
48
48
48
49
49
51
53
55
GENERAL STRATEGIC OBJECTIVE
SPECIFIC STRATEGIC OBJECTIVES
Corporate Level Objectives
Market Level Objectives
STRATEGIC PLANS
Corporate Level Strategies
Market Level Strategies
Product
Price
Target Markets
Channels
Promotion
ACTION PLAN
57
61
61
61
61
61
62
62
64
66
66
67
68
5. THE STRATEGIC IMPORTANCE OF THE INDUSTRY
ECONOMIC IMPORTANCE
SOCIAL ROLE
LEADERSHIP AND PARTNERSHIP
THE WINE INDUSTRY’S CONTRIBUTION TO DEVELOPING
THE COUNTRY IMAGE
MICROECONOMIC INDICATORS FOR THE WINE INDUSTRY
CONCLUSIONS
71
72
73
73
74
74
6. REQUIRED INVESTMENT
HISTORIC INVESTMENT IN PROMOTION
PROJECTED INVESTMENT & FUNDING SOURCES
RETURN ON INVESTMENT
77
79
81
7. MANAGEMENT CONTROL SYSTEM
CORPORATE LEVEL KEY PERFORMANCE INDICATORS (KPI)
MARKET LEVEL KEY PERFORMANCE INDICATORS (KPI)
83
84
ANNEX 1: GENERIC PROMOTION
EUROPEAN UNION
Sopexa
ICE
Spain
ICEX
Rioja
WINES OF SOUTH AFRICA
NEW ZEALAND WINE GROWERS
WINES OF ARGENTINA
WINE INSTITUTE OF CALIFORNIA
WINES OF AUSTRALIA
87
88
88
88
88
88
89
89
89
90
90
ANNEX 2: ANALYSIS OF TARGET MARKETS
UNITED STATES
CANADA
UNITED KINGDOM
BRAZIL
ASIA
China
Japan
Korea
93
97
98
99
102
102
104
106
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Wines of Chile · Strategic Plan 2020 International Market
INTRODUCTION
Dear Friends:
The Chilean wine industry has undergone numerous and profound transformations
over the past 30 years—its quality revolution led by the complete technological
renovation during the 1980s, the export boom of the 1990s, and the new terroir
developments during the 2000 decade. This transformation has allowed a new
generation of talented viticulturists and winemakers to capitalize on Chile’s
viticultural paradise and to produce World Class Wines of unique character
and personality.
Chile is the world’s eighth largest wine producer and the fifth largest exporter,
reaching a market share of 8% by volume of the global international wine market
at the close of 2010. However, and most importantly, Chile exports 70% of its wine
production, making it the world’s most globalized wine industry, with great flexibility,
innovation, and a long-term commitment to quality and service second to none. With
150 destination countries and 1.5 billion1 consumers per year, Chilean wines are
positioned as the country’s most emblematic and best known world ambassador.
Despite this undeniable success, Chilean wines face very high levels of competition in the different world markets from many
appellations and brands, and its average prices are substantially lower than those of its competitors. As a consequence, the
industry’s present profitability levels are low, and there is an urgent need to elevate our premium positioning and average
prices to achieve a sustainable return in the long term.
Making decisive progress toward positioning Chile as a world-class appellation for the production of premium and superior
wines, gaining additional image and value is the only possible response to the competitive challenges we face today. This is
a key requirement for the health and long-term sustainability of Wines of Chile.
The Chilean wine industry’s Strategic Plan 2020 delivers the guidelines for a vigorous ten-year course of international
development and defines the industry’s vision, mission, positioning, strategic objectives, necessary investments,
opportunities, plans of action, and more. We have developed the Plan in conjunction with the wineries and key industry
members, and with the conviction that we can and should advance toward a more significant participation in the world’s
premium wine segment.
1. This publication uses the American English definition of a billion (1,000,000,000), which corresponds to the British (and Spanish) “thousand million.”
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We have set the objective of becoming the ‘Number One producer of premium, sustainable, and diverse wines of the New
World by 2020, increasing the value of bottled wine exports over the course of the decade to US$3 billion. This is based on
the opportunities and capacities explained in the text and sustained by the historic growth of Chile’s wine exports.
We want to play a key role in Chile’s progress. This is the best contribution we can make to the future of our country to
transition to a modern, developed nation, eliminating poverty, and enhancing the well being and opportunities for all of
our citizens. We are convinced of the enormous potential of Chile’s wine industry, its importance at the global level as a
world-class producer, and its multiplying effect on the image of Chile. Over the past decade, wine has become the major
ambassador of Chile in the minds of foreign consumers—as is reflected in the latest studies conducted by the Fundación
Imagen de Chile—regarding the perception and knowledge of our country in its principal markets of interest. Wine adds
positive and valuable characteristics to the country image and facilitates the export of new products.
In addition to the very positive effects the growth of our exports has had on our country’s economy, Vinos de Chile A.G. and
its various areas of work, Wines of Chile and the Vinnova and TecnoVid Technological Consortiums have been pioneers in
associative work in key areas for the development of the country and the agricultural sector; international promotion and
market development; research and development in viticulture, enology, and marketing; the wine industry’s Sustainability
Program, and social responsibility. The ongoing and generous contributions of strategic institutions has been essential in
these initiatives, and we are grateful to ProChile, Corfo, the Ministry of Agriculture, and the Fundación Imagen de Chile,
whose support we value and will need in the future.
We are confident this Strategic Plan will serve our wine industry and the government’s promotional and development bodies
to work together toward achieving the objectives, strategies, and commitments set forth, aligning our efforts to ensure their
effectiveness. The success of the Plan depends upon it.
The future looks promising for Wines of Chile and the overall development of the country. It is up to us to capitalize on our
great opportunities. Viva Chile!
René Merino
President
Vinos de Chile – Wines of Chile
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WINES OF CHILE STRATEGIC PLAN STEERING COMMITTEE
Eduardo Chadwick
Chairman
Collaborators:
Giancarlo Bianchetti
Douglas Murray
Ricardo Letelier
Constanza Vincent
Patricio Middleton
René Araneda
Javier Bitar
Andrés Turner
Juan Somavía
Claudia Soler
Michael Cox
Lori Tieszen
Christine Colleta
Benoit Allaire
Marie-Josée Allaire
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INDUSTRY DIAGNOSTIC
STRUCTURE OF THE WORLD WINE INDUSTRY
Global Consumption
The world consumes approximately 236 million hectoliters of wine each year. After eight years of growth, this level fell in
2008 and 2009 as a result of the world economic crisis. The European Union decreased its demand, which was partially
compensated by an increase in demand from North America and Asia.
GRAPH 1: WORLD WINE CONSUMPTION (THOUSANDS OF HL)
2009 | Estimated
2007
2006
2005
2004
2003
2002
2008 | Provisional
Source: International Organization of Vine and Wine, 2010 (www.oiv.org)
2001
2000
1999
1998
1997
1996
1995
250
245
240
235
230
225
220
215
210
205
Although the primary wine-consuming countries are France, United States, Italy, and Germany, the market trend has been
toward a decreasing consumption in the large Western European producing countries and an increasing consumption in new
consumer countries in Asia and Latin America, which still have a very low per capita consumption rate.
9
TABLE 1: WORLD WINE CONSUMPTION TOTAL & PER CAPITA (2009 ESTIMATE)
COUNTRY
France
United States
Italy
Germany
United Kingdom
Spain
Russia
Argentina
China*
Australia
Portugal
Netherlands
South Africa
Others
TOTAL
THOUSANDS HL
30
27
25
20
13
11
11
10
9
5
5
3
3
65
237
LT/PER CAPITA
47
9
42
25
21
28
8
25
1
24
43
21
7
Note: * assumes a 13% growth over the 2008 figure (source: www.topwinechina.com)
Surface Area Planted to Vine
Although the world’s overall surface area planted to vine tends to be constant, it has decreased by 0.8% in the past four
years, primarily due to the vineyards that have been pulled up and subsidized conversions in the European Union in the
face of falling prices, over-production, and the impoverishment of the sector. As a result, Spain, France, and Italy, the three
countries with the largest plantations in the world, have reduced the number of hectares planted.
GRAPH 2: WORLD SURFACE AREA PLANTED TO VINE (THOUSANDS OF HECTARES) (WINE GRAPES, TABLE GRAPES & OTHERS)
8,500
8,000
7,500
7,000
6,500
6,000
5,500
Source: International Organization of Vine and Wine, 2009
10
2009 | Estimated
2008 | Provisional
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
5,000
As the following graph shows, the primary parties involved are European countries that represent nearly 58.4% of the world’s
vineyards, particularly Spain, France, and Italy. Non-European countries include the United States and China.
GRAPH 3: WORLD SURFACE AREA PLANTED TO VINE (THOUSANDS OF HECTARES) (WINE GRAPES, TABLE GRAPES & OTHERS)
1,200
1,000
800
600
400
200
Brazil
Germany
Greece
South Africa
Australia
Chile
Rumania
Argentina
Portugal
United States
China
Turkey
Italy
France
Spain
0
Production
The world’s wine production fell in 2009 to volumes similar to those produced in 2008: 266 million hectoliters, a relatively low
level of production and similar to that of 2001, 2003, 2007, and 2008. More than 70% came from European countries, primarily
France, Italy, and Spain. In the New World, the United States, Argentina, Australia, South Africa, and Chile predominate.
TABLE 2: WORLD WINE PRODUCTION (THOUSANDS OF HL, 2009 ESTIMATE)
COUNTRY
Italy
France
Spain
United States
Argentina
Australia
Chile
South Africa
Germany
China
Portugal
New Zealand
Others
TOTAL
TH HL
48
46
33
21
12
12
10
10
9
8
6
2
51
266
11
Exports
World-wide wine sales presented an increasing trend prior to 2009, when it reached 86.1 million hectoliters.
GRAPH 4: WINE EXPORTS (THOUSANDS OF HL)
73.5% of the total volume exported is from European countries such as France, Italy, and Spain.
TABLE 3: PRIMARY WINE EXPORTING COUNTRIES (THOUSANDS OF HL, 2008)
COUNTRY
Italy
Spain
France
Australia
Chile
Germany
United States
South Africa
Argentina
Portugal
New Zealand
Others
TOTAL
12
THOUSANDS OF HL
19
14
13
8
7
4
4
4
3
2
1
8
86
2009 | Estimated
2008 | Provisional
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0
The following graph shows the New World’s positive evolution in market share with respect to traditional wine producing
countries.
GRAPH 5: MARKET SHARE OF OLD AND NEW WORLDS IN WORLD EXPORTS
10,000
9,000
31%
Volume Exported (Th Lt.)
8,000
7,000
6,000
69%
5,000
4,000
3,000
2,000
1,000
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Year
Old World
Source: Wines of Chile based on information from the OIV, 2010
New World
13
Imports
The majority of imports are concentrated in European countries (73.2%), followed by the Americas (16.5%), Asia (5.9%),
Africa (3%), and Oceania (1.4%).
TABLE 4: WINE IMPORTS INTO PRIMARY COUNTRIES (THOUSANDS OF HL, 2009)
COUNTRY
Germany
United Kingdom
United States
Russia
France
Netherlands
Canada
Belgium
Switzerland
Denmark
Italy
Sweden
Japan
China
Czech Republic
Others
TOTAL
Source: OEMV, 2010 (www.oemv.es)
14
THOUSANDS OF HL
13.7
11.9
8.3
5.8
5.8
3.6
3.2
3.1
1.8
1.8
1.8
1.8
1.8
1.6
1.5
13.7
81.4
CHILE’S NATIONAL WINE INDUSTRY
In accordance with figures produced by Chile’s Agricultural and Livestock Service (SAG, www.sag.gob.cl), the country has
approximately 121,000 hectares of viniferous vines planted (2007–2008 registry), and the 2009 production is estimated
to be 1.009 billion2 liters of wine. Exports in the same period reached 694 million liters and US$1.381 billion. The following
table shows the evolution of the national wine industry’s most relevant parameters.
TABLE 5: EVOLUTION OF THE MOST IMPORTANT PARAMETERS OF THE CHILEAN INDUSTRY
Years
2000
Number of Wineries
Vineyards Planted (thousands of hectares)1 103
Wine Production (th Lt) 1
642
Average Yield (Lt/ha) 2
8,886
Apparent Consumption (th Lt) 1
227
Exports3
Bottled Wine
Volume (th Lt)
185
Growth Rate by Volume (%)
Value (th US$)
495
Growth Rate by Value (%)
Average Price (US$ FOB/Lt)
2.67
Average Growth of Average Price (%)
Total Wine
Volume (th Lt)
267
Value (th US$)
573
2.15
Average Growth of Average Price (%)
2001
2002
2003
2004
2005
2006
2007
2008
107
545
9,251
225
109
562
9,363
230
110
668
9,590
255
112
630
9,605
255
114
789
9,322
264
117
845
9,498
238
118
828
9,566
298
121
868
9,497
234
2009
210
123
1,009
9,742
312
193
4
511
3
2.65
-1
204
6
523
2
2.57
-3
221
8
576
10
2.61
2
264
19
707
23
2.67
2
270
2
746
6
2.77
4
287
6
825
11
2.87
4
353
23
1,081
31
3.06
7
362
3
1,164
8
3.22
5
383
6
1,139
-2
2.97
-8
311
16
593
3
1.91
-11
349
12
602
2
1.73
-9
395
13
671
11
1.70
-2
468
18
835
24
1.79
5
418
-11
877
5
2.10
17
474
13
962
10
2.03
-3
610
29
1,256
31
2.06
1
589
-3
1,376
10
2.34
14
694
18
1,381
0
1.99
-15%
Sources: 1: SAG (www.sag.gob.cl). There was a change in data collection methods beginning in 2008. 2: Prepared based on SAG production and consumption figures.
3: Official WoC Statistics
Red varieties comprise 73% of the varieties produced and 27% are white. Of the red, 63% are those of high demand
(Cabernet Sauvignon, Merlot, and Syrah). In white grapes, 66% of the surface area planted corresponds to Sauvignon Blanc
and Chardonnay.
TABLE 6: EVOLUTION OF SURFACE AREA PLANTED BY VARIETY (2008)
PRIMARY RED VARIETIES
VARIETY
HECTARES PLANTED
Cabernet Sauvignon
38,644
Merlot
12,086
Carmenere
8,411
Syrah
4,808
Pinot Noir
2,130
TOTAL REDS*
88,653
% TYPE
44
14
10
5
2
100
% TOTAL
32
10
7
4
2
73
PRIMARY WHITE VARIETIES
VARIETY
HECTARES PLANTED
Sauvignon Blanc
11,244
Chardonnay
12,739
Muscat of Alexandria
7,271
TOTAL WHITES*
32,334
% TYPE
35
31
19
100
% TOTAL
9
8
5
27
* Total includes other varieties. Source: Estimated based on SAG figures, 2010 (www.sag.gob.cl)
2. This publication uses the American English definition of a billion (1,000,000,000), which corresponds to the British (and Spanish) “thousand million.”
15
The following table shows the evolution of hectares planted for the most important varieties. Carmenere, Syrah, and
Cabernet Franc have shown the greatest growth rate in the past ten years. Pinot Noir, Cabernet Sauvignon, and Merlot have
also increased significantly.
TABLE 7. EVOLUTION OF HECTARES PLANTED
1994
1995 1996
11,112
2,353
4,150
5,981
103
138
307
2,708
15,990
12,281 13,094
2,704 3,234
4,402 4,503
6,135 6,172
106
93
215
287
296
317
2,649 2,616
15,280 15,280
10,251
53,093
19
17
10,324 10,371
54,392 56,003
1997 1998
1999
VARIETAL
Cabernet Sauvignon
Merlot
Chardonnay
Sauvignon Blanc
Chenin Blanc
Pinot Noir
Riesling
Semillon
País
Carmenere
Syrah
Cabernet Franc
Others
TOTALS
15,995
5,411
5,563
6,576
98
411
338
2,427
15,241
330
201
64
10,895
63,550
21,094
8,414
6,705
6,756
104
589
348
2,425
15,442
1,167
568
138
11,638
75,388
26,172
10,261
6,907
6,564
95
839
286
2,355
15,457
2,306
1,019
316
12,780
85,357
YEARS
2000 2001 2002 2003
HECTARES PLANTED
35,967
12,824
7,672
6,790
76
1,613
286
1,892
15,179
4,719
2,039
689
14,130
103,876
38,227
12,887
7,567
6,673
49
1,450
286
1,860
15,070
5,407
2,197
823
14,475
106,971
39,261 39,731
12,768 12,879
7,561 7,565
7,041 7,368
52
51
1,434 1,422
283
288
1,843 1,821
14,949 14,953
5,805 6,045
2,347 2,468
869
925
14,356 14,580
108,569 110,097
2004 2005
40,086
12,942
7,722
7,741
76
1,440
293
1,715
14,865
6,545
2,754
1,056
14,821
112,056
2006
2007 2008*
40,441 40,789
13,142 13,368
8,156 8,548
8,379 8,697
73
76
1,361 1,382
305
305
1,708 1,727
14,909 14,955
6,849 7,183
2,988 3,370
1,099 1,143
15,038 15,250
114,448 116,793
40,766 38,644
13,283 12,086
8,733 9,898
8,862 11,269
76
59
1,413 2,130
305
318
1,719 1,504
15,042 14,702
7,284 8,411
3,513 4,808
1,177 1,352
15,385 15,797
117,559 120,977
Note: * Estimate based on 2010 SAG data and 2007/2008 Vineyard Registry. (www.sag.gob.cl)
The primary export markets in terms of volume are the United Kingdom, United States, Germany, and Canada, which together
represent 50% of the total exports and 34% of the target markets, including the internal market. As can be observed in the
following graphs, most of the decrease in the share of sales in the internal market has been diverted toward new markets
rather than to existing markets. In contrast with the Australian industry, Chile has reduced its concentration.
GRAPH 6: EVOLUTION OF TARGET MARKETS (2000, 2009 / VOLUME)
TARGET MARKETS 2000
Others 22%
TARGET MARKETS 2009
Internal Market 46%
Others 28%
Internal Market 31%
Denmark 3%
Germany 3%
Canada 6%
United Kingdom 9%
United States 11%
Source: Prepared based on information from SAG (www.sag.gob.cl) and Wines of Chile
16
Brazil 2%
Denmark 3%
Netherlands 3%
Germany 5%
Canada 4%
United States 13%
United Kingdom 11%
With respect to exports by varietal, Sauvignon blanc has both grown in value and volume over the past seven years to reach
an average growth rate of 18% and 16%, respectively. Cabernet Sauvignon and Carmenere follow in importance.
TABLE 8: EXPORTS OF BOTTLED WINE BY VARIETY
VARIETIES
2002
2003
2004
2007
2008
2009
236,962
68,975
116,847
97,771
0
0
0
186,531
707,086
2005
2006
THOUSANDS OF US$ FOB
240,634
260,433
81,870
99,199
112,580
109,083
95,314
97,491
0
0
0
0
0
0
215,872
258,776
746,271
824,982
Cabernet Sauvignon
Sauvignon Blanc
Merlot
Chardonnay
Carmenere
Syrah
Pinot Noir
Others
TOTAL
195,601
46,471
93,713
77,083
0
0
0
109,772
522,640
204,347
53,099
98,827
82,230
0
0
0
137,354
575,857
327,553
137,467
135,610
116,884
62,799
30,619
20,547
249,461
1,080,941
318,393
153,534
131,622
118,326
70,178
33,682
22,960
315,402
1,164,098
260,804
140,033
102,312
98,776
67,638
25,362
20,624
423,616
1,139,166
Cabernet Sauvignon
Sauvignon Blanc
Merlot
Chardonnay
Carmenere
Syrah
Pinot Noir
Others
TOTAL
70,150
18,850
34,380
29,886
0
0
0
50,333
203,599
71,979
21,367
36,707
31,601
0
0
0
58,915
220,569
79,184
27,948
43,277
36,382
0
0
0
77,685
264,476
THOUSANDS OF LITERS
79,223
83,073
30,798
36,150
41,090
38,291
33,697
33,966
0
0
0
0
0
0
84,946
95,980
269,754
287,460
99,849
47,019
45,278
38,306
18,813
7,551
4,541
91,721
353,078
92,018
49,803
41,970
36,727
19,715
7,893
4,753
108,699
361,576
77,415
50,217
36,772
32,359
18,797
6,223
4,425
156,706
382,915
Cabernet Sauvignon
Sauvignon Blanc
Merlot
Chardonnay
Carmenere
Syrah
Pinot Noir
Others
TOTAL
2.79
2.47
2.73
2.58
2.84
2.49
2.69
2.60
2.99
2.47
2.70
2.69
US$/LITER
3.04
2.66
2.74
2.83
3.13
2.74
2.85
2.87
2.18
2.57
2.33
2.61
2.40
2.67
2.54
2.77
2.70
2.87
3.28
2.92
3.00
3.05
3.34
4.05
4.53
2.72
3.06
3.46
3.08
3.14
3.22
3.56
4.27
4.83
2.90
3.22
3.37
2.79
2.78
3.05
3.60
4.08
4.66
2.70
2.97
Source: National Customs Service, 2010
Note: the “Others” category includes all transactions not specified in the gloss by varietal shown in the table
17
COMPETITION
United States
The United States is the world’s fourth largest producer and the sixth largest exporter. Its industry depends primarily on
California, which is responsible for 90% of the production. New York, Washington, Oregon, New Jersey, and Virginia make
up the remaining percentage. The following table presents a summary of the primary indicators in the American market.
TABLE 9: EVOLUTION OF THE MOST IMPORTANT PARAMETERS IN THE US INDUSTRY
Years
2000
Number of Wineries
2,904
Total Vineyards Planted (thousands of hectares)
Wine Production (th / Lt.)
2,333
Consumption (th / Lt)
2,150
Exports
Bottled Wine
Volume (th / Lt)
Value (th / US$)
Growth Rate of Average Price (%)
Total Wine
Volume (th / Lt)
294
Value (th / US$)
547
Average Price (US$ FOB / Lt)
1.86
Growth Rate of Average Price (US$ FOB/Lt)
Imports
Volume (th / Lt)
488
Value (th / US$)
2001
3,187
2,219
2,173
2002
3,469
208
2,088
2,336
2003
3,873
205
2,225
2,419
2004
4,356
202
2,305
2,517
2005
4,929
204
2,710
2,620
2006
5,424
206
2,359
2,714
2007
5,958
207
2,414
2,820
2008
6,368
208
2,346
2,850
2009
6,705
215
2,677
2,903
200
169
-16%
521
-15%
3.09
1%
615
3.07
304
3
541
-1
1.78
-4
282
-7
549
1
1.95
10
349
24
621
13
1.78
-9
461
32
809
28
1.77
-1
388
-16
674
-17
1.73
-2
405
4
876
29
2.16
25
455
12
955
9
2.09
-3
491
8
1,008
6
2.05
-2
418
-15
911
-9
2.18
6
527
604
642
3,306
666
3,444
743
3,797
805
4,171
868
4,659
855
4,655
952
4,037
Source: Wine Institute (www.wineinstitute.org), Adams Book
The following table represents the evolution of the vineyards planted in California by varietal. It clearly shows that in
response to world consumer trends, the industry tended to increase the participation of red varietals in the total surface area
planted from 51% in 1995 to 61% in 2009. With respect to specific white varietals, Chardonnay has increased dramatically
since 1995. Varietals of lesser consumption on the world level such as Chenin Blanc and Pinot Gris have decreased their
market share. In red varietals, those of greatest consumption worldwide such as Cabernet Sauvignon, Syrah, and Merlot
increased their share.
18
TABLE 10: EVOLUTION OF SURFACE AREA PLANTED BY VARIETAL (CALIFORNIA)
HECTARES
% TYPE
% TOTAL
2000
2009
2000
2009
2000
2009
WHITE VARIETALS
Chardonnay
Chenin Blanc
French Colombard
Sauvignon Blanc
Pinot Gris
Others
TOTAL WHITE VARIETALS
34,239
3,248
9,433
4,241
1,089
6,793
59,043
38,329
3,335
10,904
6,223
5,124
10,164
73,221
58%
6%
16%
7%
2%
12%
100%
52%
5%
15%
8%
7%
14%
100%
22%
2%
6%
3%
1%
4%
39%
20%
2%
6%
3%
3%
5%
39%
RED VARIETALS
Cabernet Sauvignon
Merlot
Pinot Noir
Syrah
Zinfandel
Others
TOTAL RED VARIETALS
25,762
16,612
7,946
5,990
17,548
20,382
94,240
30,583
18,654
14,683
7,758
20,132
25,958
117,769
27%
18%
8%
6%
19%
22%
100%
26%
16%
12%
7%
17%
22%
100%
17%
11%
5%
4%
11%
13%
61%
16%
10%
8%
4%
11%
14%
61%
Source: www.nass.usda.gov, 2010
The internal market continues to be the primary destination for American production, although it has decreased in importance.
The industry’s primary export destinations are the European Union, Canada, Japan, and Hong Kong.
GRAPH 7: TARGET MARKET EVOLUTION (2000, 2009)
TARGET MARKETS 2000
Canada 2%
United Kingdom 2%
TARGET MARKETS 2009
Others 5%
European Union 9%
Canada 3%
Japan 1%
Others 1%
Internal Market 91%
Internal Market 86%
Source: Wine Institute, 2010 (www.wineinstitute.org)
19
Australia
The average annual production of the world’s seventh largest producer over the past for years is 1.4 million liters. The
following table shows the evolution of the most relevant parameters of the Australian wine industry. As can be observed,
there is an upward trend in hectares planted and therefore in wine production, which is clearly reflected in a greater volume
of exports.
TABLE 11: EVOLUTION OF THE MOST IMPORTANT PARAMETERS IN THE AUSTRALIAN INDUSTRY
Years
Number of Wineries
Total Vineyards Planted (thousands of hectares)
Wine Production (th / Lt.)
Exports
Total Wine
Volume (th / Lt)
Value (th / US$)
Imports
Volume (th / Lt)
Value (th US$)
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
1,318
1,465
1,625
1,814
1,899
2,008
2,146
2,299
2,000
148
158
157
164
167
169
174
173
1,035
1,174
1,038
1,401
1,420
1,430
962
1,245
nd
398
401
420
436
455
432
448
428
426
339
834
2.46
416
23
1,069
28
2.57
4
508
22
1,546
45
3.04
18
581
14
1,871
21
3.22
6
661
14
2,094
12
3.17
-2
736
11
2,107
1
2.86
-10
798
8
2,499
19
3.13
9
709
-11
2,243
-10
3.16
1
750
6
1,892
-16
2.52
-20
15
63
17
90
19
113
22
143
27
176
34
257
53
360
62
369
13
48
Source: AWEC, 2009 (www.winesaustralia.com)
With respect to varieties planted, 58% are red varietals and 42% are white. Among the reds, 82% are those in high demand
(Syrah, Cabernet Sauvignon, and Merlot). Chardonnay is the primary white variety and presents an interesting demand in
all markets.
TABLE 12: EVOLUTION OF SURFACE AREA PLANTED BY VARIETAL (AUSTRALIA)
PRIMARY RED VARIETALS (2008)
VARIETAL
HECTARES
Syrah
43,977
Cabernet Sauvignon
27,553
Merlot
10,764
Pinot Noir
4,49
TOTAL
100,482
% TYPE
44
27
11
4
100
% TOTAL
25
16
6
3
58
PRIMARY WHITE VARIETALS (2008)
VARIETAL
HECTARES
Chardonnay
31,564
Semillón
6,715
Sauvignon Blanc
6,405
Riesling
4,401
TOTAL
72,194
% TYPE
44
9
9
6
100
% TOTAL
18
4
4
3
42
Source: AWEC, 2009 (www.winesaustralia.com)
The primary export markets are the United Kingdom and the United States, which together represent 67% of the volume and
61% of the value of total exports.
20
GRAPH 8: EVOLUTION OF TARGET MARKETS (1999, 2009)
TARGET MARKETS 1999-2000
TARGET MARKETS 2008-2009
Others 10%
Canada 2%
New Zealand 3%
Others 16%
Internal Market 58%
Internal Market 36%
New Zealand 2%
United States 7%
Canada 4%
United Kingdom 20%
United States 20%
United Kingdom 22%
Source: AWEC, 2009 (www.wineaustralia.com)
South Africa
South Africa currently has approximately 101,000 hectares planted to wine grapes. It has 3.8% of the world’s production,
putting it in eighth place on the world scale. Table 13 shows the evolution of the industry’s most relevant parameters.
TABLE 13: EVOLUTION OF THE MOST IMPORTANT PARAMETERS OF THE SOUTH AFRICAN INDUSTRY
Years
2000
2001
Number of Wineries
Total Vineyards Planted
(thousands of hectares)
93,656
94,412
Wine Production (th / Lt)
540
530
389
390
Exports
Bottled Wine**
Volume (th / Lt)
105
113
Value (th / US$)
212
199
-6
2
1.8
Total Wine
Volume (th / Lt)
158
165
Value (th / US$)
244
230
-5.8
1.50
1.40
Growth Rate of Average Price (US$ FOB/Lt)
Imports
Volume (th / Lt)
8
3
Value (th / Lt)
2002
2003
2004
2005
427
2006
572
2007
560
2008
585
2009
96,233
567
388
98,605
713
346
100,207
697
348
101,607
628
340
102,146
710
341
101,957
730
356
101,325
763
356
781
155
156
166
234
151
235
195
219
254
27.5
1.6
351
38.6
2.2
435
23.9
2.6
483
10.9
2.1
407
-15.8
2.7
518
27.5
2.2
552
6.5
2.8
521
-5.5
2.4
211
233
262
351
273
503
436
430
287
24.9
1.40
421
46.7
1.80
538
27.7
2.10
599
11.4
1.70
520
-13.2
1.90
672
29.2
1.30
757
12.6
1.70
722
-4.6
1.70
32
49
3
20
19
14
19
Source: www.sawis.co.za, 2009 / http://www.daff.gov.za/, OEMV 2010 (www.oemv.es)
Note:* includes sultana, a portion of which is used in wine production. ** Includes exports of boxed wine
21
Grapes destined for white wines constitute 56% of the total planted, and Chenin Blanc leads with 19%. Red varieties
make up 44% of the total; Cabernet Sauvignon represents 13%. Due to the shortage of white wine, they have increased the
plantations of Chenin Blanc, Sauvignon Blanc, and Chardonnay.
TABLE 14: EVOLUTION OF PERCENTAGE OF VARIETIES PLANTED
VARIETAL
1997
1998
1999
2000
Cabernet Sauvignon
Pinotage
Merlot
Syrah
Others
TOTAL
5.7
4.4
2.5
1.6
7.7
21.9
6.3
5.3
2.9
2.2
8.0
24.7
7.5
6.2
4.1
3.7
8.0
29.5
9.5
7.0
5.2
6.0
8.4
36.1
2001
2002
2003
RED VARIETALS (%)
11.0
12.4
13.0
7.3
7.2
6.8
6.0
6.6
6.7
7.5
8.4
8.6
8.8
9.2
10.2
40.6
43.8
45.3
Chardonnay
Chenin Blanc
Sauvignon Blanc
Others
TOTAL
5.8
30.1
5.5
36.7
78.1
6.4
28.7
5.5
34.7
75.3
6.4
26.8
5.7
31.6
70.5
6.4
24.1
5.7
27.7
63.9
WHITE VARIETALS (%)
6.3
6.4
6.8
22.3
20.6
19.6
6.1
6.7
6.9
24.7
22.5
21.4
59.4
56.2
54.7
Overall Total (%)
Total ha
Sultana (ha) *
100
87,301
10,902
100
89,935
11,044
100
92,601
11,578
100
93,656
11,910
100
94,412
11,919
100
96,233
11,765
2004
2005
2006
2007
2008
13.5
6.7
7
9.4
9.4
46.0
13.4
6.4
6.8
9.6
13.1
6.2
6.7
9.6
12.8
6
6.6
9.7
12.5
6
6.5
9.8
45.7
44.9
44.2
43.9
7.8
18.8
7.5
8
18.7
8.2
8.7
18.8
8.1
9
18.6
8.2
54.3
55.1
55.8
56.1
7.3
19.1
6.9
20.7
54.0
100
100
100
100
100
100
98,605 100,207 101,607 102,146 101,957 101,325
11,595 11,392 10,983 10,571
9,958
9,486
Source: www.sawis.co.za, 2009
Note: * Also used for raisins and table grapes
Most of South Africa’s production is consumed in the internal market. The majority of the remaining share goes to
United Kingdom and Germany, which together receive 47% of the total exports. Other markets such as Switzerland and
the Netherlands follow to a lesser degree. It is noteworthy that although the United States currently represents 4%, its
participation has been increasing.
GRAPH 9: PRIMARY DESTINATION MARKETS (2004, 2009)
TARGET MARKETS 2004
TARGET MARKETS 2009
Others 17%
Others 17%
Internal Consumption 47%
Russia 2%
Angola 3%
Sweden 4%
Netherlands 4%
Germany 9%
United Kingdom 14%
Source: www.sawis.co.za, 2009 – OEMV 2010 (www.oemv.es)
22
United States 2%
Denmark 2%
Sweden 5%
Netherlands 4%
Germany 9%
United Kingdom 17%
New Zealand
The following table presents the evolution of the primary indicators of New Zealand’s wine industry, which has doubled its
plantations in just six years. Its wine production has increased even more, and the industry has shown a strong development
in exports with an average annual growth rate of 33% in the past five years.
TABLE 15: EVOLUTION OF THE MOST IMPORTANT PARAMETERS IN THE NEW ZEALAND INDUSTRY
Years
2000
Number of Wineries
358
10,197
60
Exports
Bottled Wine
Volume (th / Lt)
Value (th / US$)
Totals
Volume (th / Lt)
19
Value (th / US$)
76
4
Imports
Volume (th / Lt)
29
2001
382
2002
398
2003
421
2004
463
2005
516
11,648
53
11
13,787
89
9
15,800
55
8
17,809
119
9
19,960
102
9
51
306
6
2006
530
2007
543
2008
585
22,616
25,355
29,310
133
148
205
11
12
12
11
56
10
324
6
5.8
-3
84
554
6.6
2009
643
31,057
205
14
92
10
576
4
6.3
-5
19
0
83
9
4.4
10
23
21
114
37
5
14
27
17
164
44
6.1
22
31
15
201
23
6.5
7
51
65
306
52
6
-8
58
14
333
9
5.7
-5
76
31
514
54
6.8
19
89
17
570
11
6.4
-6
113
27
629
10
5.6
-13
33
42
43
45
36
36
42
41
33
Source: www.nzwine.com, 2009
Table 16 presents the evolution of the relative importance of the different varietals planted, which shows a decrease in
the relative importance of Chardonnay with respect to Sauvignon Blanc and the increase in importance of Pinot Noir over
Cabernet Sauvignon.
23
TABLE 16: EVOLUTION OF SURFACE AREA PLANTED BY VARIETAL (NEW ZEALAND)
VARIETAL
Chardonnay
Sauvignon Blanc
Riesling
Pinot Gris
Cabernet Sauvignon
Pinot Noir
Merlot
Others
Total
Total hectares
2000
28%
24%
5%
1%
7%
11%
7%
17%
2001
28%
24%
4%
1%
6%
13%
8%
15%
2002
25%
27%
4%
2%
5%
15%
8%
15%
2003
22%
29%
4%
2%
5%
17%
8%
14%
2004
20%
33%
4%
2%
4%
18%
8%
10%
2005
19%
35%
4%
2%
3%
18%
8%
10%
2006
17%
39%
4%
3%
2%
18%
6%
10%
2007
15%
41%
3%
5%
2%
18%
6%
10%
2008
13%
48%
3%
5%
2%
16%
5%
9%
100%
10,197
100%
11,648
100%
13,787
100%
15,800
100%
17,809
100%
19,960
100%
22,616
100%
25,355
100%
29,310
Source: www.nzwine.com, 2009
New Zealand’s primary export markets for 2009 were Australia and the United Kingdom. It is important to note the evolution
of sales to foreign markets, which currently represent 70% of total sales, as opposed to the 34% that it represented in 2000.
It is also interesting to note that Australia, United Kingdom, and the United States reach 12%, 12%, and 7%; respectively.
GRAPH 10: EVOLUTION OF TARGET MARKETS (2000, 2009)
TARGET MARKETS 2000
TARGET MARKETS 2009
Others 19%
Internal Market 30%
Others 37%
Canada 1%
United States 2%
United Kingdom 10%
Internal Market 66%
Australia 2%
Canada 2%
United States 7%
Source: www.nzwine.com. 2009
24
United Kingdom 12%
Australia 12%
Argentina
With 211,261 hectares of vineyards, Argentina is the fifth largest wine producer. It exported 283 million liters in 2009, which
represents an increase of 32% over world’s 2008. The following table presents the evolution of the most relevant parameters
of the Argentine industry.
TABLE 17: EVOLUTION OF THE MOST IMPORTANT PARAMETERS IN THE ARGENTINE WINE INDUSTRY
Years
2000
Number of Wineries
188,398
1,249
Exports
Bottled Wine
Volume (th / Lt)
68,233
Value (th / US$)
113,137
1.66
Total Wine
Volume (th / Lt)
84,302
Value ( th / US$)
124,878
1.48
Imports
Volume (th / Lt)
5910.2
2001
2002
2003
2004
2005
2006
2007
2008
1,322
2009
1,341
204,133
1,204
207,985
1,270
1,199
210,529
1,251
1,234
199,719
1,454
1,111
205,021
1,423
1,197
208,936
1,447
1,110
211,231
1,415
1,117
211,261
1,377
1,068
1,067
1,034
72,498
6
138,257
22
1.91
15
55,340
-24
110,757
-20
2
5
88,512
60
145,592
31
1.64
-18
113,070
28
212,175
46
1.88
15
143,212
27
274,611
29
1.92
2
161,863
13
338,367
23
2.09
9
188,952
17
427,419
26
2.26
8
210,741
12
543,329
27
2.58
14
215,771
2
596,861
10
2.77
7
88,162
5
148,897
19
1.69
14
123,441
40
128,403
-14
1.04
-38
185,226
50
169,150
32
0.91
-13
155,339
-16
231,481
37
1.49
64
214,776
38
302,414
31
1.41
-5
293,425
37
379,397
25
1.29
-9
359,770
23
482,325
27
1.34
4
414,055
15
621,990
29
1.50
12
283,049
-32
630,836
1
2.20
47
6514.2
237.1
242.9
293.2
219.3
218.4
354.5
Source: National Vitivinicultural Institute, 2009 (www.inv.gov.ar)
The following table shows the evolution of hectares planted by type and varietal for three periods of time. Argentina has
consistently increased its plantations of red varietals, which have increased by 150% in 18 years, and in 2008 red varieties
were double the number of whites. Hectares planted to white varieties decreased by 21% during the same time frame. It is
important to note the relevance of rosé wines in the Argentine industry.
Malbec continues to be the most planted varietal (25% of all reds), although Cabernet Sauvignon and Syrah have also
increased significantly (18% and 13%, respectively).
Among the white varietals, Chardonnay has experienced the greatest growth.
25
TABLE 18: EVOLUTION OF SURFACE AREA PLANTED BY VARIETAL (ARGENTINA)
VARIETAL
REDS
Malbec
Bonarda
Cabernet Sauvignon
Syrah
Merlot
Tempranillo
Others
TOTAL
1990
2000
2004
2008
10,457
12,186
2,347
687
1,160
5,659
9,885
42,381
16,349
14,989
12,199
7,915
5,513
4,335
8,748
70,048
21,183
17,224
16,184
10,846
7,095
5,630
9,974
88,136
26,910
18,612
17,801
12,969
7,214
6,515
11,297
101,317
WHITES
Torrontés Riojano
Chardonnay
Chenin
Ugni Blanc
Sauvignon Blanc
Others
TOTAL
8,625
908
4,031
2,229
278
44,327
60,398
8,181
4,625
3,591
2,846
827
29,362
49,432
7,957
4,771
3,052
2,639
1,152
27,348
46,919
10,561
8,161
3,840
2,880
2,400
20,162
48,004
ROSÉS
Total
99,367
68,918
64,664
61,941
TOTAL
202,146
188,398
199,719
211,261
Source: National Vitivinicultural Institute, 2009 (www.inv.gov.ar)
The internal market continues to be the primary destination for Argentine production and represented 79% of the volume
sold in 2009. The remaining 21% is exported, in order of volume, primarily to the United States, Paraguay, Russia, United
Kingdom, Canada, Brazil, and South Africa. The most important markets in terms of value are the United States, United
Kingdom, Canada, Brazil, Netherlands, and Denmark.
GRAPH 11: TARGET MARKETS BY VOLUME (2004, 2009)
TARGET MARKETS 2004
TARGET MARKETS 2009
Others 10%
Brazil 1%
United Kingdom 1%
Russia 2%
Paraguay 2%
Canada 2%
United Kingdom 2%
Russia 2%
Paraguay 2%
United States 2%
Others 10%
United States 6%
Source: National Vitivinicultural Institute, 2009, (www.inv.gov.ar)
26
FRANCE
France continues to be the leading producer and consumer of wine worldwide. The following table shows a summary of the
primary French figures.
TABLE 19: EVOLUTION OF THE MOST IMPORTANT PARAMETERS OF THE FRENCH INDUSTRY
Years
Production (th / Lt)
Exports
Bottled Wine
Volume (th / Lt)
Value (th / US$)
Totals
Volume (th / Lt)
Value ( th / US$)
2002
2003
2004
2005
2006
2007
2008
2009
858
5,035
849
4,636
847
5,739
849
5,211
843
5,213
824
4,567
805
4,164
4,573
1,179
1,035
-12
4,188
17
4
33
989
-4
4,219
1
4.3
8
953
-4
4,067
-4
4.3
0
965
1
4,501
11
4.7
9
1,003
4
5,405
20
5.4
15
895
-11
6,067
12
6.8
26
817
-9
4,648
-23
5.7
-16
1,502
-3
6,598
22
4.40
26
1,425
-5
6,944
5
4.90
11
1,383
-3
6,960
0
5.00
2
1,472
6
7,868
13
5.30
6
1,515
3
9,248
18
6.10
15
1,370
-10
10,028
8
7.30
20
1,251
-9
7,682
-23
6.10
-16
3,570
3
1,554
5,426
3.50
Source: French Customs Service, UBIFRANCE / Agro-Food Department - France Agrimer Stats 2009
The following graph shows the importance of the different destination countries for French exports.
GRAPH 12: FRENCH EXPORTS BY TARGET COUNTRY (VALUE, 2008)
Others 26%
United Kingdom 21%
Germany 10%
Switzerland 5%
Canada 4%
Japan 6%
Russia 1%
United States 11%
Belgium 11%
Netherlands 5%
Source: Wines of Chile 2010, based on information from national generic offices
27
TABLE 20: FRENCH EXPORTS BY MAJOR APPELLATIONS
Champagne
Alsace
Beaujolais
Bordeaux
Burgundy
Rhone
Languedoc
VOLUME (THOUSANDS OF LT)
2007
2008
2009
110,958
102,078
79,845
23,529
23,430
21,704
40,688
35,900
31,127
194,066
179,475
154,788
79,556
66,516
55,719
69,998
63,873
59,947
55,845
56,517
54,849
VALUE (THOUSANDS OF US$)
2007
2008
2009
3,242,663 3,261,240 2,221,830
142,276
149,164
125,665
197,589
192,385
152,157
1,906,239 2,478,913 1,799,797
962,964
913,740
667,348
391,455
390,561
352,513
181,146
190,708
172,029
AVERAGE PRICE (US$ / CASE)
2007
2008
2009
263
288
250
54
57
52
44
48
44
88
124
105
109
124
108
50
55
53
29
30
28
Source: French Customs Service, UBIFRANCE / Agro-Food Department - France Agrimer Stats 2009
ITALY
Italy has a long tradition in the wine industry, and it reaffirmed its international importance in 2009 by maintaining second
place in production, exports, and consumption after France.
Italy’s commercial balance in the wine industry is historically positive. Despite the success of its exports, however, it has also
registered a significant increase in wine imports in recent years. Although it has a minor influence in the overall commercial
balance, it makes Italy one of the largest importers in the world.
It is interesting to note that Italian wine production has 470 appellations (denominations of origin), 316 of which are D.O.C.,
35 D.O.C.G., and 119 I.G.T. There are 650,000 wine companies, 25,000 bottlers, and 678,868 hectares planted to vine.
50% of the Italian wine production is controlled by cooperatives.
Its 2009 production was close to 46 million hectoliters, which is considerably lower than the average of the past five years.
With respect to the regions, 60% of the production is concentrated in 4 of the 15 producing regions: Veneto (17.33%),
Emilia Romagna (14.97%), Apulia (13.26%), and Sicily (12.49%).
The following table shows the primary figures of the Italian industry.
28
TABLE 21: EVOLUTION OF THE MOST IMPORTANT PARAMETERS OF THE ITALIAN INDUSTRY
Years
Production (th / Lt)
Exports
Bottled Wine
Volume (th / Lt)
Value (th / US$)
Totals
Volume (th / Lt)
Value ( th / US$)
Imports
Volume (th / Lt)
Value (th / US$)
2002
5,035
2,950
2003
4,636
2,880
2004
5,739
2,830
2005
5,211
2,702
2006
5,213
2,700
2007
4,567
2,790
2008
4,164
2,910
2009
4,550
882
1,017
15
3,093
6
3.04
-8
1,050
3
3,306
7
3.15
4
1,106
5
3,863
17
3.49
11
1,097
-1
4,207
9
3.83
10
1,127
3
3,860
-8
3.43
-10
1,609
13
3,732
5
2.32
-7
1,830
14
4,052
9
2.21
-5
1,883
3
4,854
20
2.58
17
1,751
-7
5,299
9
3.03
17
1,900
9
4,790
-10
2.52
-17
174
340
147
372
175
500
182
480
143
354
2,917
3.31
1,579
1,328
1,427
2,633
3,055
16
2.30
3,564
17
2.50
1.67
163
312
Source: OEMV (www.oemv.es), Global Trade Atlas
Italy’s internal market continues to be the primary destination for national wine production, and the primary target markets
by volume are Germany, the United Kingdom, and the United States.
GRAPH 13: EVOLUTION OF THE TARGET MARKETS BY VOLUME (2004, 2009)
TARGET MARKETS 2004
TARGET MARKETS 2009
Others 12%
Others 16%
United States 5%
United Kingdom 4%
United States 5%
United Kingdom 5%
Germany 12%
Germany 13%
Source: Global Trade Atlas, 2010
29
SPAIN
Although Spain has more areas planted to vine than any other country, it is the third largest producer with an average annual
production of 41.6 million hectoliters over the past five years. The following table presents the evolution of the most relevant
parameters for the Spanish wine industry. As can be observed, there is a downward trend in plantations, while both export
volume and value have increased (except in 2009, due to the crisis).
TABLE 22: EVOLUTION OF THE MOST IMPORTANT PARAMETERS IN THE SPANISH INDUSTRY
Years
2000
1,237
4,560
1,420
Exports
Bottled Wine
Volume (th / Lt)
Value (th / US$)
Total Wine
Volume (th / Lt)
902
Value (th / US$)
1,160
1.29
Imports
Volume (th / Lt)
Value (th / US$)
2001
2002
2003
2004
2005
2006
2007
2008
2009
1,211
3,390
1,420
1,202
4,050
1,380
1,207
4,930
1,380
1,200
5,010
1,390
1,180
4,110
1,380
1,174
4,370
1,370
1,169
4,050
1,340
1,130
4,130
1,260
1,078
3,800
1,130
553
504
-9
1,377
-13
2.73
-5
1,584
2.87
1,054
17
1,267
9
1.20
-7
1,037
-2
1,317
4
1.27
6
1,281
24
1,675
27
1.31
3
1,469
15
1,939
16
1.32
1
1,450
-1
1,967
1
1.36
3
1,434
-1
2,049
4
1.43
5
1,558
9
2,531
24
1.62
13
1,672
7
2,922
15
1.74
7
185
584
337
1,242
194
813
1,480
-11
2,387
-18
1.61
-7
* Production includes musts and others. Source: Spanish Wine Federation, 2009 (www.fev.es)
Germany continues to be Spain’s primary export destination, with a value of US$407 million. The United Kingdom follows with
15% and the US with 10%, while France, Netherlands, and Switzerland are also relevant markets.
30
TABLE 23: RELATIVE IMPORTANCE OF THE PRIMARY EXPORT DESTINATIONS BY VALUE
COUNTRY
Germany
United Kingdom
United States
France
Switzerland
Belgium
Portugal
Netherlands
Others
TOTAL WINE EXP.
2000
21%
16%
8%
5%
5%
2%
7%
6%
36%
100%
2004
20%
18%
10%
8%
5%
2%
3%
5%
29%
100%
2009
17%
15%
10%
7%
6%
5%
4%
4%
31%
100%
Source: Spanish Federation of Wine, 2009 (www.fev.es)
TABLE 24: SPANISH EXPORTS FOR THE MAJOR AUTONOMOUS COMMUNITIES (2007)
La Rioja
Catalonia
Basque Country
TH / US$
309
183
163
TH / LT
62
41
23
US$/CASE
44.62
39.79
62.66
Source: OEMV (www.oemv.es)
31
EVOLUTION OF THE CHILEAN INDUSTRY IN THE GLOBAL CONTEXT
Evolution of Exports
TABLE 25: VOLUME (THOUSANDS OF LITERS)
FRANCE BORDEAUX BURGUNDY
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
GROWTH RATE
1990–1999
2000–2009
ITALY
SPAIN AUSTRALIA
CHILE
UNITED
STATES
675
720
973
1,150
972
902
1,054
1,037
1,281
1,469
1,450
1,434
1,558
1,690
1,440
39
38
54
79
103
125
114
130
154
192
216
285
338
418
519
584
670
722
787
715
752
28
43
65
74
87
110
129
184
216
231
234
267
311
349
395
468
418
474
610
589
694
83
110
125
147
132
133
147
180
227
272
291
294
304
282
349
461
388
405
455
491
418
11%
5%
20%
14%
25%
12%
14%
5%
1,554
1,502
1,425
1,383
1,472
1,515
1,370
1,251
220
202
178
172
182
193
179
155
69
64
60
64
70
79
66
56
1,764
1,586
1,579
1,328
1,427
1,609
1,830
1,883
1,751
1,900
-3%
-5%
-2%
1%
Note: for those countries for which there is no available data, the average is calculated based on available years
32
SOUTH
AFRICA
NEW ARGENTINA
ZEALAND
110
117
128
141
177
217
238
268
281
272
313
412
430
4
4
6
7
9
8
8
11
13
15
17
19
19
23
27
31
51
58
76
89
113
45
28
23
25
23
197
112
120
109
88
84
88
123
185
155
215
293
360
414
283
8%
13%
16%
22%
72%
16%
GRAPH 14: VOLUME EXPORTED (THOUSANDS OF LITERS)
1.80
1.60
1.40
France
)UDQFLD
Bordeaux
)UDQFLD%RUGHDX[
Burgundy
%RUJRxD
%RUGHDX[
Italy
,WDOLD
%RUJRxD
Spain
,WDOLD (VSDxD
Australia
(VSDxD$XVWUDOLD
Chile
$XVWUDOLD
&KLOH
United States
&KLOH 86$
South Africa
86$ 6$
New Zealand
6$ 1=
Argentina
1= $UJHQWLQD
$UJHQWLQD
1.20
1.00
80
60
40
20
0
2000
2001
2002
2003
2004
2005
2006
2007
2008 2009
33
TABLE 26: VALUE (THOUSANDS OF US$)
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
ITALY
SPAIN AUSTRALIA
CHILE
UNITED
STATES
996
1,115
1,230
1,397
1,441
1,160
1,267
1,317
1,675
1,939
1,967
2,049
2,531
2,933
2,387
91
95
140
179
199
268
286
369
448
515
622
795
906
1,143
1,571
1,834
2,069
2,075
2,407
2,241
1,931
35
52
84
119
129
143
182
293
412
503
526
573
593
602
671
835
877
962
1,256
1,376
1,381
98
137
153
181
182
196
241
326
425
537
560
547
541
549
621
809
674
876
955
1,008
911
10%
6%
22%
13%
33%
11%
20%
6%
5,426
6,598
6,944
6,960
7,868
9,248
10,028
7,682
1,198
1,560
1,341
1,284
1,613
1,896
2,479
1,800
516
558
652
665
725
961
910
667
2,291
2,345
2,633
3,055
3,564
3,732
4,052
4,854
5,299
4,790
6%
8%
5%
9%
SOUTH
AFRICA
NEW ARGENTINA
ZEALAND
174
184
201
244
228
286
417
534
597
525
671
630
767
11
15
19
26
25
27
41
50
52
66
76
83
114
164
201
306
333
514
570
629
15
18
22
25
24
61
66
119
140
117
125
149
128
169
231
302
379
482
622
631
8%
15%
23%
26%
33%
21%
GROWTH RATE
1990–1999
2000–2009
34
GRAPH 15: VALUE EXPORTED (THOUSANDS OF LITERS)
12000
10000
France
)UDQFLD
Bordeaux
)UDQFLD %RUGHDX[
Burgundy
%RUJRxD
%RUGHDX[
Italy
%RUJRxD,WDOLD
(VSDxD
,WDOLD Spain
Australia
(VSDxD $XVWUDOLD
Chile
$XVWUDOLD&KLOH
United States
&KLOH 86$
South Africa
86$ 6$
New Zealand
6$
1=
Argentina
1=
$UJHQWLQD
$UJHQWLQD
8000
6000
4000
2000
0
2000
2001
2002
2003
2004
2005 2006
2007 2008 2009
35
TABLE 27: AVERAGE PRICE (US$ / LITER)
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
ITALY
SPAIN AUSTRALIA
CHILE
UNITED
STATES
1.47
1.55
1.26
1.21
1.48
1.29
1.20
1.27
1.31
1.32
1.36
1.43
1.62
1.74
1.66
2.32
2.48
2.58
2.27
1.94
2.13
2.51
2.84
2.90
2.68
2.88
2.79
2.68
2.73
3.03
3.14
3.09
2.87
3.06
3.13
2.57
1.25
1.20
1.30
1.61
1.48
1.31
1.41
1.59
1.91
2.18
2.25
2.15
1.91
1.73
1.70
1.79
2.10
2.03
2.06
2.34
1.99
1.18
1.25
1.22
1.23
1.38
1.47
1.64
1.81
1.87
1.97
1.93
1.86
1.78
1.95
1.78
1.75
1.74
2.17
2.10
2.05
2.18
1%
1%
3%
-1%
7%
-1%
5%
2%
3.49
4.39
4.87
5.03
5.35
6.10
7.32
6.14
5.44
7.70
7.53
7.48
8.85
9.82
13.81
11.63
7.48
8.76
10.91
10.42
10.43
12.10
13.72
11.98
1.30
1.48
1.67
2.30
2.50
2.32
2.21
2.58
3.03
2.52
9%
13%
8%
9%
SOUTH
AFRICA
NEW ARGENTINA
ZEALAND
1.58
1.57
1.58
1.73
1.29
1.31
1.75
1.99
2.12
1.93
2.15
1.53
1.78
2.74
2.61
2.63
3.05
3.13
3.44
3.76
3.85
3.46
3.99
4.03
4.33
4.98
6.05
6.46
5.96
5.76
6.76
6.43
5.58
0.34
0.64
0.97
0.98
1.04
0.31
0.59
0.99
1.29
1.33
1.48
1.69
1.04
0.91
1.49
1.41
1.29
1.34
1.50
2.23
0%
3%
5%
4%
30%
9%
GROWTH RATE
1990–1999
2000–2009
36
GRAPH 16: AVERAGE PRICE (US$ / LITER)
16.00
14.00
12.00
France
)UDQFLD
Bordeaux
)UDQFLD%RUGHDX[
Burgundy
%RUJRxD
%RUGHDX[
Italy
,WDOLD
%RUJRxD
Spain
,WDOLD (VSDxD
Australia
(VSDxD$XVWUDOLD
Chile
$XVWUDOLD
&KLOH
United States
&KLOH 86$
South Africa
86$ 6$
New Zealand
6$ 1=
Argentina
1= $UJHQWLQD
$UJHQWLQD
10.00
8.00
6.00
4.00
2.00
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
37
Generic Investment
The following table presents a summary of the generic investment of wine producing countries. Annex 2 presents more
detailed information on how each organization is funded.
GRAPH 17: GENERIC INVESTMENT (US$ / LITER)
0.60
0.564
0.50
0.40
0.351
0.346
0.321
0.30
0.293
0.231
0.20
0.151
0.10
0.141
0
France
New Zealand
Wine
Growers
Spain
Wines of
California
Wines of
Argentina
Wines
Australia
Wines
of South
Africa
TABLE 28: GENERIC INVESTMENT IN THE UNITED STATES (2009)
COUNTRY
ESTIMATED BUDGET (TH / US$)
France
10.9
Sopexa
2.5
Bordeaux
3.5
Beaujolais
0.5
Rhone
2.5
Alsace
0.6
Languedoc
0.3
Loire
1.0
Spain
6.0
Wines of Spain
2.0
Rioja
4.0
Argentina
1.9
New Zealand
1.5
Chile
1.1
Australia
1.0
38
Wines
of Chile
CONSUMERS
Wine Consumers
According to our agents in the Chilean industry’s primary target markets (United States, United Kingdom, and Canada) the
main consumer-level trends in those markets are:
• A change in consumer habits. The new consumers are intelligent, they seek good value, and spend more time
socializing at home, especially as a result of the economic crisis. They are trading down for personal consumption,
but trading up with friends and family. For example, 53% of the consumers in the United States are dining at
home more often. Television food channels and food-related blogs are increasing in popularity. Once the crisis has
passed, we can expect that these consumers will return to higher priced wines, although they will not reach the
same levels they did in the late 1990s and early 2000s.
• A new segment has appeared. The “Millennials” are consumers from 21 to 29 years of age and represent
70 million consumers in the United States alone. 40% of the wine they drink is imported. They learn and
communicate on-line. These new consumers drive the new trends.
• Consumers will have greater access to a broader range of wines through new products and distribution channels,
such as on-line sales.
• Consumers are increasingly more sophisticated and informed. They seek out natural, sustainable, and organic
products.
• New trends lean toward wines with lower alcohol levels and a greater consumption of white and rosé wines.
• Social networks (Facebook, Twitter, and blogs) are increasingly important and allow low-cost, high-frequency
communication with bloggers and consumers around the world.
Image of Chile in Target Consumer Market
The most relevant variables for mass consumers of the most important markets for our industry are Varietal, Promotions,
Recommendations, and Origin (country or region).
TABLE 29: RELEVANT VARIABLES AT TIME OF WINE PURCHASE
Variety
Promotional offer
Recommendation of friends or family
Country of origin
Region of origin
Recognized brand
Alcohol level
Recommendation from store personnel
Bottle appearance or label design
Medal or Award
% “IMPORTANT OR VERY IMPORTANT”
UNITED KINGDOM
UNITED STATES
79%
73%
65%
51%
63%
71%
60%
47%
57%
47%
54%
69%
33%
33%
29%
52%
26%
33%
21%
21%
Source: Vinitrac, 2009
39
TABLE 30: COUNTRY AFFINITY (WITH PEOPLE, CULTURE, OR OTHER)
% OF POSITIVE OR VERY POSITIVE RESPONSES
UNITED STATES
UNITED KINGDOM
73%
78%
71%
66%
61%
70%
56%
62%
nd
47%
49%
38%
46%
56%
43%
47%
32%
28%
29%
35%
21%
39%
Australia
Italy
New Zealand
Spain
United States
Germany
France
Portugal
Argentina
Chile
South Africa
Source: Vinitrac, 2009
Consumers in the United States and United Kingdom have a low affinity with Chile, which is not true of Australia, New
Zealand, Italy, and France. This is consistent with the country image studies that conclude that Chile has a neutral or nil
image among international consumers at the mass level. This implies that for mass consumers, Chilean wine is a product
of unknown origin.
We also discovered that although higher-income and more frequent wine consumers from the United States drink Chilean
wines, they have a low affinity with the country. The cases of Italy and Australia stand out in that there is coherence between
the positive perception of the country and regular consumption of wines from those regions.
30%
25%
There is a significant and moderate relationship
y=0,376x - 0,041
R2=0,547
Italy
Australia
France
20%
15%
Germany
10%
Spain
Chile
New Zealand
Argentina
5%
SA
Portugal
80
70
60
50
40
30
20
%
10
% answering “I drink named country once a month or more”
GRAPH 18: US RELATIONSHIPS BETWEEN VIEWS ABOUT NAMED COUNTRY AND WINE FREQUENCY OF CONSUMPTION
% answering “I have Positive -or Very Positive” views about named country
Source: Vinitrac® US, Dec 07; Base=US regular wine drinkers n= 2,015
Therefore, not only is our origin unknown for mass consumers, it is also relatively irrelevant for regular consumers.
40
SWOT ANALYSIS (STRENGTHS, WEAKNESSES, OPPORTUNITIES,
AND THREATS) OF THE CHILEAN WINE OFFER
Strengths
• High potential for sustainable agriculture due to extraordinary phytosanitary and climatic conditions.
• Carmenere as a unique and differentiating element.
• Exceptional agro-climatic conditions allow for the development of a broad diversity of terroirs and
varieties with fruit characterized by a very good concentration of aromatic components, acidity, and color.
• Excellent quality and high consistency in the wines.
• Excellent price-to-quality ratio in every price segment.
• Talent and quick ability for adaptation.
• Chile is a reliable commercial partner, a country that is open to the world, with stable economic
and commercial policies, as well as a broad network of free trade agreements with all of its primary
commercial partners.
• High diversification of target markets resulting from a committed industry focused on developing its
capacities as an exporter.
Weaknesses
• No existing country image, which makes us a product of unknown origin.
• Image as producers of good quality, low-priced wines.
• Excessively homogenous labeling that lacks clear category differentiation with inconsistent
denominations of quality.
• Wines with naturally high alcohol levels in a context of growing concern for controlling alcohol
consumption in our primary markets.
• Low level of penetration in the premium on-trade segment.
• The industry has a comparatively low level of financing and a limited structure for generic promotion,
which hinders the entrance into relevant markets.
• Chile’s distance from the primary world markets, such as Europe and Asia.
Opportunities
• Consumers value unique and differentiating products.
• Growing consumer preference for products originating from clean agriculture that are environmentally
sustainable and socially responsible.
• There is a strong connection between the Country Image and the Category Image. Chile’s image is still a
blank page, a story waiting to be told.
• Educated and informed consumers are willing to drink premium Chilean wines and recognize their
excellent quality. That validation can come from traditional sources of influence, recommendations from
social networks, friends, or direct experience.
41
• The new post-crisis consumers are intelligent and well-informed and seek value (price-quality ratio).
• There is a growing interest in products associated with Latin culture.
• There is a trend toward the consumption of wines with lower alcohol levels and an increasing preference
for fresh wines.
• Consumers, especially the Millennials, are more sophisticated and willing to explore new alternatives.
• The explosion of social networks allows for high frequency, low cost communication and direct interaction
with consumers around the world.
• Consumers value products that offer value through better or more attractive bottles, labels, closures,
freshness, and product duration.
• Greater development of the internal market will contribute to a lower dependency on the type of exchange
and a greater development of the sector.
• Emerging development of the Asian market, primarily due to the strong growth of China’s middle class
and the region’s low per capita consumption.
Threats
• Growing competition from New and Old World producing countries such as Argentina, Spain, and
New Zealand with more aggressive programs in terms of price and/or promotion.
• Non-tariff barriers and increased taxes in the category in the major consumer markets.
• Excessive growth of bulk wines would make it difficult to improve the category image.
• The strengthening of the Chilean peso decreases the competitiveness of the Chilean wine industry.
• The increase in world production and a relatively constant level of consumption could lead to more
aggressive discounting strategies.
• Potential for a failure of the industry to align itself with the strategy.
42
43
VISION & MISSION
VISION OF THE CHILEAN WINE INDUSTRY
To become the number one producer of sustainable and diverse premium wines from the New World by 2020, reaching exports
of bottled wines of US$3 billion.
MISSION
To strengthen the image and recognition of Chilean wines in international markets by increasing the value of the “Wines of
Chile” brand, thus elevating the average price, sales, and added value for all Chilean wine industry stakeholders, including
small and large growers, suppliers, wineries, and exporters.
45
POSITIONING
COMPETITIVE ENVIRONMENT
Our most important competitors will be New and Old World wine producers, and the benchmark will always be the most
relevant country or countries in each target market.
• Our primary New World competitors are the United States, Australia, Argentina, New Zealand, and South Africa.
• Our closest Old World competitors are France, Italy, and Spain.
COMMUNICATIONS TARGET
• Opinion leaders and gatekeepers: specialized press, importers, distributors, on- and off-trade buyers, sommeliers,
and lifestyle writers.
• Wine lovers: interested in wine without necessarily being experts. They value ‘naturalness’ and purity in their wines;
they enjoy discovering new wines and appreciate a good price-quality ratio (good value). They enjoy sharing their
discoveries with friends and family, appreciate good quality of life, are young in spirit, and enjoy the ‘Latin flare.’
• Target consumers: young professionals from the top five wine consumer markets and slightly skewed toward a female
public. They are Millennials, aspirational but not pretentious, include people between 21 and 45 years of age, and
have medium to high income levels.
INSIGHT
Consumers seeking premium and superior wines are faced with too many alternatives from a wide range of origins; they are
overwhelmed by a very broad selection of wines that seem very similar and lack sufficient differentiation one from the other.
BENEFITS
Chile offers premium and superior wines of exceptional quality that are diverse and sustainable with a unique consistency
and availability and with the best price-to-quality ratio in the world.
47
VALUES AND PERSONALITY
•
•
•
•
•
•
•
•
•
•
Diversity
Sustainability
Consistent, Superior Quality
Integrity
Latin Flare
Accessibility
Leadership
Innovation
Modernity
Centuries of Tradition
ESSENCE
“The best of the New World for the entire world.”
UNIQUE SELLING PROPOSITION
Wines of Chile offers unique sustainable premium quality and diversity, ranging from cool climate to full-bodied fruity wines,
with consistent high quality and value.
TAG LINE
The following tag line was developed to reinforce the differentiating attributes of the desired positioning:
“Wines of Chile – The Natural Choice”
48
STRATEGIC PILLARS
Diversity & Quality
One of Chile’s greatest strengths is its ability to produce a broad range of high quality wine varieties and styles as a result
of its geographic diversity, privileged climates, and soils that stand out in the viticultural world. Its 14 distinct wine regions
extend 1,200 kilometers (745 miles) from north to south and have a combination of both coastal and Andean influences as
well as perfect climatic conditions for producing high quality, healthy grapes.
Elqui Valley
Limarí Valley
Choapa Valley
Aconcagua Valley
Casablanca Valley
San Antonio Valley
Maipo Valley
Cachapoal Valley
Colchagua Valley
}
Rapel Valley
Curicó Valley
Maule Valley
Itata Valley
Bío Bío Valley
Malleco Valley
49
Chile has exceptional climatic conditions for crop growth, such as scant rainfall during the growing season from December
through the harvest, which allows for excellent grape ripening and healthy fruit with less danger of botrytis, and a broad
daily temperature variation that encourages the concentration of aromatic components, especially in the grape skins, which
in turn helps to obtain very high quality and intensely colored grapes.
Source: Origo Ediciones
In summary, Chile’s privileged agro-climatic conditions make it a vitivinicultural paradise.
Chile has an offer of quality with great potential for growth and sales, especially for Cabernet Sauvignon, Carmenere,
Sauvignon Blanc, the cool-climate red varietals Pinot Noir and Syrah, and wines from old vines, such as Carignan. All of
these varieties offer high quality, diversity, and excellent price to quality ratio in every price range.
The industry should focus on continuous improvements in quality, a process that has been evident in the development and
offer of Chilean wines over the last ten years. Buyers and consumers now recognize and appreciate the consistency and
excellent price-quality ratio in every price range of Chilean wine, which must be maintained and strengthened.
The justification and potential for each of these varieties will be presented in detail in section on Market Level Strategies
(p 62).
50
Sustainability
Chile is known for its privileged climate and a unique geography that combine to provide excellent conditions for growing
grapes in a highly natural environment. However, not only does the Chilean wine industry wish to lead the way in creating a
sustainable environment and setting examples for future generations of winemakers, it also wants to demonstrate this in a
tangible way that can be understood by consumers.
To this end, the industry has been working on a Sustainability Program for the Chilean Wine Industry under the auspices of
Vinos de Chile and the Vinnova and TecnoVid Technical Consortiums.
For Chile sustainability in the wine industry goes beyond sustainable viticulture. Sustainability means recognizing wine
as part of a complete system that is not confined to the vineyard but that encompasses the winery, the employees, and
the local community. The Wines of Chile Sustainability Program is a series of initiatives and projects that are intended to
establish the sustainability of Chile’s wine industry, which is understood as the convergence of production processes that
are environmentally friendly, socially equitable, and economically viable.
The program includes establishing a National Sustainability Code, accompanied by a series of specific projects that address
key areas of sustainability. This Code is the cornerstone of the Sustainability Program. The system establishes the framework
for the entire value chain of wine production and identifies the different practices that foster sustainability in each link of
the chain. The Code establishes a common framework to guide all of our wineries toward increasingly sustainable practices.
This Code will offer wineries the opportunity to measure their progress toward the use of more sustainable practices through
recognized and validated accreditation or certification.
Ensuring sustainability involves measuring traceability from ‘vineyard to glass’ as well as creating rules and environmentally
friendly solutions that are measurable and acceptable to the wine trade as a whole using independent, third-party evaluation
and certification. An official logo will be created and used to provide tangible evidence that will help assure consumers of
Chilean wine the world over that Chile makes natural wines in a responsible manner.
The initiative began in April 2010 and includes projects to approach the complete concept of sustainability. The program
includes:
a.
b.
The Chilean Code for Sustainable Wine Production
Projects related to key topics of the Code:
i.
Energy Efficiency, Climate Change, and the Carbon Footprint
ii.
Corporate Social Responsibility
1.
Vinos de Chile Guide for Preparing Sustainability Reports
2.
Vinos de Chile member winery Sustainability Reports
a. Chilean Code for Sustainable Wine Production
Under the auspices of Vinos de Chile and the Vinnova and TecnoVid technical consortiums, the University of Talca has been
developing a Chilean code for sustainable wine production, a process that began in September 2008 with a number of
Colchagua Valley wineries.
51
The challenges faced by all winemakers world-wide are:
• Maximizing the production of high quality grapes at a reasonable cost;
• Improving system efficiency with little or no use of chemicals, fertilizers, and labor;
• Caring for the environment and the employees; and
• Working carefully and responsibly with the local community.
Most vineyards in Chile are farmed conventionally, but an increasing number are converting to organic and even biodynamic
principles. However, full certification of these processes can be costly and time consuming, and it is clear that consumers
are not completely aware of the precise meaning of organic wine. Therefore, an integrated method is encouraged that aims
to provide high quality fruit by giving priority to ecologically safer production methods, minimizing the undesirable effects
of using agro-chemicals and improving environmental and community safeguards.
The industry mantra is that wine production should be environmentally friendly, economically viable, and socially equitable.
Sustainable means recognizing wine as part of a system that is not confined to the vineyard but rather encompasses the
winery, the employees, and the local community.
Ensuring sustainability involves measuring traceability ‘from the vineyard to the glass’ and creating rules and environmentally
friendly solutions that are both measurable and accepted by the market using independent, third-party evaluations
and certifications.
The National Sustainability Code being created within the Chilean wine industry consists of three chapters:
• The Green Chapter covers activity in the vineyard itself and the viticultural practices used. It incorporates areas
such as cover crops, pruning, soil nutrition, irrigation, and pest management, etc.
• The Red Chapter covers activity in the winery, offices, and surroundings and monitors winemaking practices,
energy efficiency, water conservation, and solid and liquid waste management.
• The Orange Chapter covers air quality, human resources, and the relationship and interaction with neighbors
and the local community.
A number of protocols are being developed using these three areas of monitoring, and wineries will be given mean scores
based on how they perform against these criteria. If they score above a given minimum level they will be entitled to use the
Sustainability Seal of Approval.
As part of the research process, 31 wineries from throughout the country were tested on the Green Chapter criteria in 2009,
with very positive results and the majority scoring well above the ‘ideal’ level.
The Red and Orange Chapters will be reviewed in 2010, which will lead to the production of a working manual for winegrowers
and for future consultation. Subsequently a third-party certification scheme will be developed and implemented, and finally
an official logo will be created and used as tangible evidence that will help to assure consumers of Chilean wine the world
over that Chile makes natural wines responsibly.
52
b. Projects Related to Specific Topics of the Code
The Code also includes specific projects in the most relevant areas that it covers as a means of reaching concrete advances
over the short and medium term.
i. Energy Efficiency, Climate Change and the Carbon Footprint.
The first topic chosen was energy efficiency in the winery and the carbon footprint, and a guide was prepared in September
2009 to help the wineries improve their energy efficiency and quantify their carbon footprints. This has helped Vinos de Chile
member wineries take the first step toward quantifying their carbon footprint and gradually work toward its improvement.
ii. Corporate Social Responsibility.
The second topic chosen was Corporate Social Responsibility (CSR), and the Vinos de Chile Guide for Preparing Sustainability
Reports was released in April 2010 using the Global Report Initiative (GRI) methodology that adheres to international
standards. This guide was prepared with a consultant recognized by the GRI.
To complete the process at the winery level, the consortiums undertook a project in conjunction with the recognized consultant
to prepare the Sustainability Reports for Vinos de Chile members. The project received governmental support, which will
make it possible to provide training so the member wineries can prepare their Sustainability Reports using GRI methodology.
This project began in April 2010.
Country Image
Studies that analyze consumers’ decision-making processes when purchasing wine in different markets consistently show
that the enormous diversity of brands results in ORIGIN playing the role of the brand as a differentiator of quality. This
phenomenon is particularly true when deciding to buy premium wines. It is crucial for Chile to sell more expensive wine, and
to do so, it must have an image. Therefore, our possibility for continued growth greatly depends on how successful we are in
positioning and strengthening both the Country Image as well as the category “Wines of Chile.”
Wine is Chile’s most emblematic product, the one that allows Brand Chile to reach millions of consumers’ homes in 150
countries and thereby contributes to a positive recall of Chile.
Because Chilean wine is so strongly oriented toward the external market, it has become the country’s primary ambassador
and a unique vehicle for positioning the country image, which is understood as a strategic asset for the country and a
facilitator in the introduction of new products.
A good wine is associated with a country that is touristically attractive and that has high-quality cuisine, good agricultural
practices, an identity, tradition, and sociable people who know how to have a good time and take advantage of the essential
moments of life. Therefore, better development of the “Wines of Chile” category in the target markets means more and better
positioning for Chile among the consumers in those markets.
In this sense, there is a very high inter-relationship between the country image and the development of the “Wines of Chile”
category. Each category—“Wines of Chile” and the “Country Image”—contributes to the development of the other, and the
two should work in conjunction toward positioning and developing each other.
53
“WINES OF CHILE”
IMAGE
COUNTRY
IMAGE
There is consensus in that the promotion of the image of Chile is a still-pending task that has just recently begun to be
approached seriously and systematically through the creation of the Imagen de Chile Foundation in late 2009. Vinos de
Chile values this important effort and actively supports its initiatives by integrating and coordinating its strategies and
promotional programs into the generic efforts of developing the country image.
Country Image & Wine Tourism
There is no country with a strong and attractive country image that does not actively promote itself as a tourism destination.
In consequence, tourism should be a central component of the efforts made to promote Chile’s country image. The different
sectors should encourage more knowledge of and interest in Chile as a tourism destination and creatively promote the
national offer of wine and foods. In this context, wine tourism presents tremendous potential by bringing the development of
the country image, tourism, and wine together synergistically, and as such it should be proactively developed by the wineries
and tour operators.
The changes in tourism that have taken place in recent years have made possible the appearance of new options that go
far beyond the traditional sun and beach destinations to generate complementary routes to wealth and the creation of
employment. Therefore, in addition to the classic interior cultural or rural destinations, new products are now emerging in
response to the demands of certain sectors of the population. These new trends have brought about the creation of tourism
routes, among which the wine routes stand out. Wine and tourism—which includes local gastronomy—operate in perfect
symbiosis to provide visitors with the opportunity to experience a different type of tourism product, promote the economic
development of Chile’s wine regions through both cellar door wine sales and the business opportunities that arise.
Wine tourism presents a complete sensorial experience that includes the pleasure of the aroma, flavor, feel, sight, and even
sound of the wine. Any wine tourist, regardless of any prior knowledge of winemaking, can appreciate the palate of the
different wines, the smell of the cellars, the way of holding a glass to taste a wine, the overall appearance of the winery,
whether modern or traditional, or the sound of the cork being pulled from a good bottle of wine.
54
The clusterization of activities and attractions, as well as the development and promotion of tourism routes, stimulates
cooperation and relationships among the different companies in rural areas. Tourism is therefore an alternative for employing
strategies for economic and social development and regeneration in rural areas.
As a model for sustainable economic and integrating development in specific areas, wine tourism is able to energize the
competition in a given territory, increase and improve vitivinicultural production, respect the environment, and improve the
living conditions of the local people.
Furthermore, actively developing wine tourism allows for the diversification of sources of income and reduces the risks in the
wine industry. It also particularly benefits the small and medium-sized companies that represent 68% of the wineries that
offer some type of wine tourism.
Finally, high quality wine tourism in which wine and culture are incentives for making the shift allow for increasing wine
consumption and wine tourism in the domestic market.
Innovation
The industry has grown substantially over the years and has invested heavily in innovation and technology for decades to
improve its production processes and standards. The results are reflected in the superior quality shown in our wines year
after year in the different competitions and specialized publications.
The industry is aware that maintaining a privileged place in the international context largely depends upon its ability to
continuously innovate, create, and adopt new technologies. This prompted the wineries to associate with the universities
in 2006 to create a unique institution of their own to make strides in the route to innovation. The Vinnova and Tecnovid
technological consortiums are entities whose objective is to develop R&D projects that meet the needs of the wineries. These
projects will be carried out by the technical experts from the universities in conjunction with the wineries and the results
transfered to the sector for their prompt adoption.
As the result of this trade unification, the Vinnova and Tecnovid technical consortiums work together, along with Chile’s five
major universities and more than 70 multidisciplinary researchers and in conjunction with all of the wineries. They began
with US$10 million for five years and 24 projects that covered all of the areas, including viticulture, enology, environment,
and marketing. The investment has increased in the past year and the project has been renewed for a second term.
The needs of this second stage—the Consortium 2.0—have already been determined by defining a strategic agenda for
innovation with the wineries. The primary lines identified are genetic resources, sustainability, terroir, consumer preferences,
and market intelligence. The new R&D projects are based on the same lines and incorporate major strategic alliances for
collaboration, such as those made with the University of California at Davis and the Australian Wine Research Institute.
The industry aims to be a source of innovation and competition by continuously strengthening the technological consortiums
as a new model of innovation.
Furthermore, the relevant norms and regulations in our target markets as well as the technologies for analysis and
technical training needed will be monitored continuously in order to fully comply with the requirements in those markets.
The technological consortiums will play a key role developing the necessary innovations and technological transfers.
55
STRATEGIC PLAN 2020
GENERAL STRATEGIC OBJECTIVE
Our objective is to grow at an annual average rate of 9.2% in value to reach the goal of US$3 billion in exports of bottled
wine (FOB value) by 2020. This goal is based on the opportunities we see in the international market and supported by our
historical growth presented in the table below.
GRAPH 19: AVERAGE ANNUAL GROWTH OF BOTTLED WINE (VALUE)
35
33%
31%
30
25
20
15
10%
10
11%
9.2%
5
0
Growth
1990–1994
Growth
1995–1999
Growth
2000–2004
Growth
2005–2009
Projected Growth
2010–2020
Source: Wines of Chile, 2010, based on information from Chilean Customs Office
GRAPH 20: EVOLUTION OF HISTORIC & PROJECTED VALUE OF EXPORTS OF BOTTLED WINE (US$)
3,500,000,000
3,000,000,000
2,500,000,000
2,000,000,000
1,500,000,000
1,000,000,000
500,000,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
57
The following table summarizes the situation at year-end 2009 and the objectives proposed for the industry for 2020.
TABLE 31: YEAR-END 2009 AND PROPOSED OBJECTIVES FOR 2020
OBJECTIVES
Export Value (bottled wines)
Annual Growth in Export Value
2009
US$1.139 billion
2020
US$3 billion
9.21%
Source: Wines of Chile, 2009
We have analyzed three alternatives for reaching the proposed goal that involve the following requirements with respect to
volume and hectares:
ALTERNATIVES
GROWTH RATE
FINAL PRICE
FINAL EXPORT
GROWTH RATE
REQUIRED
REQUIRED
TOTAL HECTARES
OF AVERAGE PRICE
US$/CASE
VOLUME (LT)
OF AVERAGE
KILOGRAMS
HECTARES FOR
REQUIRED/
VOLUME EXPORTED
1. Volume Growth: High
Price Growth: Low
EXPORT GROWTH INTERNAL MARKET
1.30%
30.86
97,205,360
7.8%
1,229,161,772
120,011
167,755
2. Volume Growth: Moderate
Price Growth: Moderate
3.00%
37.06
80,943,996
6.0%
1,023,536,825
99,940
147,677
3. Volume Growth: Low
Price Growth: High
43.45
69,042,247
4.5%
873,039,210
85,245
132,982
4.50%
In addition to the number of hectares required for each alternative, we have added the hectares necessary to supply
the internal market, assuming a conservative 1% increase in the internal market per year, similar to the growth in the
national population.
Therefore, if we assume a 1.3% annual growth in price (similar to that of the past 11 years), the volume must grow by a rate
of 7.8% per year and reach 97.2 million cases in order to reach the proposed goal by 2020. Converting this to kilograms at a
conversion rate of 1.4 kg/Lt results in a need for 1.229 billion kg, which requires 120,000 hectares (the average annual yield
for the past five years has been 10,200 kg/ha). Adding this land to the 48,000 needed for the internal market lends a total of
167,000 hectares, 46,000 more than the current total. The requirements included are specifically to cover the requirements
of bottled wine and the internal market, without including bulk or other areas.
A slightly more aggressive growth in prices would generate a lower growth in volume, and so on.
The following chart analyzes the minimum investment in fixed assets required for each alternative, assuming that the
current export of bulk wine and the capacity associated with it will be converted to the production and export of bottled wine:
58
ALTERNATIVE
REQUIREMENTS
INVESTMENT
1. Volume Growth: High
Price Growth: Low
46,755 additional hectares
213,000 liters
8% of sales in marketing
2. Volume Growth: Moderate
Price Growth: Moderate
26,677 additional hectares
67,000 liters
3. Volume Growth: Low
Price Growth: High
Fixed Assets (one time):
Land & Planting: US$1.636 billion
Winery: US$320 million
Marketing (additional annual investment
by 2020) US$240 million
Fixed Assets (one time):
Fixed assets: US$934 million
Winery: US$100 million
by 2020) US$300 millon
by 2020) US$450 million
Note: Cost per hectare = US$30,000 (US$20,000 for land + US$10,000 for planting). Winery = US$1.50/Lt.
It is important to emphasize that the industry’s current average investment in marketing with respect to sales is 7%.
Alternative Number 1 requires the greatest investment and generates the least added value for the industry and therefore is
not considered attractive. Although Alternative Number 3 requires a lower total investment, we believe that it is not feasible
due to the current country image and positioning of our wines in the world context. Therefore, we consider Alternative
Number 2 to be the most pertinent, with more reasonable requirements in volume and hectares. This alternative involves
an approximate annual growth of 2,400 hectares per year for the next 11 years, or the equivalent of 1.9% of the current
area planted. This increase is less than that of the past seven years, which is equivalent of 2.16%. Furthermore, we should
also consider the potential conversion of vineyards currently dedicated to bulk wine or alternatively additional plantations.
The following graph shows the historic and projected average growth in price and volume of bottled wine exports in
accordance with the chosen scenario (Alternative Number 2: Moderate Growth in Price and Volume).
GRAPH 21: AVERAGE GROWTH OF BOTTLED WINE (AVERAGE VOLUME AND PRICE)
24.3%
24
20
16
12
08
9.2%
6.3%
6.1%
04
1.02%
3.0%
00
Growth
1990-1999
Growth
2000-2009
Projected Growth
2010-2020
Volume
Average Price
59
In summary, the chosen alternative implies the following evolution in each valuable (Value, Volume, and Average Price).
GRAPH 22: VALUE (MILLIONS US$)
4,000
3,000
3,000
2,000
1,139
1,000
0
495
44
1990
2000
2009
2020
GRAPH 23: VOLUME (MILLIONS OF CASES)
100
80.9
80
60
42.5
40
20.6
20
0
3.1
1990
2000
2009
2020
GRAPH 24: AVERAGE PRICE (US$ / CASE)
40
37.1
30
20
25.3
26.8
18.2
10
0
1990
2000
60
2009
2020
SPECIFIC STRATEGIC OBJECTIVES
Corporate Level Objectives
• Align the industry behind a unified message and strategy.
• Provide Wines of Chile (WoC) with the necessary resources to effectively and efficiently achieve the
proposed objectives.
• Identify and correct gaps that inhibit competitiveness.
• Consolidate WoC as the representative of the Chilean wine industry, integrating the interests and
needs of all of the parties involved in the industry.
Market Level Objectives
•
•
•
•
•
Create and clearly communicate a unique and differentiating identity for the category.
Develop a more aggressive and focused investment plan with greater impact in target markets.
Position “Wines of Chile” as world class appellation.
Strengthen the country’s image synergistically by integrating tourism, gastronomy, and wine.
This new stage requires reaching the consumer, strengthening the use of new technologies and social networks,
and acting strategically with below the line actions, public relations, and above the line actions through a global
positioning campaign.
STRATEGIC PLANS
Details of the primary lines that will guide the organization and industry toward meeting the proposed objectives follow,
divided into two levels—corporate and market strategies.
Corporate Level Strategies
• Prioritize the assignment of resources by market. Focus resources to have impact, differentiate markets by
their potential, and develop commercial plans in accordance with the local reality.
• Build a relevant and differentiating image for Chilean wine. Each activity undertaken should reinforce the
positioning developed in the Plan 2020.
• Develop market intelligence and monitoring. The objective behind this strategy is to contribute to making
decisions by compiling and systematically analyzing information to improve diagnostic abilities in the markets
and contribute to generating a vision of the future. This will help align the industry behind the strategy and
represent an important added value for the smaller members.
• Ensure sufficient funding for WoC. In accordance with the analyses conducted, WoC’s financing is inadequate
for the level of competition that currently exists in the markets and compared with the resources of our
direct competition.
61
• Incorporate the industry into the planning process and maintain ongoing communication regarding activities
and results. Maintaining communication within the cluster will allow the different institutions and members to
understand the industry’s objectives, WoC’s strategies and activities, and the results obtained. This will maintain
better alignment and contribute to greater effectiveness of the strategy.
Market Level Strategies
Creating status for the Chile category to separate it from the “New World” or “Others” categories will require success in
achieving recall and positive perception in the key segments (consumers, buyers, wine writers, distributors, importers, and
other opinion leaders) of our priority markets by offering a diverse mix of products with respect to varieties and styles, with
presence in different distribution channels—with a special emphasis on on-trade and specialists—and in different price
segments, while focusing on the price range above US$10 retail per bottle.
Product
Emblematic Varieties:
• Cabernet Sauvignon: leading variety
• Carmenere: differentiating; ambassador variety
• Sauvignon Blanc: leading white variety
Others
• Syrah and Pinot Noir: from coastal and cool-climate areas
• Carignan: Niche opportunity for dry-farmed old-vine wines
Cabernet Sauvignon is Chile’s primary variety and represents 35% of the total plantations and 23% of national exports of
bottled wine. No other country in the world has more Cabernet Sauvignon planted than Chile. Given the importance of this
varietal in Chilean wine, its high quality, the level of renown achieved by Chilean Cabernet Sauvignons, and the varietal’s
good penetration in our consumer markets, it is considered a varietal whose future development should be maintained.
Today, however, 15 years after its rediscovery, Carmenere presents tremendous opportunities and should play a central and
strategic role in the industry’s efforts for positioning and the development of the category.
Carmenere is considered to be Chile’s emblematic variety. Although it is neither the most widely produced nor the most
sold varietal in Chile (it represents 6% of the plantations and bottled exports), it is the varietal that most differentiates
and identifies the county. Among Chile’s primary varietals, Carmenere has grown the most in surface area planted in the
past ten years and was the only one to increase its average price in 2009, despite the economic crisis. This is a clear
recognition of the improvements made in its quality and the increased consistency of the wines made from the variety. Its
advantages include the fact that it is different and “sexy” within an offer of globalized varietals, with a quality potential
in line with the tastes of today’s consumers, and that already has the backing of influential international publications and
competitions. It is nearly exclusive to Chile and is globally considered to be a Chilean variety. It stands out in blends as well
as a monovarietal. It is versatile in food pairing and in line with the national image strategy.
62
Among its weaknesses is the fact that its quality is still inconsistent at the entry-level price range, which could create a poor
reputation. Care must also be taken to avoid planting it in inappropriate sites and then attempting to override vegetal notes
with excess ripeness, thereby losing its own Carmenere character.
The opportunities for Carmenere include the excellent momentum that it has already achieved through the high scores it has
received as a monovarietal and in blends with high Carmenere content, some of which have earned some Chile’s highest
scores. Chile has excellent terroirs for producing high quality Carmenere, which offers a differentiating and unique element
and that will allow it to be positioned as Chile’s emblematic variety.
Given this context, Carmenere should be promoted as Chile’s emblematic, differentiating varietal and the ambassador for
high quality Chilean wine. To achieve that, we recommend:
• Continue investing in research to identify terroirs and planting Carmenere in appropriate places to obtain high
quality Premium wine that is free of predominant green notes.
• Avoid producing and selling Carmenere if the price-quality ratio does not contribute to the positioning of the
prestige that must be associated with the varietal.
• Focus on the Premium and Superior price ranges.
• Maintain a distinctive style—Carmenere’s own DNA.
• Agree to label the variety as ‘Carmenere,’ without accents and eschewing other spellings that make for
inconsistent pronunciation and to claim the variety as an exclusively Chilean grape.
• Carmenere should be a pillar of commercial strategy and included in the development of Chile’s national image.
Additionally, Chile should actively promote its Sauvignon Blanc among the white varieties due to the country’s innate
conditions for producing fresh, high-quality wines with good acidity, which has already been recognized by the specialized
press and consumers alike. The supply of Sauvignon Blanc is limited and our primary competition is New Zealand, which
makes it a less competitive niche than other varieties.
Exports of Sauvignon Blanc have grown more in both value and volume than any other variety in Chile over the past seven
years. Market growth in the United Kingdom has been dominated by white wines, and three-quarters of the retail sales of
Sauvignon Blanc come from Chile and New Zealand. Sales in the United States are highly dynamic as well. It is essential to
take advantage of the growth in Chile as a product of the growing demand it has experienced in the primary target markets.
It bears noting that because of its hemispherical counter-seasons, Chile is able to supply Sauvignon Blanc of the same year
to markets in the northern hemisphere during its summer season, thereby contributing a product with tremendous freshness
with an excellent price-quality ratio. Chile also has the advantage of being able to offer high quality young wines during the
same year they are made, which presents significant benefits in terms of income flow and profit.
We consider it relevant to promote Sauvignon Blanc from cool-climate valleys as well as those sold at more than US$40 FOB.
Although higher priced wines are more difficult to sell, they are key to the image of Chile for this variety.
It is also important to take advantage of the opportunities we have for developing Syrah and Pinot Noir, particularly in
coastal and cool-climate areas, especially given increasing consumer preference for fresh wines with lower alcohol levels.
Furthermore, it is to our advantage to promote wines made from dry-farmed old vines, such as Carignan from Maule. This
is yet another way to emphasize Chile’s ability to offer a broad range of natural wines of origin with diverse styles and
exceptional quality.
63
As a complement to the above, it is worth noting that the development of the afore-mentioned varieties and styles takes
place within the context of an ongoing process of exploration of and experimentation with Chile’s climatic and geographic
frontiers that have made it possible to continue expanding into new vitivinicultural areas, both to the north and south as
well as toward the coastal and Andean areas.
In this process of discovery and learning, the concepts and importance of regionality and origin have also been fully
internalized by the wineries and their winemakers in large companies as well as in smaller personal and artisanal projects.
It is no longer enough to offer wines with tremendous quality and diversity; today Chile must also offer wines with their own
identity: wines of origin, honest wines that are an expression of pure fruit and its terroir.
Price
The following chart shows the national industry’s evolution in average annual price of bottled wine exports.
GRAPH 25: EVOLUTION OF THE AVERAGE PRICE OF BOTTLED WINE (US$ / CASE)
26.77
30.00
25.26
25.00
20.00
18.21
15.00
10.00
5.00
0.00
1990
2000
2009
Furthermore, the following chart shows the current and projected prices of bottled Chilean wine in comparison with those
of the world industry. The values for the competition correspond to the year 2009, except for Australia, which runs from
April 2009 to March 2010. The subsequent graph shows the average price of imports of bottled wine into the United States
for 2009.
64
GRAPH 26: CURRENT AND PROJECTED PRICES FOR CHILEAN BOTTLED WINES IN COMPARISON WITH OTHER WORLD PRODUCERS (US$ / CASE)
120
100
80
60
40
20
0
South
Africa
Argentina
Chile
2009
United
States
Australia
Italy
Chile
2020
Rioja
France
New
Zealand
Bordeaux
Burgundy
Source: Wines of Chile 2010, based on information from various sources
GRAPH 27: AVERAGE PRICE OF IMPORTS OF BOTTLED WINE IN 2009 (US$ / CASE)
90.0
82.4
80.0
68
70.0
60.0
46
50.0
45
34
40.0
34
32
30.0
23
20.0
France
New Zealand
Spain
Italy
Argentina
South Africa
Australia
Chile
Source: Gomberg-Fredrikson
The two previous graphs clearly show how the industry has been positioned as a primary source of value wine (source value)
in many markets. The future of Chilean wine depends on its evolution beyond the concept of value, a factor that has made it
impossible to develop the industry’s full potential.
Chile has potential for growth in terms of added value, as New Zealand and other recognized appellations around the world
have done. With this in mind, we propose directing WoC’s investment toward the segment of retail prices over US$10 (FOB
greater than US$35 per case) as a reference in the US markets. Lower price segments require higher economies of scale in
which not everyone can participate and that do not have a sustainable added value, and therefore additional investment in
generic marketing is not justified in that segment.
In 2009, the segment of FOB greater than US$35 represented just 21% of the volume of bottled wine exported and 39% of
the value. The plan is aimed at increasing this value and participation.
65
Target Markets
Having analyzed five key variables—maturity, potential sales of fine wine, market size, consumer type, and potential for
growth—the Wines of Chile 2020 Strategic Plan recommends focusing on the following markets in the order presented:
MARKET
United States
Canada
Asia
Brazil
Europe
MATURITY
SALES POTENTIAL
FOR FINE WINE
MARKET
SIZE
CONSUMER
TYPE
GROWTH
POTENTIAL
Medium
Medium
Low
Medium
High
High
High
High
High
Medium-Low
High
Medium
High
High
High
Aspirational
Aspirational
Aspirational
Aspirational
Traditional & Connoisseur
High
High
High
High
Low
Annex 2 presents a brief analysis of each of these markets
Relevant aspects to consider
• United States: the focus will be on the states of New York-New Jersey-Connecticut, California, Florida, Illinois,
and Texas.
• Canada: the primary objective in this market is to convince the monopolies to open more space in the category
to allow for greater participation in the market. To do that, it is necessary to undertake actions with the existing
wineries to enliven the category. A more dynamic category should result in more listings and the entrance of
new participants.
• Asia: the focus will be on Korea, Japan, Hong Kong, and China (Shanghai and Beijing), with a regional
headquarters in an as yet to be defined location. The actions will be focused on each market, given the large
differences between them (culture, growth curves, and levels of penetration of wine and the Chile category).
• Europe: relevant markets will be addressed through the WoC Europe office based in the United Kingdom.
Channels
Creating category status for Chile also demands achieving greater presence in the different distribution channels, with
particular emphasis on the on-trade and specialists.
Chile already has a strong presence at the supermarket level, which it must maintain and strengthen by increasing and
improving the product mix toward premium wines. However, Chile is under-represented in the on-trade and specialist
channels, both of which are key for consolidating an image of quality and the sale of wines of greater value.
The following strategies will be used to penetrate the respective channels:
• On-Trade: seek to stimulate demand through greater exposure and education. This requires creating and
nurturing relationships with members of the on-trade, generating interest in and providing the opportunity to try
Chilean wines, and reinforcing the use of this information as sales arguments. Specific actions will be sought out
in each target market to leverage this channel.
• Off-Trade (supermarkets and specialized shops): stimulate demand through education and promotions. Educate
the distributors, reinforce the “Outstanding Value in all Price Ranges” message, and lend support at points of
sale. Concrete actions such as promotions with the relevant monopolies, specialized shops, and supermarkets
will also be taken to develop the image of the category, with emphasis on wines over US$10.
66
Promotion
The aim is to improve positioning in key segments (press, buyers, sommeliers, and consumers) through a series of educational
programs, press coverage, and the development of the County Image aligned with the desired positioning.
In this new stage of moving toward 2020, the industry’s promotional efforts should aim at both the opinion leaders and
gatekeepers as well as the final consumers.
The explosive development of information technologies and the widespread expansion of social networks in our major
consumer markets not only make it possible to communicate directly with a large number of our potential consumers at
a very low cost, but also to establish a direct dialogue with them and participate in their conversations among peers and
members of their networks of interest. This new ability substantially modifies the traditional of paradigms of communications
and brand building from a passive unidirectional model to one that is multidirectional characterized by networks and a
multiplicity of simultaneous conversations.
In this context, the active participation of Wines of Chile and the wineries in the different social network platforms and
wine and lifestyle blogs, along with the development of powerful, attractive, and highly interactive web sites become an
immediate requirement for the industry. The key to relevance in this context, however, will be the ability to be perceived and
validated as an honest and authentic voice of Chile, its wines, its producers, and its people.
We also plan to focus activities on certain consumer segments to support and capitalize on the direct access to and
communication with our target consumers.
In addition to intensifying Wines of Chile’s presence and participation in the electronic media, social networks, and consumerfocused actions, we will continue developing promotional actions that are largely centered on educating and influencing
the gatekeepers—the importers, distributors, specialized press, on- and off-trade buyers, sommeliers and opinion leaders.
These actions include:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Bringing journalists, buyers, and sommeliers to Chile
Conducting tastings and seminars
On-line blogger tastings
International trade fairs
Publication of inserts and newsletters
Advertising in wine and lifestyle press
On-trade promotions
Point of sale promotions
Annual Wines of Chile Awards
Innovation Awards
Sommelier Summit
Development and publication of market intelligence
Sponsoring events
Web site
Finally, in the upcoming stage we will accompany these promotional actions with significant investment in advertising and
inserts in the major media and magazines in the target markets.
67
Understanding that there is a close relationship between Country Image and Category Image, the process of positioning wine
also includes incorporating the differentiating attributes of the country and its geography, culture, and people as a means
of extending an invitation to experience Chile and its wines. By promoting Chile, we promote our wines, and conversely,
by promoting our wines, we also promote Chile.
ACTION PLAN
With the objective of taking advantage of and acting upon the opportunities identified in the diagnostic, the following Action
Plans have been developed.
OPPORTUNITY
68
ACTION PLAN
• Consumers seek unique, high-quality wines and are increasingly
more sophisticated and informed.
• Promote premium Carmenere as a unique and differentiating
element.
• Sophisticate the message: Today Chile offers the world not only
high quality wines and diversity, but wines with identity as well:
wines of origin, honest wines, wines that are a pure expression of
their fruit and terroir.
• Promote dry-farmed, old-vine Carignan as an example of the
constant ability to surprise and discover many different high
quality products.
• Create a “road show” type program with Chile’s best red and white
wines: WoC Premium Wine Summit.
• Emphasize origin and regionality in the more developed markets.
• Define activities for the priority varieties that will allow us to
educate consumers about them and increase their presence in the
target markets.
• There is growing consumer preference for products from sites with
green agriculture, sustainable environment, and that are socially
responsible.
• Emphasize the natural aspects of Chilean wine and environment;
communicate environmental leadership and social responsibility in
the industry.
• There is a strong connection between the County Image and the
Category Image. Chile’s image today is a blank page, a story
waiting to be written.
• Create a relevant and differentiating country image in the premium
segment.
• Work with the Imagen de Chile Foundation so that its programs and
actions cover the priority markets defined in this plan and ensure
coordination between the Foundation and our own promotional
strategies.
• Promote tourism in general and wine tourism in particular.
• Show culinary and wine-related traditions.
OPPORTUNITY
ACTION PLAN
• Educated, informed consumers are willing to dink premium
Chilean wines and recognize their quality. This validation can
come from traditional influencers, recommendations from
social networks or friends, or from direct experience.
• Work to obtain greater credibility in high quality wines from
traditional influencers.
• Actively participate in the social networks in which our target
consumers participate and receive their information, thereby
establishing Wines of Chile as an honest and credible voice on the
offer of quality and diversity of Chilean wine.
• Facilitate occasions for consumer tastings, consumption, and
education.
• Show the character and identity of the winemakers.
• Develop more Brand Ambassadors and globally recognized brands.
• The new post-crisis consumers are intelligent, informed, and seek
value (price-quality ratio).
• Communicate Chile’s value: excellent price-quality ratio in every
price segment.
• Consumers are socializing more at home: “trading-down” for
personal consumption while “trading-up” with friends and family.
• Seek out new ways to entertain and educate consumers at home.
• Growing interest in products associated with Latin culture.
• Emphasize the sophisticated Latin origin and identity.
• Trend toward the consumption of wines with less alcohol and a
growing preference for fresh wines.
• Highlight coastal and cool climate wines, especially Sauvignon
Blanc in white and red Pinot Noir and Syrah in reds.
• Be proactive in promoting and adopting self-regulation in matters
of labeling and protection of public health.
• More sophisticated consumers who are willing to explore new
alternatives, especially the “Millennial” segment.
• Directly go after the “Millennial” segment through dialogue and
education, using social networks, blogger tastings, and testing
opportunities.
• Explosion of social networks allows direct low cost, high frequency,
and world-wide communication and interaction with consumers.
• Actively participate in the social networks in which our target
consumers participate and inform themselves, thereby establishing
Wines of Chile as an honest and credible voice with respect to the
quality and diversity of Chilean wine.
• Consumers value products that offer value through better or
more attractive labeling, packaging, closures, freshness, and
production duration.
• Make greater efforts to innovate labels, packaging, closures, and
enological practices.
69
STRATEGIC IMPORTANCE OF THE INDUSTRY
ECONOMIC IMPORTANCE
One of the Chilean government’s current policies aims to convert Chile into one of the world’s top ten exporters of food
products over the course of the next ten years. The wine industry is doing its part to achieve this goal, as Chile is now the
fifth largest wine exporting country on the globe.
In recent decades Chile’s food and agriculture sector has been deploying a successful strategy of internationalization, which
has become a pillar of the agro-export basket and of the country’s economic development. Our fruits and vegetables, wine,
seeds, and agricultural and forestry products reach hundreds of countries around the world and provide employment to more
than 800,000 people.
Wine exports make up 2.6% of Chile’s total exports and 14% of exports in the forestry-agriculture-livestock sector
(2009 figures). The sector has more than 260 companies with annual exports greater than US$50,000, 21% of which export
more than 100,000 UF (aprox. US$4.2 million) per year. This means that the majority—79%—of Chile’s wine exporters are
small and medium sized companies.
Chile produces an average of 887 million liters of wine per year1, 70% of which is for export markets, which have grown
steadily in value by 11% per year. These exports are sent to 150 countries, with the United States, United Kingdom, and
Canada being the most important markets.
From a domestic perspective, the wine industry operates in several regions of the country, from the Coquimbo Region in the
north to the Araucanía Region in the south. The Maule and O’Higgins regions have the greatest concentration of area planted
to vine (53.4%), although the Metropolitan, Valparaíso, and Biobío regions also have a significant amount.
The industry’s continuous development and geographic diversification have attracted both domestic and foreign investment
to historically less-developed zones such as the Maule Region, which had previously been overlooked as an area worthy of
investment.
This development has also benefited the many agents involved in the value chain, including suppliers of materials, technology
and complementary services, and particularly the large number of grape growers, most of whom are small producers.
At the same time, the wine industry continues to be a major source of tax revenue for the government through the Alcohol Law
(ILA). Over the past 5 years (2005–2009), the Wine ILA accounted for an average of 0.21% of the country’s total tax revenue.
In 2009 alone, the Wine ILA generated tax revenues of US$58 million.
TABLE 32: TAX COLLECTED UNDER THE ALCOHOL LAW
Wine ILA (millions of US$)
Total ILA (millions of US$)
%
Equivalent Contribution of
Wine in millions of US$
1993
9.429
55.735
17%
23
2000
22.219
107.183
21%
41
2005
28.165
142.175
20%
50
2006
28.301
160.101
18%
53
2007
28.565
170.908
17%
55
2008
30.804
188.258
16%
59
2009
32.203
194.627
17%
58
1. Average over the last 5 years. Source: SAG
71
Finally, the emerging wine tourism industry is opening up a new area of business that has great potential, as it offers
high quality employment that not only diversifies risks and sources of revenue, but also fosters more comprehensive and
sustainable development in the regions and communities in which these services are located.
SOCIAL ROLE
Employment is the primary driver of social development in any country. The Chilean wine industry directly employs more
than 100,000 people and accounts for 13% of all jobs in the agricultural sector. With growth in production of 136% over the
past ten years alone and high expectations for the coming decade, the industry expects to take an even more leading role in
employment and social development.
Indeed, embedded in a globalized, highly competitive world, the industry is leading the transformation of Chile’s agriculture
and food sector in terms of labor development by implementing actions and projects aimed at supporting wine industry
workers and their families in three specific areas.
Employment Training
Through a tax incentive from SENCE, the Chile Vinos OTIC has trained 17,700 people since 2002 (6,500 in the past
18 months alone). In all, 86 companies have participated in this process and close to 4,000 courses have been taught. The
result is better trained workers who are aware of and value their skills, which ensures that they are able to successfully face
the challenges of their day-to-day duties to the benefit of themselves and their companies.
Skills Certification
Since 2004 the Asociación de Vinos de Chile A.G, in partnership with Fundación Chile and the National Training and
Employment Service (SENCE), has been implementing a project to design, validate, and disseminate a system for certifying
work skills among wine industry workers.
As of June 2010, a total of 2,250 workers had been certified under this project. The participants not only earned official
recognition of their technical skills from government and industry, but also increased their employability and obtained
access to new opportunities.
Social Grants
Approximately 200 grants are awarded each year to micro-business owners and unemployed workers to fund training in a
wide variety of skills and trades, not all of which are necessarily related to the wine industry.
72
LEADERSHIP AND PARTNERSHIP
The wine industry, led by Vinos de Chile and its different divisions (Wines of Chile, the Vinnova and TecnoVid technological
consortiums, internal market, and the legal department) has been a pioneer in partnership, collaborating in key areas that
foster national development, particularly in the agriculture-livestock-forestry sector. Among other things, its efforts have
focused on international promotion and market development; research and development in winegrowing, winemaking and
marketing; the Wine Industry Sustainability Program; and social responsibility. Due to their many benefits, we also hope to
see more public policy incentives and awards that promote partnerships.
THE WINE INDUSTRY’S CONTRIBUTION TO DEVELOPING THE COUNTRY IMAGE
More than other Chilean products, wine reaches millions of homes and consumers around the world with a well-identified
country brand that associates the name “Chile” with quality and diversity. This makes the brand a unique vehicle for
positioning the country’s image, which is considered one of the nation’s strategic assets and also facilitates the introduction
of new products and services.
In 2009, Chile exported 42 million cases of wine, the equivalent of 510 million bottles. From a conservative perspective,
each bottle is seen by at least 3 people, which means that the Brand Chile reaches 1.5 billion people each year. Assuming
a moderate cost of US$0.852, which is the average cost per contact on the Internet in the United States, the value of this
impact is US$1.275 billion per year.
Developing the “Chilean Wine” (Wine of Chile) category in the priority markets defined in this Plan will improve and expand
Chile’s position in the minds of consumers. Positioning Chile as a country that produces high quality wines will reinforce the
country’s positive attributes such as good agricultural practices, high quality cuisine, attractiveness as a tourist destination,
a country with its own identity and traditions, a good quality of life, and a sociable people who know how to enjoy themselves
and make the most of special occasions, among other qualities.
2. Source: Imagen de Chile Foundation
73
MICROECONOMIC INDICATORS FOR THE WINE INDUSTRY
The wine industry is facing extremely high levels of competition from the wide array of appellations and brands now on the
market, as well as low profitability, which is far below that of other productive sectors.
According to public information obtained from the Santiago stock exchange, listed wine sector companies reported an
average return on sales over the past ten years of 7.8% annually and just 5.6% over the past five years.
The most important indicator—return on equity—averaged 8.3% per year over the past ten years and just 6.2% over the
past five years.
In closing, comparing these low return indicators and the meager 1% rise in the average price of bottled wine over the last
ten years with the 9.2% annual growth in the volume of exports of bottled wine over the same period, we can conclude that
Chile’s wine industry has a problem of profitability but not of sales.
To ensure the industry’s sustainability over the medium and long term requires improving profitability. To achieve this,
any increase in the volume of wine exported must be accompanied by higher price levels, which will require a collective
public-private commitment to promote Chile’s wines and country image according to the objectives defined in this
2020 Strategic Plan.
CONCLUSIONS
The wine industry is one of the pillars of Chilean agriculture and of the country as a whole. In addition to its importance
for exports and investment, its impact on employment, personal and professional development, the country image, and in
facilitating new Chilean exports make it one of the most emblematic sectors of our economy.
Notwithstanding the above, the wine industry suffers from low rates of return compared to other productive sectors, despite
having an attractive growth potential. Further development of the sector will depend on raising Chile’s position as a country
of origin for premium wines, and this task will require commitment and support from both the public and private sectors
and, once achieved, will benefit the country as a whole.
74
75
REQUIRED INVESTMENT
HISTORIC INVESTMENT IN PROMOTION
The industry’s investment in promotional programs, international fairs, and its offices in Chile, the United Kingdom, and the
United States has grown an average of 8.5% per year from 2005 to 2010 and reached a total investment of US$7,542,773
in 2010.
TABLE 33: HISTORIC INVESTMENT
2005
4,914,488
384,628
2,729,860
Total WoC Investment
Fairs
Promotion
Generic Investment
Office
1,800,000
Funding
Public Sector Support 1,091,944
Private Sector Support 3,822,544
22%
78%
2006
5,761,195
569,480
3,391,715
2007
6,612,690
777,800
3,692,890
2008
6,354,322
1,076,737
3,135,585
2009
6,081,000
949,669
2,989,331
2010
7,542,773
1,219,065
4,108,708
1,800,000
2,142,000
2,142,000
2,142,000
2,215,000
1,356,686 24% 1,477,156 22% 1,659,522
4,404,509 76% 5,135,534 78% 4,694,800
26% 2,253,000 37% 3,022,862 40%
74% 3,828,000 63% 4,519,911 60%
Sixty percent of this investment corresponds to private support from the industry through contributions to the organization
and the payment of user-pays activities.
Graph 28 compares Chile’s generic investment with that of our competitors and shows that Chile is in sixth place. Comparing
the investment per case of bottled wine, it is evident that the Chilean wine industry’s level of funding for generic promotion
is low.
GRAPH 28. ESTIMATED GENERIC INVESTMENT 2009 (MILLIONS OF US$)
60
50
51.2
40
30
19.4
20
11.9
10
7.3
7
6
4.1
3.6
Wines of
California
Wines of
Argentina
Wines
of Chile
Wines
of South
Africa
New Zealand
Wine
Growers
0
France
Spain
Wine
Australia
77
GRAPH 29: ESTIMATED GENERIC INVESTMENT 2009 (US$ / CASE)
0.60
0.564
0.50
0.351
0.40
0.346
0.321
0.30
0.293
0.231
0.20
0.151
0.141
Wines
of South
Africa
Wines
of Chile
0.10
0
France
New Zealand
Wine
Growers
Spain
Wines of
California
Wines of
Argentina
Wines
Australia
In this context, not investing is the equivalent of disinvesting, because our competition will continue to invest. Furthermore,
it will take a significant increase in our promotional efforts to simply maintain the current market share.
Beginning from a low level of structural funding, the organic growth of resources destined for international promotion
does not make it possible to face the challenges detailed in this Strategic Plan for 2020. Even less so within a context
characterized by the very high levels of international competition, the strengthening of emerging players (Argentina), the
fall of formerly solid producers (Australia, France), and the rise of new players (Brazil, Uruguay, China, Eastern Europe), and
Europe’s expected reaction to the increased competition from strong subsidies and deregulation.
As an industry we have set a new collective goal that seeks to reach $US3 billion in exports of bottled wine by the year 2020.
This plan represents the waybill and strategy for the industry, and now we must back it with the means that will allow us
to reach that goal.
Wines of Chile needs to double its current levels of investment in promoting the category in order to implement its Strategic
Plan 2020. This will require an increase in the contributions from the industry, but we also expect—due to the important
contribution that promoting wine makes to the positive development of the country’s image and collective development—to
receive a significant increase in governmental funding, primarily through ProChile, Corfo, and the Imagen País Foundation.
We want to be a strategic partner with the government in implementing its public policies aimed at improving the image and
competitiveness of the foods Chile exports and the tourism services it offers, as well as in economic and rural development
policies, particularly those aimed at small and medium sized companies.
78
PROJECTED INVESTMENT & FUNDING SOURCES
The investment plan that WoC proposes considers the following:
Beginning in 2011:
• Open a Wines of Chile office in Asia.
• Conduct programs in priority markets.
• Undertake media campaigns in priority markets for a total annual investment of US$1.5 million
for the first two years, with a maintenance program in the remaining years.
• Industry investment will be the equivalent of 7% of its exports of bottled wine in marketing and
promotional efforts.
• Total WoC investment will fluctuate between 20 and 24 cents (US) per case.
79
80
Source: Wines of Chile
127,978,097
2013
6,562,500
58
700,000
6
1,500,000
13
2,500,464
22
11,262,964
100
145,061,711
2014
6,989,173
60
700,000
6
1,500,000
13
2,532,473
22
11,721,646
100
164,205,709
2015
6,989,173
55
1,500,000
12
1,500,000
12
2,665,122
21
12,654,296
100
185,644,627
2016
8,492,766
60
1,500,000
11
1,500,000
11
2,698,425
19
14,191,191
100
209,638,716
2017
8,692,766
58
2,000,000
13
1,500,000
10
2,832,393
19
15,025,159
100
236,476,690
2018
10,291,885
62
2,000,000
12
1,500,000
9
2,867,041
17
16,658,926
100
266,478,763
2019
10,541,885
60
2,500,000
14
1,500,000
9
2,902,382
17
17,444,267
100
300,000,000
8
2,938,430
15
19,062,200
100
2020
12,123,770
64
2,500,000
13
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
7,542,773
11,176,316
11,910,582
11,262,964
11,721,646
12,654,296
14,191,191
15,025,159
16,658,926
17,444,267
19,062,200
1,243,991,463 1,358,462,910 1,483,467,960 1,619,975,910 1,769,045,250 1,931,831,874 2,109,598,037 2,303,722,151 2,515,709,465 2,747,203,741 3,000,000,000
0.61
0.82
0.80
0.70
0.66
0.66
0.67
0.65
0.66
0.63
0.64
0.17
0.23
0.23
0.21
0.21
0.21
0.22
0.22
0.23
0.23
0.24
112,743,565
PROJECTED INVESTMENT IN MARKETING AND PROMOTION–WINERIES
87,079,402
99,167,792
YEAR
Value of Exported Bottled Wines
TOTAL Investments % of Exports
US$ / Case
2012
6,541,500
55
1,500,000
13
1,500,000
13
2,369,082
20
11,910,582
100
2010
4,587,032
61
0
0
1,500,000
16
1,736,676
23
7,542,773
100
2011
5,838,000
52
1,500,000
13
1,500,000
13
2,338,316
21
11,176,316
100
FUNDING
Promotion
%
Media Plans
%
Fairs 1,219,065
%
Offices
%
%
TABLE 34. PROJECTED INVESTMENT (SUMMARY)
RETURN ON INVESTMENT
Wine is one of the few Chilean products to reach the end consumer labeled Brand Chile, which makes it a unique vehicle for
positioning the country image and a strategic asset for Chile that facilitates the introduction of new products. Chilean wine
reaches millions of homes and consumers around the world and therefore contributes to the positive recall of the country.
Greater development of the category in the target markets means more and better positioning of Chile with the consumers
of those markets.
This proposal therefore supports positioning the country image through wine, Chile’s most natural ambassador and a
unique vehicle for associating the attributes of quality and diversity with the origin “Chile,” while contributing to increasing
possibilities of exports and other areas.
Chile exported 42 million cases—510 million bottles—in 2009. Employing conservative criteria, we can assume that
each bottle is seen by at least 3 people, which means that Brand Chile reaches 1.5 billion people each year. Considering
a moderate cost of US$.8533, which is the average cost per Internet contact in the United States, the impact value is
equivalent to US$1.275 billion per year.
Projected sales for 2020 are US$3 billion, the equivalent of 80.9 million cases, 970.8 million bottles, and 2.912 billion
contacts. Based on 2010 costs, the value of Brand Chile reaching that many contacts is US$2.475 billion. It is clear that
both the generic and industrial investment, along with stimulating higher average prices and increased sales, generates
a positive additional impact in the development of the country image, whose value is far superior to the investment made.
3. Source: Imagen de Chile Foundation
81
MANAGEMENT CONTROL SYSTEM
It is vitally important to have an objective method for measuring the progress of the implementation of the strategy. To
do so, we have defined a series of corporate- and market-level management indicators to be reported periodically, as
described below.
CORPORATE LEVEL KEY PERFORMANCE INDICATORS (KPI)
• Annual monitoring of the value, volume, and average price of bottled wine exports in comparison with the goals
defined in the Plan 2020, which is presented below.
GRAPH 30: PROJECTED VALUE PER YEAR (US$ MILLIONS)
3,500
3,000
2,500
2,000
1,500
1,000
500
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0
GRAPH 31: PROJECTED VOLUME PER YEAR (MILLIONS OF CASES)
90
80
70
60
50
40
30
20
10
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0
83
GRAPH 32: PROJECTED AVERAGE PRICE PER YEAR (US$ / CASE)
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0
• Analysis of the funding provided by different sources: governmental, wineries, growers, and supplies
• Annual service survey to wineries
• Two annual meetings to report on results obtained and evaluate the implementation of the plan.
MARKET LEVEL KEY PERFORMANCE INDICATORS (KPI)
We will attempt to obtain the following generic information for each of the markets with respect to their cost benefit.
• Measure of the level of consumer recall, preference, and positioning in relevant attributes in the United States,
United Kingdom, Canada, Brazil, and Asia
• Market share in value and volume by channel and price range
• Annual exports of bottled wine in value and volume
• Average price of bottled wine
• Number of visits per year
• Mentions and tone of press per year
• Benchmarking against the competition: level of expenditure for promotion and activities
Furthermore, we will measure indicators by activity to determine their return and thus to better prioritize resources.
The parameters to measure should include aspects of:
•
•
•
•
•
84
Cost
Efficiency (cost per attendee, for example)
Satisfaction
Image
Specific aspects for each activity
85
ANNEX 1
GENERIC PROMOTION
86
EUROPEAN UNION
In April 2008 the European Council of Ministers decided to reform the Common Market Organization for wine to reduce
over-production and make European wines more competitive. The European Commission considered that European wine
producers were at a disadvantage in relation to their competitors, as their smaller size made them less able to adapt to the
needs of large retailers, especially given current regulatory restrictions and market inefficiencies. They also considered other
issues such as strong competition from New World countries, confusing labeling rules, and rigid winemaking practices, etc.
The new rules therefore aim, among other things, to establish measures to support the sector. For the specific case of
promoting European wines in third-country markets, this support consists of measures to generate information or promotions
that improve the competitiveness of European wines. Contributions from the European Community for promotional activities
may not exceed 50% of eligible expenses (public relations, promotional activities and advertising, participation in trade
fairs and studies, etc.), and the other 50% contributed by the country of origin, normally through state and regional support.
Only 77% (½35 million) was spent on these activities in 2009. Of that amount, 52% was allocated to France, 20% to Spain,
and 14% to Italy. The remaining portion was divided among Germany, Austria, Portugal, Slovenia and Romania.
The European Commission has formulated an ambitious promotional plan for 2010–2014, as detailed below. The values
shown represent 100% of the potential investment, which includes 50% support in contributions from the European Union
and the other 50% in private and public contributions from each individual country.
TABLE 35: EUROPEAN COMMISSION SUPPORT FOR PROMOTION (EUROS)
COUNTRY
Spain
France
Italy
TOTAL (EUROPE)
EUROS 2010
64,000,000
100,000,000
70,032,000
279,676,000
EUROS 2011
68,615,169
107,211,202
75,082,149
299,844,000
EUROS 2012
98,097,513
153,277,364
107,343,203
428,680,000
EUROS 2013
112,661,108
176,032,981
123,279,417
492,322,000
Source: European Commission, http://ec.europa.eu/agriculture/markets/wine/facts/index_en.htm
In addition to the support that European countries receive from the European Union, each country also has its own trade
organizations and/or private or public entities dedicated to promoting wine and other agricultural products. The most
important associations in the most pertinent countries of the European Union (France, Italy, and Spain) are listed below.
87
SOPEXA
France has numerous generic plans to promote its different regions, and all of the programs receive governmental support.
Although Sopexa was created as a governmental office, it is now a private entity dedicated to promoting wine and is one of
several public relations organizations in France that carries out this work. The organization actively promotes French wines
within the European Union and beyond by channeling resources to France Agrimer (the French Association of Horticultural
Products and Wine). It has 280 members and maintains 35 offices in 28 countries and conducts activities in approximately
50 countries. Its shareholders include the Crédit Agricole Bank with a series of inter-professional committees.
ICE
This organization is Italy’s generic presence in the world. It is a government agency whose objective is to promote Italian
exports and foster business opportunities and industrial cooperation between Italy and other countries. Funding for its
activities comes from the country’s Ministry of Foreign Trade, which establishes guidelines and plays a mainly supervisory
role, and from companies that make use of its services. ICE is not only involved in food and wine but in all Italian products.
In practice, promotional initiatives aimed specific markets are handled by the region involved, a producers association,
or a consortium, each with its own budget and independent operation. These organizations generally use ICE because it
has 115 offices in 86 countries and is present at most trade fairs. As with France, Italy has no common plan and there is
little coordination. With 700 employees in its head office and 25 independent food and wine sectors, ICE has difficulty with
internal coordination and in organizing the Italian wine industry. In practice, it offers little more than logistic support.
SPAIN
ICEX
While Spain has very active generic regional bodies such as those of Rioja and Vinos de Jerez, Wines from Spain has achieved
a cohesive presence. ICEX currently initiates most activities. It is part of the Ministry of Industry, Tourism and Commerce.
Activities are usually 70% financed with state funds and 30% user-pays (importers and wineries).
RIOJA
The Rioja Regulatory Council was established in 1953 and became the entity responsible for ensuring compliance with the
regulations of the Rioja Denominación de Origen Calificada (D.O.Ca), promoting and controlling the quality of wines under its
purview, promoting the region’s image, and, in the socio-economic sphere, defending the sector’s interests by encouraging
initiatives to establish inter-professional agreements.
The activities of the Regulatory Council are financed by contributions made by the winegrowers and wineries registered with
this organization. These contributions consist of the following:
• Mandatory fees based on the value of production
• Mandatory fees on products
• Mandatory fees for certified values
• Mandatory fees for back labels and seals
For 2010, the Rioja D.O.Ca. will invest ½10 million in developing promotional plans to be implemented in the countries with
the largest consumption of Rioja wine: Spain, the United Kingdom, Germany, the United States, Switzerland, Sweden and
88
Mexico. The central objective of the Rioja wine sector is to promote the collective Rioja brand in its primary markets and to
strengthen the positioning of wines with this denomination in both Spanish and foreign markets.
WINES OF SOUTH AFRICA
Working with one of the lowest budgets, this entity carries out more than 300 activities each year. These are primarily funded
through a tax. Producers also pay to participate in the events. It is primarily dedicated to development, and it finances,
implements, and manages the online certification system used by the Department of Agriculture. Its only foreign office is in
the United Kingdom.
NEW ZEALAND WINE GROWERS
This organization is funded through a wine tax of 0.0125 euros per liter, and a 0.75% tax on the value of the grapes. While
this organization has the lowest budget in absolute terms, it organizes more than 100 events annually in 15 countries. The
majority of its resources are spent on market information, training, on-trade initiatives, in-store promotions, press clippings,
public relations, and promotional material for events. This entity has two offices, one in New Zealand and another in the
United Kingdom that oversees all of the European Union markets. It also works with consultants in San Francisco and Canada.
WINES OF ARGENTINA
This organization is composed of 200 wineries representing 95% of Argentina’s wine exports. Its 2010 budget was
22 million Argentine pesos, 5 million of which came from membership dues, 6 million from user-pays, 10.6 million from
Coviar (Corporación de Vino Argentina), and the rest from other organizations (Consejo Federal de Inversiones, Turismo).
Coviar is funded through the 2.5% return on export taxes.
Considering the May 2010 exchange rate of 3.86 pesos per US dollar, this organization’s budget amounts to US$5.7 million.
These resources are primarily used to promote the country brand and do not consider the operational costs of its offices. The
total investment is estimated to be US$7 million. It conducts 240 activities per year.
Of its total budget, 33% will be spent on promotion in the United States, one of the countries with the greatest potential,
followed by Canada, the United Kingdom, Brazil and the Netherlands.
The primary focus of the 2010 campaign is the consumer. According to Wines of Argentina, this is primarily due to the degree
of maturity that the brand has achieved.
89
WINE INSTITUTE OF CALIFORNIA
Funding for this institution comes from the US Department of Agriculture, complemented by a fee charged to member
wineries. It maintains offices in The Hague, Bremen, London, Canada, and Tokyo, as well as agencies in Sweden, Denmark,
Poland, Russia, Switzerland, Mexico, and Asia. Its offices also operate as agents, offering assistance to retailers and
importers searching for suppliers.
WINES OF AUSTRALIA
The Australian Wine and Brandy Corporation is a public authority established by decree in 1981 to provide strategic support
to the country’s wine sector. Its responsibilities include:
•
•
•
•
•
Domestic and international marketing of the category
Sector analysis and information
Upholding the integrity of labeling and Australian enological practices
Safeguarding the name of wine-producing areas
Assisting in the negotiation of bilateral agreements
This organization’s main shareholders are the government of Australia, wine and brandy producers that pay a tax on grape
production, and exporters that pay an export tax.
This institution is financed by taxes and by the sale of goods and services. Of the $15 million Australian it received in 2009,
53% came from taxes and contributions, and the remainder from the sale of goods and services.
90
TABLE 36: SUMMARY OF GENERIC ENTITIES
SOPEXA
France
ICEX
Spain
ICE
Italy
DWI
Germany
WINE
Australia
Institute of
California
WINE
WINES
of
Argentina
WINES
of
Chile
WINES
of South
Africa
NZWG
New
Zealand
Number of Central Office
Employees
nd
7
25 (W+F)
40
45 AUS
+ world: 15
30
10
9 CH
+ world: 6
11
18 NZ
+ world: 8
Own Offices
Countries Represented
35
28
nd
> 25
115
86
2
15
8
> 25
8
17
1
6
3
5
2
6
2
4
Regional 70% Gov’t.,
competitive
and
funds
30%
User-pays
Gov’t. and
User-pays
Tax
Tax on
Wineries 50% Gov’t.
(½67/ha.) grapes and
by size (CFI $ Coviar)
exports
and
and
50%
(53%)
Dept. of
User-pays Agriculture
User-pays
and sales
of services
(47%)
35% Gov’t
and
65%
User-pays
95%
tax
(Re7/Lbt
Re5/Lbu),
5%
additional
Gov’t.
Tax
(½1.25
per liter
½0.75
per kg)
6
4.1
3.6
Financing
TOTAL ESTIMATED 2009
BUDGET (TH / US$)
51.2
19.4
nd
nd
11.9
7.3
7
Source: Vinos de Chile, 2010 based on information from Meininger’s WBI, 02/09
91
ANNEX 2
ANALYSIS OF TARGET MARKETS
92
UNITED STATES
The United States has seen continuous growth in its wine consumption over the past ten years and reached 323 million 9-liter
cases in 2009. Although this figure is only inferior to France and very similar to that of Italy, its per capita consumption is
much lower than the other countries. Considering the adult population alone, consumption is 13 liters per person per year,
and increases to 37 liters among the segment of regular wine drinkers—the 74 million people who drink wine at least once
a month. This figure is quite low when compared to England, where 70% of the adult population regularly consumes wine.
It is a relatively young market in which the culture of wine is new for the average North American. Its potential for growth is
therefore significant.
Wine consumption is not homogenous across states. Consumption is habitual on the east and west coasts and in some
states in the interior of the country. It is also more frequent in the cities and in more cultured segments of the population with
greater purchasing power. The graph below shows the states and regions with the highest wine consumption, as well as the
percentage of imported wine consumed in selected cities and the percentage of Chilean wine imported by those same areas.
GRAPH 33: PRIMARY WINE CONSUMING STATES & DISTRICTS
25%
21%
20%
15%
18%
15%
15%
13%
10%
10%
8%
10%
5%
5%
5%
7%
5%
6%
5% 5% 5%
5% 5%
New England
Illinois
4%
7%
5%
0%
N.Y. Metro
Region
California
Florida
Texas
D.C. Region
% of Total Wine Consumed in the USA per State/Region
% of American Wine Consumed by Major City
% of Total Chile Wine Imported
Source: Impact Databank, 2009
93
Nearly three-quarters of the wine consumed in the United States is of national origin. It is the world’s fourth largest producer
with a market share of 7.9% and produced an average of close to 2.5 billion liters in recent years. Production is concentrated
in California (89%), followed by the state of New York (4.4%), and the state of Washington (3.1%). The remaining states
produce approximately 3% of the national total.
The market share of imported wines was 25.3% in 2009, and Italy, France, and Australia stand out among them. Chile ranks
fourth and presents an upward trend in its market share. It is important to emphasize that the Chilean market increased its
share in the imported wine segment by 10% in 2009, as opposed to just 7% in 2007. Chile is one of the few countries that
saw positive figures in 2009, as well as growth that outranks the market.
TABLE 37: GROWTH AND MARKET SHARE OF BOTTLED WINE IMPORTS
BOTTLED WINE
Total Imports (volume)
Chilean Imports (volume)
Total Imports (value)
Chilean Imports (value)
2008
-5%
2%
0%
4%
%
100%
9%
100%
5%
2009
-1%
16%
-13%
16%
Source: Gomberg Frederikson Report, 2009
GRAPH 34: MARKET SHARE IMPORTED WINE BY VOLUME 2009
Others 16%
Italy 33%
Argentina 7%
Chile 10%
France 11%
Australia 23%
Source: Gomberg Frederikson Report, 2009
94
%
100%
10%
100%
7%
GRAPH 35: MARKET SHARE IMPORTED WINE BY VALUE 2009
Others 18%
Italy 33%
Argentina 6%
Chile 7%
Australia 16%
France 20%
Source: Gomberg Frederikson Report. 2009
With respect to the distribution of sales by channel, in 2008, 78.8% of the volume was generated by off-premise sales,
while 21.2% was through on-premise channels. In terms of value, 52.3% was through off-premise and 47.7% through
on-premise.
Finally, other important aspects worth highlighting are consumption by price range and variety. Over the past two years,
sales in food stores show the consumer trend toward consuming lower-priced wines. In the everyday wine category, wine
up to US$7 per bottle leads purchases; in 2009 this category grew by 2%, or 913,000 cases. This segment includes the first
three price ranges, which represents 72% of all sales.
TABLE 38: MARKET SHARE OF VOLUME CONSUMED BY PRICE RANGE
CONSUMPTION BY
PRICE RANGE
$14 and over
$10 up to $14
$7 up to $10
$3 up to $7
Other to $3
Extreme Value Wines
VOLUME
MARKET SHARE
4%
9%
15%
49%
20%
3%
CHANGE (%)
2%
7%
3%
2%
-2%
38%
Source: AC Nielsen. 52 Weeks A 01/09/2010
With respect to varieties, Cabernet Sauvignon and Chardonnay remain solid and are growing, although the majority of
growth comes from wines with a retail price below US$7. The third varietal wine showing increasing sales is Muscat, which
displays very dynamic growth at present (62%). Sauvignon Blanc, Pinot Grigio, Malbec, and Pinot Noir are the other varieties
also showing recent growth (8%, 4%, 92%, and 9%, respectively).
95
TABLE 39: MARKET SHARE VOLUME CONSUMED BY VARIETY
CONSUMPTION PER VARIETY
Chardonnay
Cabernet Sauvignon
Merlot
White Zinfandel
Sauvignon Blanc
Pinot Gris/Grigio
Riesling
Shiraz/Syrah
Red Zinfandel
Pinot Noir
Malbec
Muscat
VOLUME
MARKET SHARE
22%
12%
11%
8%
3%
6%
2%
3%
2%
4%
1%
1%
VARIATION (%)
4%
7%
1%
-3%
8%
4%
9%
-7%
4%
9%
92%
62%
Source: AC Nielsen. 52 Weeks A 01/09/2010
The United States wine and alcohol industry has consolidated over time and the majority of the importers and distributors are
now large companies. Although medium-sized companies have all but disappeared, some small, boutique-type importers
remain in the market. With respect to the distributors, a decade of consolidation has reduced the access to the market
through the traditional channels for medium and small producers.
An important aspect to highlight is that the amount of money Chile spends on media advertising is far inferior to that of its
competitors. Although the country’s spending per case has remained constant, it is still far below that of its competitors.
GRAPH 36: IMPORTED WINE PER CASE ADVERTISING BY COUNTRY OF ORIGIN
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
France
0
Italy
2000
2001
2002
2003
2004
2005
2006
2007
2008
Australia
Spain
Source: Impact Databank, 2009
96
Chile
CANADA
Canada’s economy is among the eighth largest in the world, and its population of approximately 33 million inhabitants
has a high purchasing power that is partly responsible for its great potential as a market for wine and other spirits. Wine
consumption is growing in the country as Canadian consumers become increasingly familiar with this product.
Of the $18.8 billion of alcoholic beverages sold at the retail level in 2007/2008 in Canada, beer was the most popular and
accounted for $8.8 billion, followed by wine with $5.4 billion, and spirits at $4.7 billion. Although Canada remains a country
that traditionally consumes beer, wine consumption has increased persistently over the past ten years. Canadian consumers
are becoming increasingly familiar with the world of wine. They seek out new things, attend wine tastings and wine fairs,
and take wine tours at growing rates. Annual consumption is 15 liters per capita among the adult population and 23 liters
per capita among regular wine drinkers. Of the 26.7 million adults in Canada, 60%—16 million people—are regular
wine drinkers.
Wine production in Canada is low and is mainly concentrated in the provinces of British Colombia and Ontario, and primarily
sold in the domestic market. Local production supplies approximately 28% of the market, while imports account for the
remaining percentage (72%).
GRAPH 37: WINE CONSUMPTION BY ORIGIN (2009)
120%
100%
80%
28%
60%
40%
72%
20%
0%
National
Imported
Source: Red Book. Nov 2009
The provinces of Quebec, Ontario, British Colombia, and Alberta consume the most wine, with 36%, 31%, 16% and 9%,
respectively. Volume and sales of imported wines have recently begun increasing at a faster rate than those of domestic
wine. This has occurred despite the fact that prices of imported wine have risen far more than those of domestic wine.
In 2009, for example, sales of imported wine grew by 3.2% compared to 1.8% for domestic wines.
97
The leaders of the wine market are France, Australia, Italy, and the United States. Chile is the Canadian market’s fifth largest
external wine supplier and accounts for 5.4% of the market. Most Chilean wine is sold in the provinces of Ontario (41%),
British Columbia (20%), Quebec (17%), and Alberta (15%). In 2009, the volume of Chilean wine sold grew faster than the
market (7% versus 4%).
The existence of 12 Liquor Boards with complete decision making power over which wines are imported and how they are
marketed and distributed, means that in practice there are 12 different markets in Canada, each controlled by a monopoly.
UNITED KINGDOM
With close to 900 million liters of wine imported each year, the United Kingdom is one of the world’s largest wine markets
as well as one of the largest importers of Chilean wine. In terms of volume, this market receives 23% of all Chilean wine
exports, and 17% of all sales.
Domestic wine production is almost non-existent, which produces strong competition. The margins of distribution and the
high taxes on alcohol have a definite effect on this market.
Despite an unfavorable economic situation, wine sales in the United Kingdom continue to show a slight growth; total volume
sold has risen by 3%, primarily due to an increase in the off-trade. Overall, 82% of wine sales in the United Kingdom occur
in the off-trade, while 18% are sold on-trade.
While Old World countries have held onto their off-trade market share, the trend is favoring New World countries.
In the off-trade segment, Chilean wines account for 9.4% of market volume and 9% of value. New Zealand and Chile are the
fastest growing importers in terms of sales, with 38% and 26%, respectively.
Italy, Portugal, and Chile have increased their market share the most in the on-trade segment over last year with 19%, 17%,
and 16% growth, respectively. Meanwhile, the market shares of Germany, Australia and France decreased by 27%, 13%,
and 9%, respectively.
98
TABLE 40: MARKET SHARE OF CHILE AND ITS COMPETITORS BY VOLUME (2010)
COUNTRY
OFF TRADE
%
21
12
15
14
12
3
7
9
1
3
Australia
France
United States
Italy
South Africa
Germany
Spain
Chile
Argentina
New Zealand
ON TRADE
12
24
12
24
5
3
5
11
3
2
Source: AC Nielsen, March 2010
BRAZIL
Until very recently, wine drinking in Brazil was limited to affluent individuals with refined tastes. In more recent times, wine
has become as accessible as any other beverage, more reasonably priced, and easy to find and to buy.
According to experts, the dramatic rise in wine consumption began in 2002 and 2003 when South American wine imports,
mainly from Chile and Argentina, were first mass marketed in supermarkets. Three years ago, domestic wine accounted for
53% of all wine sold in Brazil. Today, only three out of every ten wines offered for sale are Brazilian. Four of the remaining
seven are South American wines. The figure below shows the evolution of wine imports to Brazil.
GRAPH 38: EVOLUTION OF WINE IMPORTS BY VOLUME
70
60
50
40
30
20
10
0
2003
2004
2005
2006
2007
2008
2009
Source: Uniao Brazileira de Vitivinicultura
99
GRAPH 39: EVOLUTION OF WINE IMPORTS BY VALUE
250
200
150
100
50
0
2003
2004
2005
2006
2007
2008
2009
The consumption of imported wine is primarily concentrated in the region of Sao Paulo and in the south and south-eastern
zone of the country.
GRAPH 40: REGIONS OF BRAZIL WITH THE HIGHEST CONSUMPTION OF IMPORTED WINE
North and
North-east
Rio de Janeiro &
Central-West
South & South-East
(excluding Sao Paulo & Rio)
100
Chile leads imports to Brazil with 34% (US$61 million), followed by Argentina (22%), Italy (13%), Portugal (13%), France
(10%), and Spain (4%). In the past four years domestic wine sales have increased by 23.9% on average, more than imported
wine (22.8%).
GRAPH 41: IMPORTS BY COUNTRY OF ORIGIN (MARKET SHARE 2009 – VALUE)
40
35
30
25
20
15
10
5
0
Chile
Argentina
Italy
Portugal
France
Uruguay
Scotland
Germany
Africa
United
States
Others
Wine sales in Brazil come primarily from supermarkets, which accounts for 49% of all sales, followed by other stores (23%)
and restaurants (16%).
According to Brazilian Wine Institute projections, per capita wine consumption in Brazil is presently 1.8 liters per year and is
expected to rise to 9 liters per capita over the next 15 years.
101
ASIA
China
China is a wine producing country; it has approximately 475,000 hectares of vineyards (including grapes for fine wine, table
wine, and raisins) and produces 700–800 million liters of wine. It imports another 6.3 million cases of bottled wine and
consumes 72.7 million cases of table, sparkling, fortified, and other wine. Table wine is the most popular category, and its
consumption has grown 16% over the past four years. Consumption of sparkling wine, while still low, has also grown quickly
since 2004 (15%). In the table wine category, red wine continues to be the biggest seller (87%).
Wine is still an emerging industry in China and accounts for just 6% of all alcoholic beverages sold in this country. The
four most popular alcoholic drinks in China are beer, wine (primarily domestic and imported red wine), and Chinese and
western spirits.
China has a population of 1.33 billion people, 723 million of whom are between 18 and 50 years of age. Of these, 325 million
are city dwellers and 22.8 million are in the upper social class (with family income above 100,000 RMB). A sub-set of this
group (19 million) consumes wine made from grapes, and 76% (14.3 million people) of that group drink imported wines. We
can therefore estimate that in 2010 there are 23 million Chinese consumers who can afford to purchase imported wine and
14.3 million who currently drink imported wine.
Approximately 63% of China’s wine drinkers are men and 37% are women; 34% are 29 or younger, 42% between 30 and 39,
and 26% are 40 to 50 years old.
It is important to note that increasing numbers of Chinese women are buying wine, especially younger women, primarily due
to the flavor, associated lifestyle, and this particular group’s search for sophistication and life style.
With regard to geographic zones, the most traditional cities such as Beijing and Wuhan primarily consume traditional
spirits, while residents of cities such as Shanghai tend to have a higher income, more education, and be more open to
imported wine.
In terms of consumption by country of origin, 90% of the wine consumed in China is domestically produced. The remaining
percentage is divided among France, Australia, Italy, Chile, the United States and others.
In 2008, approximately 6 million cases of table wine were imported into China: 2.6 million from France; 1.3 million from
Australia; 0.6 million from Italy; 0.5 million from Chile, and 0.4 million from the United States.
102
TABLE 41: CHINESE WINE IMPORTS BY COUNTRY OF ORIGIN (2008 / 2007)
COUNTRIES
OF ORIGIN
France
Australia
Italy
Chile
United States
Spain
Argentina
Germany
South Africa
Romania
TOTAL IMPORTED
RK
1
2
3
4
5
6
7
8
9
10
QUANTITY
(LITERS)
22,945,458
11,628,067
5,053,292
4,206,324
3,867,322
3,140,280
1,527,657
1,415,592
977,344
873,420
57,617,036
2008
CIF AMOUNT
(US$)
126,938,997
54,888,880
21,612,330
14,395,433
14,764,441
11,996,590
5,077,472
8,039,803
3,443,868
3,041,848
276,307,400
MARKET
SHARE
39.82%
20.18%
8.77%
7.30%
6.71%
5.45%
2.65%
2.46%
1.70%
1.52%
RK
1
2
3
5
6
4
8
7
10
12
QUANTITY
(LITERS)
15,517,251
8,783,927
5,113,181
2,646,432
2,358,539
3,399,425
972,202
1,127,856
643,950
156,617
42,337,976
2007
CIF MOUNT
(US$)
82,727,370
36,461,933
17,873,675
8,491,271
8,589,790
12,447,929
2,583,217
5,032,372
2,018,049
338,243
184,132,019
MARKET
SHARE
36.65%
20.75%
12.08%
6.25%
5.57%
8.03%
2.03%
2.66%
1.52%
0.37%
Source: CEAP, UDP 2010
As the above figures show, France is the most respected country in this market, and therefore its wines are the most
commonly given as gifts by Chinese consumers. However, the market is displaying signs of more openness to New World
wines, and consumers are becoming more aware of the attractive price-quality ratio that these wines offer. The most popular
New World wines in China are from Australia and Chile, followed by the United States and South Africa. Old World countries
such as Spain and Italy are also respected, but are not as familiar to Chinese consumers.
Recent market trends worth noting include:
• A strong tradition in purchasing alcoholic beverages: The Chinese are accustomed to spending a considerable
portion of their disposable income on alcohol. A trend toward purchasing less beer and spirits and more wine has
been observed.
• Economic growth: China currently offers interesting economic opportunities. The middle class is growing,
consumers are more confident, economic growth is strong, and the population is increasingly urban.
• More receptive to western countries: While Chinese culture is strongly based on tradition, the cultures of western
countries places greater value on freedom and independence. Positive identification between western products
and the lifestyles of the people consuming them make these products more desirable. The Chinese population
seeks to improve its quality of life.
Imported wines are primarily consumed in romantic settings, whether in a café, club, or bar, or during business meetings.
Domestic wine, on the other hand, is more commonly consumed with meals in restaurants or at home or on social occasions
such as weddings and other gatherings of friends and family.
The factors that most affect the decision to purchase imported wine are the country or region of origin, recommendations by
family and friends, label information, quality indicators, and familiarity with the colors and text on the label (for example,
red signifies luck in Chinese culture). On the other side, the major barriers to purchasing imported wine are the price, which
makes it more suitable for social occasions; the enormous variety of imported wine available, which confuses consumers; the
lack of differentiation among available alternatives; and the difficulty consumers have in understanding a different language.
103
In summary, while the market is still small, there are clear opportunities for growth. Wine also has the benefit of being more
positively perceived than other alcoholic beverages in China. Two current trends also favor the consumption of imported
wine in China: the country’s increasing openness to western culture, especially lifestyles and products, and the perception
of quality. Price, language, and unfamiliarity with the category are barriers that should be taken into account when
designing a strategy for market penetration. The principal challenge is to find simple ways of obtaining the commitment
of Chinese consumers.
Japan
Consumption of wine in Japan is low compared to other products such as beer, sake, and sho-chu. Wine is relatively new to
this market and has to compete with local beverages. Per capita wine consumption in Japan is approximately 2.0 liters per
year, which is quite low compared to traditional wine-drinking countries. While young men do not find drinking wine very
attractive, there are genetic reasons that hinder people from consuming more alcoholic beverages and favor the consumption
of alcohol-free or low-alcohol drinks.
GRAPH 42: MARKET SHARE OF ALCOHOLIC DRINKS BY TYPE
Others 11%
Whisky 1%
Wine 2%
Liquors 8%
Beer 39%
Sho chu 12%
Sake 13%
Happohshu 14%
Wine consumption varies by location in Japan. Wine is more popular, for example, in urban areas such as Tokyo. However,
70% of Japan’s population lives in rural areas.
The three largest suppliers of the Japanese wine market are France, Italy, and the United States, while four other countries
share fourth place: Australia, Chile, Spain, and Germany. In 2008, Chile was able to establish itself in fourth place, leaving
Australia in fifth place.
104
GRAPH 43: EVOLUTION OF WINE IMPORTS BY COUNTRY OF ORIGIN
50
45
40
35
30
France
25
Italy
20
United States
15
Chile
Germany
10
Spain
5
Australia
Others
0
1993
1997
2001
2003
2005
2007
2008
Source: WANDS, 2009
Japan’s population is aging rapidly, which experts believe will have a positive impact on the wine sector. Older consumers
have more purchasing power and want to enjoy retirement, traveling, and drinking good quality wine. Despite the different
crises that the country’s economy has experienced, Japan continues to be the second most powerful country in the world,
with one of the highest consumption levels and most purchasing power. Most members of Japanese society are familiar with
wine, which is readily available at accessible prices in this country.
Supermarkets and other shops continue to be the most common point of sale for wine in Japan, representing 61% of the
market. In regard to price, the 500–1000 yen range (US$ 5.50–11.10) continues to be the most popular, although most
growth since 2006 has been in the 1500–2000 yen range (US$ 16.70–22.20).
TABLE 42: MARKET SHARE OF CHANNELS AND PRICE RANGES BY VOLUME
RETAIL PRICE
PER BOTTLE (YEN)
> 10,000
5,000-10,000
3,000-5,000
2,000-3,000
1,500-2,000
1,000-1,500
500-1,000
<500
TOTAL
ON-PREMISE
VOLUME
30,000
109,000
286,000
717,000
717,000
1,594,000
2,103,000
111,000
5,667,000
%
0
1
2
5
5
11
15
1
39
AT HOME
VOLUME
25,000
75,000
234,000
962,000
727,000
2,531,000
4,168,000
79,000
8,803,000
%
0
1
2
7
5
17
29
1
61
TOTAL
VOLUME
56,000
184,000
521,000
1,678,000
1,444,000
4,125,000
6,271,000
190,000
14,470,000
%
0
1
4
12
10
29
43
1
100
2008 VS
2006 %
–9.7
–5.6
–9.2
–7.6
18.70
7.00
1.00
-40.30
1.60
Source: Wands Review 2009
105
Consumer trends include a swing toward dry red wine. There is also more interest in organic and environmentally-friendly
products in Japan. Consumers are becoming more willing to accept wine from other countries of origin such as Italy, Chile,
Spain, and the United States, among others.
Wine consumption is estimated to reach three liters or more per capita in the next few years. Reasons for this include
the increasing westernization of Japanese lifestyles, wine’s attractiveness as representative of refined tastes, the greater
availability of wine on the market, greater concern for health, more western restaurants in the country, and a new tendency
to drink wine by the glass in restaurants, to name a few.
Korea
According to a report of the Korean Ministry of Economy and Finance (MOFE), per capita alcohol consumption in Korea is
among the highest in the world. Social life in Korea is highly valued, and there are many occasions when the consumption
of alcoholic beverages is expected. Beer and soju (a traditional Korean beverage) are the drinks most in demand. The wine
market in Korea has grown by more 20% per year on average since the liberalization of the country’s market in 1988. Wine
currently accounts for close to 2% of alcoholic beverage sales in this country.
TABLE 43: ALCOHOL CONSUMPTION IN KOREA (LITERS PER CAPITA)
Soju
Beer
Wine
Whisky
2002
31.38
54.08
0.55
1.29
2003
32.4
51.6
0.66
1.07
2004
33.4
51.26
0.72
0.86
2005
33.17
48.23
0.82
0.90
2006
35
48.27
0.95
0.86
2007
34.35
49.54
1.24
0.97
2008
35.42
51.03
1.15
0.86
Source: Korean Customs Agency, Korean Alcohol & Liquor Industry Association and Korean Statistics Information
Domestic wine production is almost nil and is expected to shrink to zero due to the high cost of maintaining vineyards and
the poor quality of the wine produced. Some Korean companies, instead of cultivating vineyards that are not profitable in the
country’s climate, have chosen to import bulk wine and bottle and sell it under their own brand names. Therefore virtually all
wine consumed in Korea comes from imports. Given the limited production of domestic wine and the lack of information on
stock, the imported wine volumes can be assumed to be indicative of wine consumption in general in the country.
While consumption is still limited (annual per capita consumption is just half a bottle), wine consumption in Korea has seen
strong growth since 2000, primarily due to increased awareness of its positive health effects, which is especially relevant
to young adults, the increasing adoption of western customs, the rise in personal income, and the increased consumption of
alcoholic beverages by women (especially young women).
Young professionals 30 to 40 years of age and successful professionals 40 to 50 years of age are the most typical consumers
of wine in Korea.
Wine imports have grown by an average of 30% per year over the last four years. It is important to note that the drop in the
last year is mainly due to the economic crisis that affected markets worldwide.
106
GRAPH 44: KOREAN WINE IMPORTS (THOUSANDS US$)
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
1992
1994
1996
1998
2000
2002
2004
2006
2008
2009
(Jan-Oct)
Source: The Korea Times 12/08/2009
Lower-priced products (less than 30,000 KRW per bottle) account for 50% of all wine consumed. Red wine accounts for more
than 75% of all wine sold.
TABLE 44: DEMAND SEGMENTATION BY PRICE
LOW PRICE
(UNDER 30,000 KRW)
58%
MODERATE PRICE
(30,000-70,000 KRW)
29%
HIGH PRICE
(OVER 70,000 KRW)
13%
Source: Narafood Co
The country’s large urban centers (Seoul, Inchon, and Busan) are its leading consumer zones. In regard to channels, large
supermarkets and discount stores account for 55% of the volume of wine sold, followed by specialty shops (8%) and
convenience stores (4%).
Exports of Chilean wine to the Korean market have grown considerably, from a 2.8% market share in 2001 to 22% in 2009.
Chile has become the second largest supplier of wine to Korea after France. Statistics from 2008 and 2009 show that Chilean
wine has already surpassed French wine by volume.
107
GRAPH 45: MARKET SHARE OF IMPORTS
35%
30%
25%
20%
15%
10%
5%
0%
France
Chile
Source: ProChile 2010
Italy
United States
Germany
Australia
% Volume
% Value
Korea has become the 16th largest international market for Chilean wine exports, surpassed only by Japan and China in
the East Asian region. Contributing factors for the growth of Chilean wine sales in that country include the increasing
openness of the Korean market, steady economic growth in Korea after the 1997/98 crisis, changes in consumer habits and
preferences, free trade agreements (FTAs) the country has entered into; the greater variety of Chilean wines exported, and
the aggressive strategy of Chilean wineries in this market, among other factors.
The wine market in Korea is still young, with importation of wine liberalized in 1988, just 18 years ago. Before that time,
wines were only imported through the Korean National Tourism Corporation, which was the official supplier of hotels in the
country. Price and origin are the two most important factors in purchasing decisions, which is usual in young markets and
explains the popularity of both French and Chilean wine. Initially, demand was concentrated on sweet and fruity wines of
moderate to low quality; today, however, the greatest potential for growth is in the medium to high quality wines category,
especially red wines.
108
109
CONTACT INFORMATION
Wines of Chile, Main Office
Av. Luis Pasteur 5280, Oficina 402
Vitacura, Santiago, Chile
Phone (+56-2) 218-0600 / Fax (+56-2) 218-0040
Managing Director: Juan Somavía, [email protected]
Wines of Chile UK & Europe Office:
13 Hermitage Parade, High Street, Ascot, Berkshire, SL5 7HE
United Kingdom
Phone (+44-0)1344-872229 / Fax (+44-0)1344-872227
Europe Director: Michael Cox, [email protected]
Wines of Chile US Office
221 Centre Street
New York, NY, USA 10013
Phone (+1-212) 219-9350 / Fax (+917) 591-1336
US Director: Lori Tieszen, [email protected]
W W W.VINOSDECHILE.CL
W W W.WINESOFCHILE.ORG

Info 12 04 16 Wines of Chile Plan Estratégico 2020

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