In focus: Chile trends

As one of the world’s biggest exporters it’s easy to to forget that Chile has only a little more than 30 years’ exposure on the international wine market.

In that time, its wines have become a household staple, supported by the likes of Concha y Toro, which is now the fourth-biggest wine producer in the world. Chile’s rapid success has been thanks, in part, to its ability to cultivate any variety in a patchwork of diverse climates, as well as its near-perfect viticultural conditions. Free from excessive regulations, Chile has been able to cater to the needs of the mass market in a way in that other regions simply cannot match. This year, Vinexpo predicted that by 2021 Chile will have overtaken France, Spain, Italy and the US to become the second most imported wine in the UK after Australia. In that time, those countries, as well as Australia, are all expected to lose volume share in the UK of between 1.8% to 5.8%. Chile’s share, by contrast, is expected to grow by 2.4% (the equivalent of 1.5m cases). But Chile’s well-worn reputation as a source of big volume, reliable wines has come at a cost. Decades of supermarket discounts, private labels and, at times, unreasonably good value has left consumers unwilling to pay a higher price for its wines. Today, however, Chile is home to some of the most exciting New World wines on the planet.

Viña Errazuriz, led by its president Eduardo Chadwick, did a great deal to promote the fine wine reputation of Chile when he launched his now famous Berlin Tasting, which saw his Viñedo Chadwick and Seña wines win over critics and place higher than several first growths. These wines, along with those from Almaviva, owned by Concha y Toro and Baron Philippe de Rothschild, now trade on Bordeaux’s revered La Place platform. But such wines represent only a tiny proportion of Chilean wine.

Globally, the average free on board (FOB) price per case of Chilean bottled wine is US$27 (£21), placing it behind nearly all of the world’s other big volume producers including the US, France, Australia, Italy, Argentina, Portugal and Germany. Only South Africa and Spain have a lower average FOB, at US$22 and US$21 respectively. Wines priced at between US$50 and US$60 FOB, which works out at around £10 a bottle, represented just 2% of Chilean wine imports into the UK in 2017. Of those imports, 58% fell between US$20-US$30, 22% below US$20, and 15% within the US$30-US$50 mark. Changing Chile’s mindset from volume to value sales, and convincing consumers of the benefits to trading up, is now a priority for Wines of Chile and its members, but it won’t be an easy task.

Classic mentality

Putting the challenge into context, Rodrigo Soto, head winemaker at Veramonte, recalling a conversation with Barolo producer Elio Altare, told the drinks business: “Elio pointed out the hills that were part of the appellation and as far as you could go with plantings. I asked him, but what if you need more grapes? It’s a classic mentality for us; you have more demand, you need more grapes. He said you would need to buy the parcel next door, which probably isn’t for sale. I asked: ‘What do you do?’ He said: ‘I raise the price’. When you get an answer as simple and clear as that, I thought: ‘Wow, we are so far away from that.’”
This year Wines of Chile said it would no longer promote wines sold for less than US$60 FOB a case, seeking to drive up the visibility of its more premium wines. It means that at promotional and trade events worldwide, you will no longer see wines priced at less than the equivalent of £10 a bottle (or $15 in the US, and ¥150 in China). This, it believes, coupled with championing Chile’s sustainability credentials and growing oenotourism, will help it to achieve its aim of growing the country’s value and volume exports by 6% and 3% respectively each year. In 2017, the industry achieved a 6.4% and 5.8% uplift in the value and volume of exports, with the aim of lifting Chile out of the confines of the off-trade and into the independent and on-trade sector.

Increase reputation

As Christian Sotomayor, export director at Viña Valdivieso told db in Santiago in July: “Supermarkets are necessary, like lawyers, whether you like them or not. We should be very thankful to the off-trade worldwide. It was the start of Chile’s wine industry. It has been crucial, but we need to work to increase our reputation among buyers.”

A snag to this effort is Chile’s growing position in China, where it benefits from a free-trade agreement. “The problem we have is that some producers are still in the bulk wine business and start from a very low price,” says Jaime Valderama Larenas, a director on the board of Wines of Chile, and managing director of Miguel Torres Chile. “That works against the whole strategy as an industry. They are getting stronger in markets such as China because it is a growing market and there are a lot of private labels. There are still some wineries out there doing that, and that works against the aim of building the prestige and image of Chilean wines. Their strategy is to build volume so they have to work with lower prices.”

While volume-led markets will remain crucial to Chile’s success, today winemakers are breaking free from commercial constraints and are innovating in a number of new varieties, regions and styles. From its classic Cabernet Sauvignon heartland in Maipo and the wild south (covered in more detail on page 42), to its cool-climate coastal sites and extreme vineyards in the Atacama Desert to the north, winemakers are pushing the boundaries of Chilean viticulture to show the breadth of its terroir, reviving old vine varieties and innovating with small-batch wines. “There is a new wave of wineries, even the larger ones, that are taking risks and experimenting,” says Cristina Bilbao, regional director for Chile at Clos Apalta. “Maybe not in big quantities, but we are learning from our neighbours, and from other countries. We are much more aware that we can produce a high-quality brand instead of bulk. I would love to see a Chile that sells 80% brand and 20% bulk. Currently it’s the other way around.”

Changes to Chile’s vinous landscape have been swift. What began with The Movement of Independent Vintners (MOVI), and later the old vine Vigno project in Maule – the shared trademark, quasi-appellation that covers dry-farmed old vine Carignan from the Maule Valley – has turned into a national effort to diversify Chile’s offering and raise its reputation. “A revolution is happening everywhere,” says Julio Bouchon Lyon, executive director of Bouchon Family Wines. “It’s not just one region. Old vine Carignan and País in Maule and Itata have had a lot of attention, but there is also a revolution within big wineries. They now have small projects alongside more traditional wines, and are doing a lot of innovation. There is a lot of ambition among winemakers, who cannot be chained anymore. They don’t want to be tied to classic styles.”

This year, Clos Apalta released a dry Muscat from grapes grown in Itata, while innovation at Santa Rita Estates is also growing. This year, Carmen produced a small-batch flor-aged Semillon called Florillon, nurtured by winemaker Emily Faulconer. On finding a tank with a layer of flor on her first vintage at Carmen, she used it to inoculate a barrel of Semillon. In 2018, she made four barrels – 1,000 bottles – that will initially be sold at the cellar door. Santa Rita’s winemaker, Sebastian Labbé, meanwhile will this year release an unfiltered white field blend called Floresta, made from Sauvignon Vert, Semillon, Moscatel, Toritel and Corinto, picked at the same time from a vineyard in Apalta, as if it were a red wine, with 40 days’ skin contact before pressing and fermentation – the first orange wine for the wine giant. “Bigger companies are starting to experiment, and it’s important for Chile’s image,” says Labbé. “We are not doing these innovations for the sake of it – there is a need to push the limits. Big companies have a responsibility to show that Chile is more than good-quality reliable wines.”

NEW DOs

Signalling the strength of its ambitions, in May four new Denomination of Origins (DOs) were signed into law, marking a major step in the industry’s ability to communicate its multitude of microclimates beyond its politically fixed geographical boundaries. What made the addition of three of these DOs significant was that they were not part of a political municipality. Up until now, any DO had to be tied to one to come into being.

Now, a prospective DO must only be close to a locality of the same name and/or a vineyard of international acclaim, setting a new precedent. The three new DOs include Lo Abarca in the San Antonio Valley, and Apalta and Los Lingues, both in the Colchagua Valley. An application put forward for Quebrada Seca, a microclimate in the Limarí Valley, known for its production of Chardonnay, was not permitted to become a DO because it is not associated with a defined locality. Nevertheless, the relaxation of its rules signifies the Chilean authority’s recognition of individual, smaller regions, known by producers for their unique climactic characteristics, but previously ineligible for DO status. Federico Mekis, international legal advisor for Wines of Chile, said the ruling would help to “pave the way to get rid of the rigidity of the political division of the State, and recognises the specificity of the localities”.

A fourth area, Licantén, was also made a DO, in line with previous guidelines, because it was already recognised as a district of Curicó Valley. Producers will now be able to include these DOs on their labels, along with its respective Andes, Costa or Entre Cordilleras status, which indicates a vineyard’s proximity to either the coast or the Andes mountains. Los Lingues may use Andes, and Apalta may use Entre Cordilleras, while Lo Abarca and Licantén will be able to use Costa.

ORIGIN FOCUS

While this is a step in the right direction, there are winemakers who argue that Chile’s DO system, based on geographical and political boundaries, does not go far enough, and that with the country now reaching a stronger consensus on which varieties grow best in certain areas, stricter rules on winemaking, yields and grapes should be considered. This is a conversation that Chile must have, says Rodrigo Soto of Veramonte, despite knowing it to be a “sensitive and politically charged topic”. “If you want an appellation, a true appellation, it comes with very strict regulation,” he says. “Who wants that is debatable. We don’t want to lose flexibility. Flexibility has been very good for Chile in many ways, but it’s also going to be responsible for all of our problems. Regulation, the concept, is important. An agreement, a consensus – those kinds of elements. If we are in the same boat we need to row with the same rhythm. If not, it’s very difficult.”

He adds: “I have been a big advocate for subdividing Casablanca, but those resistant to the idea will say, ‘but what if I’m on the wrong side’? What’s the wrong side? We are just trying to be more specific. The wines will show differently. Someone might expect herbal notes and others a citrus character. We need to be true to our beliefs and our location.”

Andrés Gillmore, sales director at Emiliana, agrees believing that a stronger framework for the protection of quality in each DO would be in Chile’s best interests, pointing out that, currently, wines of all standards are permitted to use the same designation on its label, with no quality assurances. “For some producers it’s not in their interests, and it’s easy to let the other people do the hard work,” he says. “It’s mostly producers that have an interest in the low end that are against any rules. Whenever there is a new law or change there is resistance but we need to make the decision for the greater good. We are never going to keep everyone happy.

“The decision has to be taken as a country, not to protect individual interests. It’s still very early in the discussion, but it’s becoming stronger. The previous generation was more afraid of change. Now there is a new generation coming into the decision making and this change is likely to happen. Chile needs to present a strong image, and the only way to do that is to talk more about origin.”

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ROSE

Evolution is also taking place in wine styles. Having spent years relegated to the back end of producers’ portfolios, made as an afterthought rather than a wine in its own right, winemakers are now taking rosé seriously, with Provence-style examples at the centre of an emerging flush of new releases. This year, Chilean wine giant Concha y Toro launched two pale pinks; its revamped Casillero del Diablo Rose, now made with Cinsault sourced from Itata in southern Chile, instead of Shiraz; and a more premium expression under its Marques de Casa Concha label, also made with Cinsault, with technical director Marcelo Papa confirming that the group now has a “serious programme for rosé” in place.

“For many years rosé wasn’t in fashion, and today the Provence trend is in style,” says Papa, who began sourcing Cinsault from Itata in 2014. “We saw that it worked well for rosé, so every year we buy it,” he says. “We have an amazing source of 60-year-old bush vines. The vineyard is close to the ocean, it’s very sunny and we see a lot of influence from the riverbed soils. It’s easy to make a good rosé from Cinsault in those conditions. Cinsault produces this apricot-salmon colour, the alcohol is not high and it’s very drinkable. It’s a great story, the place is great and the people are fantastic.” Referring to famed Provence rosé Garrus, made by Château d’Esclans, Papa adds: “This is pure Cinsault, so it’s not in any way a copy, but it’s an inspiration.”

The high-end hotel and winery VIK, in Millahue in Cachapoal, in Chile’s Rapel Valley, is also catching onto rosé, with plans to launch a version made from Cabernet Sauvignon under its La Piu Belle brand from the 2018 vintage. Cono Sur is also exploring the possibility of producing a Provence-style rosé from Grenache and Carignan, which would join its Bicicleta Pinot Noir Rosé. Meanwhile, Clos Apalta has released a rosé from the 2017 vintage called Le Rosé, which is made from a blend of Cinsault, Mourvèdre, Grenache and Syrah.

“There is this new wave of more elegant and thoughtful rosés emerging,” says Bilbao of Clos Apalta. “Previously, winemakers didn’t manage the vineyards to produce a rosé. Now we have beautiful examples of sparkling and still wines made with rosé in mind, as opposed to it being a by-product. Lots of wineries didn’t want to make a serious rosé because they didn’t know if they could sell it. Now bigger companies are leading the way. If Concha y Toro makes a rosé, of course everyone else can. I cannot explain how happy that makes me, because it’s really important for Chile to move beyond the classics.”

SPARKLING

Sparkling wine is another area of growth. With the global sparkling wine market booming, Chilean winemakers are waking up to their potential for fizz, and are approaching the category with renewed vigour. Chile might account for just 0.5% of the world’s sparkling wine market, but its multitude of cool-climate sites are perfectly suited to producing grapes high in acid and low in sugar. Last year, the value of its sparkling wine exports increased by 14% to US$21.9m, while volumes remained flat, according to statistics provided by Wines of Chile, having risen from just $5.8m a decade earlier. “There is a big opportunity, but the industry is still behind on sparkling compared with still wines, especially in terms of regions and appellations,” notes Paul Konar, managing director of Cono Sur, which last year released its first traditional-method sparkler, Centinella, from Casablanca.

“There has been an effort to create a Chilean Spumante category, but I think we need to work as an industry to find a common product. At Cono Sur, sparkling is doing very well in some markets, especially the UK. The quality we can achieve is excellent, but the consumer doesn’t look to Chile for sparkling wines, and that’s something we have to work on as an industry.”

The majority of Chile’s sparkling wine is made in the Charmat method, but examples made from Chardonnay or Pinot Noir in the traditional method are on the rise. This year, Emiliana increased its focus on its Emiliana Organic Sparkling, made from Chardonnay and Pinot Noir grown in Limarí, switching its production from Charmat to traditional method.

“It was a bit more expensive but it was worth doing because the jump in quality was huge,” explains Gillmore. “Sparkling is a category that is booming worldwide. Prosecco opened up that market, and the category is really starting to grow in Chile. We have great weather to produce sparkling wines from Casablanca, Limarí, San Antonio, Bío Bío, and the varieties suited to making it. One market that’s dominating growth is Japan, which accounts for 70% of our sparkling exports, but all countries are growing, as well as the domestic market. Every winery is now releasing a sparkling wine. They have potential and are growing each year.”

While their share of the market remains tiny, a designated sparkling wine appellation or quality denomination could help producers better compete with the likes of Prosecco, Champagne or Franciacorta, says Miguel Torres Chile’s Valderrama Larenas. “That discussion started with people wanting to have a quality denomination, but this should include wines from certain cool valleys and areas that produce quality sparkling wine in the traditional method,” he says, alluding to previous efforts to create a Chilean Spumante category. “This ended up accepting wines made by Charmat outside of cool valleys. To those of us that were producing high-quality sparkling wines, it means nothing if everyone is part of it. You have to have some rules for it to mean anything.”

PERFECTING PAIS

While the old vine revival of Cinsault and Carignan is still alive and well, País is becoming increasingly visible in the portfolios of many producers. “Winemakers are realising that País is part of our heritage,” says Felipe Tosso, Viña Ventisquero’s chief winemaker. “It started off as an interest in the País grape rather than as a commercial wine. Then you go there and meet the growers and realise that they are survivor vineyards.”

País was one of the first varieties to be planted in Chile, with the arrival of Spanish colonists in the 16th century, and has been grown since by a large number of small farmers, particularly in the south, to produce village-style ‘rustic’ wines made in plastic vats. Forgotten by the mainstream industry, it was only recently that winemakers turned their attention to this truly Chilean variety, choosing to make serious wines from vines that were over 100 years old, and reviving the livelihoods of producers in the region.

“It’s really important to bring these old vines back into the viticultural map, but we have to go there and focus and make great wines,” adds Faulconer. “It’s not enough to say it’s an old vine, it has to be a really great wine, and there are great examples.” Now producers are restoring old bush vines in Maule and the southern regions of Bío Bío and Itata to produce different interpretations of País, including Beaujolais-style reds, rosé and sparkling wine.

Bouchon, for example, produces wild-ferment País in red and white iterations called Salvaje, made in amphorae from vines found growing wild in a forest adjacent to its vineyard in Maule. “These vines are wild; they were not planted by humans,” explains Julio. “They grow by themselves, never pruned or touched. Five to 10 years ago I would never have imagined making a wine like this. It’s a style that was once difficult to promote. The tannic structure coming from granite was sharp and edgy, and consumers preferred more rounded, juicy tannins, but now people are looking for this style of wine, with a lower pH and more freshness.”

UNIQUE TO CHILE

Morande makes a País/Malbec blend called Aterciopelado, which means ‘velvety’, from 80-year-old vines in Maule fermented and aged in concrete eggs in an effort to create a wine that is “less tannic and more sophisticated”, says winemaker Ricardo Baettig. “It’s a way to try to make País more modern,” he says. “I truly believe that Chile needs a grape like País to have something to show to the world that is unique to us. No one else makes it on the scale we do. We have a lot of País and very old vines, but we are still learning. There’s a difference between País grown in the lowlands and País from the hills, which is less rustic and more concentrated.”

Chile still faces many challenges, but it has the talent, terroir and tenacity to reframe its reputation. Shedding their tendency towards conservatism, winemakers are shaking up the country’s image and are taking more risks. What Chile needs now is for more buyers and members of the trade to do the same.