Chilean Wine Finds Footholds At The U.S. Market’s Higher EndAugust 22, 2019
Most major Chilean wine brands sell at the premium and sub-premium tiers, and the lower end’s dominance has long weighed down the category. As a result, Chilean import volumes in the U.S. market continue to tumble, with bottled wine falling 7.1% last year to 5.54 million 9-liter cases. With bulk shipments included, last year’s decline was even more acute, with total volumes dropping 19.7% to 12.1 million cases.
At the higher tiers, the trend is different. “We’re accustomed to competing in a context of soft-to-declining demand for Chilean wines,” says Diego Lo Prete, senior vice president and general manager at MundoVino, a division of Winebow. “Despite those circumstances, our Chilean portfolio is healthy and growing.”
Lo Prete highlights Casa Lapostolle, whose flagship is the Clos Apalta label, as well as Cousiño-Macul with its Bordeaux-style blends from the Maipo Valley and Carménère-focused Terranoble. “They’re delivering growth with exceptional value,” he adds.
The big-volume Chilean wine brands are where the problems lie. The top ten Chilean wine brands last year combined for a 5.5% decline to 4.9 million cases, according to Impact Databank. Concha y Toro remains the U.S. market’s biggest Chilean brand, but its depletions slumped 9.3% to 2.1 million cases. Corbett Canyon, ranked second at 1.33 million cases, showed a 7% decline. In all, eight of the top ten Chilean wines lost volume last year. The two growth brands—Natura and Provisions—had strong showings, with Natura up 11.2% to 128,000 cases and Provisions more than doubling to 103,000 cases. Natura is benefiting from consumer interest in organic wines.
Many Chilean wine importers believe that better days lie ahead. “Chile’s winemakers have started focusing on expressions like old vine Pais and old vine Carignan, as well as Syrah and Grenache—they’re doing exciting things,” says Larry Challacombe, president and co-founder of Berkeley, California-based Global Vineyard Importers, which handles 11 Chilean brands, including Viña Maquis, Viña Penalolen, and Domus Aurea.
One Chilean winemaker embodying Chile’s transformative efforts is Viña Errázuriz, imported by Vintus. Three years ago, the Errázuriz group was producing around 1.25 million cases annually. Today, it’s close to cutting production to around 700,000 cases, by eliminating the lower end of the portfolio.
Bill Hayes, wine buyer for BevMo, sees many prominent Chilean labels doing well at his stores, specifically those above $10. “All the big brands that people recognize—Casillero del Diablo, Matetic, Concha y Toro, Montes—are still very viable,” he says. “When they go on sale, they sell.”
Market Watch has the full story on Chilean wine’s current U.S. fortunes.—David Fleming and Carol WardSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.