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Chile: high and mighty

Chile is repositioning itself as a producer of top quality, higher-priced wines and has lots of ideas about how to attain this goal, as Patrick Schmitt MW discovers.

If one were asked to name a single New World country that has most successfully sated a drinker’s thirst for inexpensive, fruity and consistent wines, then the answer would have to be Chile. The nation is home to near-perfect viticultural conditions, an almost 500-year winemaking history, and some of the biggest and most efficient wine-producing companies on the planet. It is a country with relatively inexpensive labour and a land that is well-suited to growing the full gamut of the globe’s most sought-after international grapes, which are, in reds, Cabernet Sauvignon and Pinot Noir, and in whites, Sauvignon Blanc and Chardonnay. Together, these facets have ensured that Chile has been able to supply some of the most competitive wine markets with products that are desirable in terms of taste, style, varietal composition, and, crucially, price. In short, it serves the mainstream market more broadly and better than any other wine-producing country outside of Europe. But, being brilliant at inexpensive wine is not something it wants to be famous for. It wants the world to wake up to its fine wine credentials. And in some markets, this will require a repositioning. In others, it will necessitate the careful establishment of higher-priced offerings before the entry-level wines take hold.
But why do this, you may be wondering? Chile, after all, represents a tale of triumph in the modern history of wine – a time when fermented grape juice is not a limited luxury but a widely available affordable indulgence.
Such change is necessary for the long-term health of the country’s wine industry. In terms of demand, growth in key wine-importing nations is coming at higher-priced segments, while, in terms of supply, the margins for making inexpensive reds and whites in Chile
are diminishing, if not becoming non-existent.
It’s also vital that Chile escapes the trap of commoditisation: it needs to add value to ensure it’s not just supplying wine that could be acquired elsewhere. In other words, it needs to protect its wine business against imitators.
To do this it is using a four-pronged approach incorporating a boost to the international image of Chile using its culture and cuisine; a push on the country’s sustainable winemaking credentials; an emphasis on its innovative winegrowing approaches; and, crucially, a promotion of the nation’s key viticultural areas. As a single overt signal of intent by the country’s winegrowers to focus on the more upmarket end of their wine scene, Wines of Chile will from now on only support activities that promote ‘premium’ wines. And by premium, the organisation means those wines with an FOB export price that is US$60 or more per case, which loosely translates into wines that retail for £10 or more per bottle in the UK, above US$15 in the US, and more than RMB150 in China. “We really want to premiumise, because we have great wines and we need to change the perception of Chile to one of a premium wine producer,” explains Angélica Valenzuela, commercial director at Wines of Chile.

Premium wine exports

However, currently, Chile’s ‘premium’ wine exports are relatively small – if growing. Indeed, Valenzuela acknowledges that as much as 80% of the nation’s shipments are below the $60 FOB per case mark. In China, which is Chile’s biggest market by value – where Chile is the third-biggest imported wine country after France and Australia – the South American nation’s average FOB case price is US$31 (£22). In the US, meanwhile, which is Chile’s largest market by volume, that average is slightly less than US$28, while in the UK, it’s US$23.
“We have a lot of work to do,” admits Valenzuela. Her key focus markets are China, the US, Brazil and the UK, but it’s China where her hopes for Chile are the highest. “I am very focused on China because it is a growing wine market, and per capita consumption is very low, just 1.6 litres per capita, and imported wine alone is less than 1 litre, so the potential is huge.”
In this market, where Chile has a good image for wine, it’s a question of “positioning”, which Wines of Chile is focusing on through educational programmes, as well as other forms of marketing focused on Chile’s culture and landscape under the strapline: ‘Love Wine, Love Chile’.
In more established markets for Chilean wine, such as the US and the UK, it’s an issue not of positioning, but “repositioning”, admits Valenzuela. For this, education is also necessary, along with blind tastings of Chilean wines and those of competitor countries to show off the high-quality produce from Chile at ‘premium’ prices.
But two key elements are being increasingly used by Chile’s major wine producers to encourage consumers – be they existing or new to the nation’s wines – to trade up to better and pricier options. One of these is the launch of innovative products, sometimes employing obscure grapes, unusual winemaking approaches, or extreme vineyard sites.
As the drinks business has pointed out over recent years, Chile has been embracing its extremities, pushing both the latitudinal and altitudinal limits of its viticultural possibilities, while also raising the profile of its oldest vineyards and most historic grapes – notably País, the ‘Mission’ grape brought to Chile by the Spanish Franciscan priests in the 16th century.
The country’s winemakers have also been increasingly experimental in the cellar, trialling the more funky techniques of our times, from fermentations in concrete eggs to whites with extended skin contact – otherwise known as orange wines. The breadth of viticultural and winemaking trials in Chile seems greater than any country in the world – not just because winemakers have a strong desire to prove that they are experimental, but also because Chile is the ultimate playground for the curious viticulturist, being home to deserts and ice fields, cool coastlines and snow-capped mountains – along with more than 500 active volcanoes (an important point for those who believe that newly fashionable volcanic wines can only be sourced from Italy, Greece or Tenerife). In short, this nation is a hotbed of innovation, which is a much-needed element in any drive to premiumise.
The other approach being increasingly used to entice consumers upmarket, as well as protect Chile’s viticultural heritage, is a greater emphasis on its wine regions. This is something that may not seem new, but it has taken on greater importance as the country’s biggest brand has decided to push Chilean regional diversity. As db has previously reported, Casillero del Diablo is adding a new mid-range tier to its range that clearly states the source area. Dubbed the ‘red label’, the new product fits between the brand’s entry-level ‘white label’ and more premium ‘black-label’, and comprises a Sauvignon Blanc from Casablanca and a Cabernet Sauvignon from Cauquenes. Not only do both new wines feature the region of origin, but they are being promoted online using a short video that highlights their shared soils: both wines use grapes grown on clay, and hence the choice of a dark red colour for the new label – which is officially called Reserva Especial. With a recommended retail price of £8-£10, the new line represents an accessibly priced – if not entry-level – set of wines that promote Chilean terroir.

Underrated area

Not only that, but the Cabernet is drawing attention to a part of Chile that is little-known: Cauquenes, which Marcelo Papa, technical director for Casillero’s brand owner, Concha y Toro, believes is underrated, particularly for Cabernet.
Far more famous for this grape, and for reds from Chile in general, is the Maipo Valley. And here too, Concha y Toro is keen to add value by drawing attention to not just this region, but also its sub-regions. Using its Marques de Casa Concha brand, the company has launched a ‘black label’ – priced at around £15 – that promotes ‘Puente Alto’, an area in the Alto Maipo that’s the source of many of Chile’s best Cabernet Sauvignons.
“We are launching Marques de Casa Concha ‘Puente Alto’ that has no mention of the grapes, because the idea is to push Puente Alto,” Papa tells db, explaining that the wine carries the varietal mix on the back label.
“We are going down the Bordeaux path,” he adds, referring to the French region’s focus on Cabernet blends sold according to source area. “If Chile doesn’t work on promoting its appellations then we will be in trouble in the future,” he says, justifying his approach. And, similar to the surprising decision to promote Cauquenes with Casillero del Diablo, it initially seems unusual that Marques de Casa Concha should highlight the small area of Puente Alto, and not the larger region of Alto Maipo, which incorporates this small, high-quality appellation, along with others, such as Pirque (the home of Cabernet-based wine ‘icon’ Don Melchor); Alto Jahuel (the source of another Cabernet ‘icon’, Casa Real), and Huelquén (the site of the Perez Cruz winery).
Explaining the reason for this, Papa says that it’s because there is no official agreement on the boundary of Alto Maipo – which he said should, in truth, be referred to as Maipo Andes – in line with the country’s decision to give each region a suffix according to whether the vineyards are near the Pacific (Costa) or the mountains (Andes).
As a result, he has decided “to push the tiny appellations rather than the bigger one”, noting that Concha y Toro wines using grapes from Pirque would carry the name of this area on their labels, rather than the larger Alto Maipo.
“Twenty years ago there was an idea to create Alto Maipo as an official appellation but we never agreed it,” he says. “And Alto Maipo should change to Maipo Andes, but it’s not being used,” he adds.
Three of Chile’s top Cabernet blends hail from Puente Alto – Almaviva, Don Melchor and Viñedo Chadwick. Although Almaviva and Don Melchor carry the appellation on the front of their bottles, Viñedo Chadwick doesn’t, but simply states ‘Valle de Maipo’ on its back label.
Outspoken on the topic of sub-regional branding in Chile, especially for this part of the Maipo, which is the source of Chile’s most expensive and most revered red wines, is Andres Lavados, CEO at Santa Rita Estates, owner of the Casa Real wine brand and estate, which uses old-vine Cabernet Sauvignon from Alto Jahuel in Alto Maipo. “We currently put Maipo on the label, but we are looking to add value to our operation and we are thinking of adding Alto Jahuel – it’s not an official GI [geographic indicator], but neither is Alto Maipo,” he says.
“The GIs in Chile are too big, and Alto Maipo probably covers 600 hectares, which would make it too big to be unique, so we are trying to raise the awareness of the area, which we can state on the label even if it’s not official.” Such level of detail is, admits Lavados, primarily for the professional and fine-wine lover. “We want to give wine connoisseurs more knowledge; we want them to understand why Puente Alto is different from Alto Jahuel.”
Santa Rita is embarking a major replanting project at its Alto Jahuel estate to ensure that the producer can maximise the quality potential from this particular terroir in the foothills of the Andes, and, as part of this, is studying in detail the differences within the property, as well as what makes the site special. “With our new plantings we are working on subdividing the area, and we have to do the research to avoid becoming a commodity,” he says. He also tells db that he’s keen for “all the players” in this prized part of the Maipo to unite to define an area of high-quality wine production. This, he explains, would comprise a strip of land above 550 metres that spans approximately 60km from Pirque to the River Cachapoal.

Rules on quality

Such ambition highlights the desire to delimit regions in Chile according to terroir, rather than political boundaries, which are, for the most part, how the country’s wine territories are currently defined. Making rules to promote quality in particular areas is, however, not being discussed, even though one movement in the country has proved successful by doing exactly that.
Called Vigno, it started life in late 2011 as an association of 12 Maule producers of old-vine Carignan, and today, it is, in effect, the country’s first proper appellation, as the Vigno name can’t be used unless producers conform to strict criteria – they must use at least 65% Carignan grown without irrigation on bush vines over 30 years old in Maule. There are laws on winemaking too, such as a minimum two-year ageing period.
Rules aside, it is regional-based wine marketing that is the new trend among Chilean wine producers. As a further example, Cono Sur, another brand owned by Concha y Toro, although run as an independent operation, is relaunching its Reserva Especial. This line, priced at £10 in UK retailers, will later this year be called the Valley Collection, because CEO of the winery, Adolfo Hurtado, like Marcelo Papa, says that Chile must promote its varied viticultural areas.
“We are making the change because we need to start talking about regionality; the different valleys of Chile,” he says.
“Many people think that Chile is just one country from north to south, but if you look at it from a viticultural perspective, it is really many different countries, there are enormous differences between Syrah from Limarí in the far north of Chile to Riesling from Bío Bío in the far south.”
He also says that talking about site specifics is crucial in highlighting how one nation can create distinctive wines from such a range of grapes. “We need
to explain why we can produce really nice Sauvignon Blanc and Syrah. With the Valley Collection we are opening the door to talk about Chilean wine in a different way.”

Long-term health

So, Chile’s big brands are now using their might to emphasise the country’s regions and sub-regions in a bid to ensure the long-term health of this nation’s wine business. And in doing so, the country’s major players are having to look more closely at what makes each appellation distinct. This may mean new boundaries for existing regions, or, more likely, new viticultural areas within the current territories. Whatever happens on the ground, Chile’s generic and branded marketing is now firmly focused on the nation’s diverse range of source areas, and the premium wines they can produce. It may be an ancient promotional technique to insure against imitators, but it’s new to Chile.

A brief history of Chile’s wine regions

1970-1989: Chile was one single macro appellation called the Central Valley, comprising the central depression of the country between the Andes to the east and coastal range to the west.

1990-1999: Large sub-appellations were created within the Central Valley, including from north to south: Aconcagua Valley, Casablanca Valley, Maipo Valley, Cachapoal Valley, Colchagua Valley, Curicio Valley, Maule Valley and Itata Valley. Among these, Casablanca started to earn a reputation as Chile’s first cool-climate region.

2000-2009: Chilean wine producers began to push the boundaries, with high-altitude vines planted in the Elqui Valley in the far north of the country, while Chardonnay found a new home in the calcium carbonate soils of Limarí, and winemakers began exploring the extreme coastal influence in San Antonio, as well as Leyda’s granitic soils. Also, the Mapuche land was explored for vineyard cultivation south of Bío Bío River, and the first vineyards were planted in cool coastal Colchagua Valley, Paredones.

2010 to present: Development of extremes continues with, for example, plantation of vineyards at Huasco in Elqui at 6,562 ft, as well as along the coast in Aconcagua Costa and Zapallar regions. Significantly, the country introduces a new complementary designation that partitions Chile’s vine growing areas into three main types: Costa (coastal western vineyards), Entre Cordilleras (the central valleys) and Andes (eastern mountain vineyards).

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