Cultivating change

20 June, 2016

The view of managing director and chief winemaker of the boutique Tabalí winery is less rosy. Felipe Müller East says: “Our position, in my view, is not so good. We are known for good value for money but not for more serious and high quality wines. The mistakes were made by the Chilean wineries decades ago when they made the decision of making the easiest thing, selling a lot, but cheaply. They didn’t create an image. They only wanted fast profitability of their projects. They didn’t have a long-term view of the Chile brand. Now it is quite difficult to change that in consumers’ minds.

“In Tabalí we have to deal with this cheap reputation and it makes it very hard to succeed. Chile has to change this, urgently. Support smaller wineries and grape producers that have good quality and that show terroir wines. I think my generation is taking the challenge of changing the Chile perception in the global markets. Of course the big brands will always dominate the sales numbers with cheaper wines, but we must have a large group of wineries delivering very good quality and character in their wines, then Chile would start to be taken more seriously in the higher level of wines,” says Müller East.

Felipe Bravo, commercial director of the ACW group, adds: “There is still a gap in labour costs against Old World growers but Chile is rapidly reaching their costing standards. Even today growers are converting inefficient plantations with new technologies which in the end will lead to more efficient estates.

“We are still the great value-for-money producer country. Trying to keep that message but on upper ranges should be our flag to push. In the current world economic situation, we are in an excellent position, receiving consumers who are trading down.”

But Bravo adds that bulk exports are damaging to such aspirations.

EXPORT MARKETS

Which countries are Chilean’s best export markets? Domeyko says: “The main markets for Chilean wine are the US, UK, China, Japan, Brazil, Netherlands, Canada, Denmark, Ireland and South Korea. Although each of these markets presents export opportunities, certainly the highest growth rate is shown by China, a new market for wine that ranked as the second destination for Chilean wine exports in 2015, in value terms. Nevertheless we believe a great potential for our premium wines lies in Europe, Canada and the US.

“China is undoubtedly one of the most attractive emerging countries for Chilean wine producers. However, to be present in this Asian market it is necessary to understand the cultural, economic, legal and political barriers the country presents, frequently more complex than those of other markets. Also, the sheer size of the country and differences between provinces make it a fragmented market and a huge challenge for any producer and any brand to achieve nationwide and multi-channel presence,” he says.

“Another important point is wine consumption, which in China is less developed than in other countries. Consumers tend to seek simple wines and this is where New World producers, including Chile, have managed to take advantage of simplicity as a strength.

“The wine industry in China is at an early stage, so another challenge is to educate consumers on how to drink wine and its different varieties,” says Domeyko.





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