Chile raises its game
In the uncertain political and economic times created by Brexit, Chile looks like a wine- supplying country that could bring a bit of reassurance and calm to the market.
Its free trade agreement with the EU means its producers and UK importers are already locked into a smooth way of doing business and its wines have grown a reputation for reliability and good value for money, with a steady upward curve in imports over several decades.
What’s more, Chile already has considerable recent sales momentum behind it. Nielsen off- trade figures for the year to March 25 saw it up 3% by value and 4% by volume, the only positive scores for growth among the top seven countries supplying wine to the UK.
Growth in the first quarter of 2017 alone was even better – 5% for value and 6% for volume against the same period in 2106, matched only by New Zealand and ahead of Argentina, one of the star performers of the past couple of years in the wine market.
Craig Durham, managing director of Buckingham Schenk, which represents Boya, Amayna and Las Rocas in the UK, says: “Strong branding, use of international varieties and affordable pricing
are the key elements which attract consumers to [Chile]”.
Ana Sapungiu MW, head wine buyer at Oddbins, says: “Chile is a solid performer of styles and international varieties that consumers like and offers great value at entry-price points”.
Joe Aylmer, buyer for Chile at Majestic, says that “the rise of varietal labelling has been vital”.
He adds: “Customers can pick up a Chilean Chardonnay, Sauvignon Blanc, Merlot or Cabernet and really know they’re going to get a textbook example at a great price.”
The looming Brexit and its impact so far on exchange rates have only strengthened Chile’s hand at accessible price points.
Sophie Wren, brand manager for Errazuriz at Hatch Mansfield, says: “The majority of other countries have increased their average bottle price this year. Retailers see Chile as a viable alternative, particularly for their entry level.”
Aylmer adds: “The pound still goes a very long way in South America. If you’re willing to trade up, you can find wines of exceptional quality in Chile just by spending a little more than the average price.”
But some argue that the issues for Chile start to appear when you take a few steps up the price ladder.
Oddbins has a Chile promotion starting in mid-September with the focus on mid-tier wines, includingweekend tastings and a customer competition to win a trip to Chile with Oveja Negra.
Sapangiu says trading consumers up in Chile can be more tricky than getting sales at the bottom end. “The category has been challenging as we are trying to educate consumers in the mid-range of £8-£15,” she says. “It’s more difficult to sell Chilean wines in this category than it is, for instance, South African wines.”
Sapungiu says Chile is hampered by a lack of adventure at higher price points. “There are image issues at mid-price and above,” she says. “Most ranges are single international varieties of generic Reserva or Gran Reserva level. You need more than that to trade up and engage with consumers.”
Terry Pennington, commercial export director for Europe at Santa Rita Estates, disagrees and thinks that Chile excels in the mid-range.
“Chile scores high in terms of value versus prices particularly in the £5-£8 price points which are working well in the market.
“However, it is the £8-£12 where the best value Chilean wine lies. Chile has many good solid commercial lines at lower prices but the consumer undoubtedly gets better value for money in the £8-£12 price point.”
Wren argues that a brand like Errazuriz allows consumers to trade up through a wide variety of price points, from the Estate Series to its top-of-the range Viñedo Chadwick label, where retail prices run well into three figures.
“Chile is now a hotbed of interesting wines and producers,” she says. “They have a strong, environmentally friendly story to tell, a breadth of varieties being planted and have lots of well-travelled winemakers making top quality wines.”
Majestic’s Aylmer says the chain has no problem finding interest further up the price scale. “Some of our best brands offer wines at different price points for different occasions,” he says. “The Santa Rita wines, for instance, are brilliant at the entry level in the 120 series, but for those happy to pay a couple of pounds more, the Medalla Real wines are serious quality and showcase real winemaking skill.
“Consumers are beginning to branch away from the safer internationally recognised varieties and into signature and forgotten varieties such as Carmenère and Pais. We’ve also seen substantial success with aromatic whites. We now stock dry Pedro Ximenez, Muscat, Gewürztraminer and Viognier.
“Old vine Carignan from Maule is something I am looking to explore further in the near future.”
Durham agrees the breadth of range is there in Chile. “Just looking at supermarket shelves today, the range of Chilean wines available starts around £5.50 and goes all the way to £35, which wasn’t the case 10 years ago,” he says.
Chile is also starting to get traction with regionality. “Errazuriz has established the Aconcagua Costa appellation,” says Wren at Hatch Mansfield. “It wants its wines to have a strong sense of place and deliver
a true expression of a particular variety from that place.”
Durham at Buckingham Schenk adds: “We are beginning to see an interest in lesser-known Chilean regions. “The Leyda valley is among them. Wines such as Amayna and Boya by Garcés Silva have been doing well for us with listings in Majestic, Soho Wine Supply and the General Wine Company.”
Aylmer sees great potential for “the phenomenal northern Rhône- style Syrah from the Elqui Valley”.
“Regionality is a slow and steady process,” says Pennington at Santa Rita. “Santa Rita owns vineyards across Chile with each region selected according to the suitability of the terroir for specific varieties.
“We have made that relevant to the person who buys the wines, so they understand that Chardonnays and Sauvignons come from many of the cooler climates, with Cabernet varieties benefitting from the warmer days and long growing season of the more central areas.”
The regional trend is limited, says Ben Smith, head of corporate communications at CyT, Chile’s biggest volume supplier. “Chile is starting to diversify with different regions, new – and very old – grape varieties coming to the fore and young winemakers trying new things,” he says.
“Even in mainstream Chilean sales, we’re seeing great growth for things like Viognier. Cono Sur Bicicleta Viognier is the top-selling version of the grape in the UK, and growing at over 27% year on year (IRI, year to July 27).
“In the independent sector, wines such as Vigno and Itata Pais have started to get a reputation and deservedly so. But in the mainstream, as is the case with Australia to a great extent, these places are too far away for the UK consumer to really understand the distinctions between one valley or region and another.”