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Chile Seeks Greater Recognition For Its High-End Wines

October 29, 2014

Value wines may still dominate Chilean wine consumption in the U.S., but Chile’s vintners are striving for better awareness of their higher-end offerings.

“The response to trying to drive above-$15 wines has been difficult in the face of a tepid economic recovery,” argues Michael Preis, vice president of marketing and portfolio director for Santa Rita at Palm Bay International. “But as Chilean wines garner higher scores, it’s been easier to gain distribution and share of mind.” Santa Rita’s Triple C 2008 ($40) earned a place among Wine Spectator’s Top 100 last year.

Alex Guarachi, owner and founder of TGIC Importers, also invokes the power of critical acclaim in driving gains for the category. “One of our wines, Montes Alpha Cabernet Sauvignon that sells for around $25, got great reviews, and we’ve sold a ton of wine,” he says.

One seminal moment in Chile’s effort to capture the high end came at this year’s New York Wine Experience, which included a presentation entitled “Icons of Chile”—the first in-depth tasting of Chilean wines in the history of the event. Four wines were featured: Viña Montes Folly Santa Cruz 2010 (95 points from Wine Spectator, $90 on release); Concha y Toro Cabernet Sauvignon Puente Alto Don Melchor 2010 (95 points, $125 on release); Viña Almaviva Puente Alto 2005 (95 points, $75 on release); and Lapostolle Clos Apalta Colchagua Valley 2005 (96 points, $75 on release). The Lapostolle offering was Wine Spectator’s Wine of the Year in 2008, the first ever from Chile.

In the mainstream tiers, Chilean wines at $8-$15 are up by both volume and value this year, says Marc Goodrich, president of Concha y Toro’s importer Excelsior Wines. “In the $20-plus price segment, we’re starting to see an uptick, although we still haven’t fully recovered in this price range since the 2008 market plunge,” Goodrich adds.

“The first couple of months of this year were challenging, but since March or April things have bounced back,” observes Andy Gesell, vice president and South American manager at Vineyard Brands, adding that competition from California wine remains intense. Palm Bay’s Preis also notes a slightly better environment lately. “Retailers have stopped encroaching on Chilean shelf sets with more Malbec from Argentina,” he says.

One premium Chilean winemaker now gearing up for a U.S. push is Carmen, owned by Chile’s Grupo Claro and marketed in the U.S. by Trinchero Family Estates. Carmen is led by its Gran Reserva series of varietals, all retailing at $15 a 750-ml. “The Carménère is doing particularly well, while the Chardonnay, Petite Sirah and Cabernet Sauvignon are gaining traction,” says senior vice president of marketing Dave Derby. In September, Trinchero launched the new Wave Series from Carmen, a more Millennial-focused label sourced from the Leyda Valley. The line includes a Left Wave Sauvignon Blanc and Right Wave Pinot Noir (both $11.99 a 750-ml).

Last year, total Chilean wine volume in the U.S. fell 2.5% to 8.78 million cases, according to Impact Databank. Cabernet Sauvignon and Chardonnay remain the leading varietals for Chilean wine, each at 1.2 million cases in the U.S. market. Cabernet declined 7.7% last year while Chardonnay remained steady, Merlot slumped 12.5% to 700,000 cases and Sauvignon Blanc was flat at 500,000 cases. Nearly two-thirds of Chile’s volume in the U.S. consists of just two brands—Concha y Toro with a 33% share and Corbett Canyon with a 30% share—both of which compete heavily in the below-$10 area.

For a full report on the Chilean wine category, see the October issue of Market Watch.

 

 

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