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Chile Seeks Growth With Varietal And Regional Diversity, High-End Offerings

June 28, 2012

After a few years of essentially flat growth, Chilean wine marketers are focused on varietal diversity, emerging regions and upscale expressions to reenergize the category.

Chile’s winemakers are adding sizzle with Syrah and Pinot Noir, while also renewing their commitment to Sauvignon Blanc as well as the country’s signature varietal, Carmenère. Producers are tapping cool-climate regions to source fruit for higher-priced offerings, targeting a consumer tilt toward terroir-specific wines.

One example is category leader Concha y Toro. In March, the winemaker launched its Gran Reserva Serie Riberas (Riverbank Series), featuring six varietals sourced from banks near the Rapel, Cachapoal, Tinguiririca and Maule rivers. With total volume of 25,000 cases, the wines—Cabernet Sauvignon, Carmenère, Malbec, Merlot, Chardonnay and Sauvignon Blanc—retail at $14.99-$16.99 a 750-ml. That price tier has been showing 30% sales growth, according to Ed Barden, marketing director at Concha y Toro U.S. marketer Excelsior Wines. The Riverbank Series fills a niche between Concha’s No. 1-seller, Casillero del Diablo ($8.99-$10.99), and the Marques de Casa Concha line ($22).

By wine type, Red Blends led all Chilean wine shipments to the U.S. market last year at 1.43 million cases, followed by Cabernet Sauvignon at 909,000 cases, according to Impact Databank. Sauvignon Blanc was third-largest by volume at 625,000 cases, then Chardonnay (365,000 cases), White Blends (327,000 cases), Merlot (325,000 cases) and Carmenère (290,000 cases). Those figures exclude bulk wine, which comprised 9 million cases in 2011.

Pinot Noir (192,000 cases in bottled shipments to the U.S. last year) and Syrah (67,000 cases) remain relatively small, but they’re generating much of the excitement. Shipments of both varietals grew by 12% last year. And today Chile has 6,027 hectares (nearly 15,000 acres) planted with Syrah, a more than ten-fold increase since 1998, according to trade group Wines of Chile.

One standout with both varietals is Kingston Family Vineyards in the emerging coastal appellation of Casablanca Valley. Its Pinot Noir Casablanca Valley Alazan CJ’s Barrel 2010 ($38) received a 90-point rating from Wine Spectator, while its Syrah Casablanca Valley Bayo Oscuro 2009 ($28) scored a 91. Another star is Veramonte, with its Pinot Noir Casablanca Valley Ritual 2009 (90 points, $20) and Pinot Noir Casablanca Valley Reserva (88 points, $14), among other labels. Meanwhile, Syrah expressions from other emerging coastal appellations like San Antonio are gaining top scores, led by Matetic’s Syrah San Antonio 2008 (92 points, $86).

Chilean importers are also offering unique Sauvignon Blanc flavor profiles that don’t mimic California and New Zealand. Pasternak’s 2011 Los Vascos Sauvignon Blanc ($13.99) is sourced from the Casablanca Valley and selling well, according to vice president of marketing Gary Clayton. “It’s fresh and fruity, but less grassy than New Zealand,” he says.

Carmenère finds a home in red blends and high-end bottlings. Leading the way is Lapostolle’s Clos Apalta ($95), which comprises mostly Carmenère, along with Cabernet Sauvignon and a small amount of Petit Verdot. Other Chilean offerings are Lapostolle Carmenère ($53), Los Vascos Cabernet Sauvignon ($42), Domus Aurea Cabernet ($105) and Almaviva ($205), a red blend from Concha y Toro and Baron Philippe de Rothschild SA.

The popularity of Chile’s Red Blend segment tracks with Chile’s courting of millennials. Shaw-Ross International has seen success with Epica ($10), made by Viña San Pedro. Launched in March in New York, Florida, Illinois, Michigan and New Jersey, Epica targets the 21- to 30-year-old demographic. First-year production is 50,000 cases of Epica Red Blend, Chardonnay, Sauvignon Blanc and Cabernet Sauvignon. Shaw-Ross’s entry-level Gato Negro brand ($5.99 to $6.99 a 750-ml. bottle) continues to be a strong category player at 655,000 cases.

The Chilean wine category fell 2.4% last year, according to Impact Databank, with bottled wine declining by 3.5% and bulk wine slipping 1.1%.

Leading Chilean Wine Brands in the USA
(thousands of nine-liter case depletions)
Brand Importer 2010 2011 Percent
Change
Corbett Canyon* The Wine Group 2,915 3,000 2.9%
Concha y Toro Excelsior Wine Co. 3,105 2,985 -3.9%
Gato Negro Shaw-Ross International Importers Inc. 655 655 0.0%
Santa Rita Palm Bay International 430 505 17.4%
Walnut Crest Banfi Vintners 300 275 -8.3%
Los Vascos Pasternak Wine Imports 160 170 6.3%
Total Leading Brands 7,565 7,590 0.3%
*excludes White Zinfandel (from California)

Source: IMPACT DATABANK

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