Chilean Wine Continues To Diversify, With Labels Thriving At High and Low Price Tiers

Chilean wines have been a force in the U.S. market for decades, but it’s only relatively recently that they’ve seen growth in a wider array of price points. Thomas Murray, president of retailer Bottle Shop in Spring Lake, New Jersey, said strong demand for Chilean wines is concentrated at the super-premium end of the business. “My well-heeled customers are looking for value out of Chile and Argentina,” he says. “If the wines fall into the $15-$25 range, people buy them. Ten years ago, nothing over $15 would move.”

Ben Broidy, wine director at Rivera restaurant in Los Angeles, says his wine list now includes about 75 Chilean wines ranging from about $50 for 2008 Casa Lapostolle Cuvée Alexandre Cabernet Chardonnay to $160 for Almaviva 2007 Bordeaux Red Blend, the joint venture between Baron Philippe de Rothschild and Vina Concha y Toro.

“Chile has an opportunity—and I think they’ve been trying to capture this—to break into the upper range of wines recognized for delivering quality,” says James Galtieri, president and CEO of Pasternak Wine Imports, which imports Chilean label Viña Los Vascos.

Concha y Toro dominates the Chilean wine category at 3.1 million cases. Its Frontera line accounts for 80% of the brand’s volume in the United States and sells for less than $5 a 750ml on average, but Concha y Toro has labels at numerous higher price points. Ed Barden, director, New World portfolio for the brand’s U.S. marketer Banfi Vintners, acknowledges that there’s heavy price competition among some brands. “But that’s not what we’re trying to do,” he says. “We’re looking to increase the perceived value of our wines.”

Galtieri of Pasternak also sees aggressive discounting among certain brands. “Chile still represents value, but usually in (the same mainstream) grape varieties that are coming in from every part of the globe,” he says. Argentina, of course, can claim Malbec, which has catapulted it into the limelight. The closest equivalent Chile has is Carmenère. Several producers are pushing single varietal Carmenère, but it’s only begun to make inroads.

“Carmenère is picking up some steam and we’re certainly doing our part,” says Banfi’s Barden, noting that it’s growing along with Cabernet Sauvignon, Sauvignon Blanc and Chardonnay. Michael Preis, vice president of marketing for Palm Bay International, which markets the Santa Rita brand, says Chile “owns the Carmenère story, and it has good momentum.” Galtieri has doubts that Carmenère can duplicate Malbec’s sucess. “If Chile can make it as user-friendly as Argentina has made Malbec, I’d say yes,” adding that Carmenère “is not an easy grape.”

In any event, Chile’s progress on building a more upscale pricing structure has been remarkable, led by labels like Casa Lapostolle, Almaviva and others. “Chile is a great value at all price points—yes, it’s great at under $10, but at $12.99, at $14.99 and even at $49.99, put head to head with wines from other areas, it’s a great value,” says Larry Challacombe, general manager and co-founder of Berkeley-based Global Vineyard Wine Importers, whose portfolio includes 11 Chilean brands, all of which retail for $10 or above per 750ml.

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