Concha y Toro offsets US decline with premium wines and beer growth

Viña Concha y Toro has reported a 2.3% rise in consolidated revenue to US$499.18 million for the first half of 2025, underpinned by premium wine brands and beer sales, despite global wine consumption falling to its lowest level since 1961.

For the second quarter alone, sales increased 3.2% year-on-year to $269.28 million, marking the company’s seventh consecutive quarter of value growth. Premium and higher-end products accounted for 54.3% of sales in Q2, up 1.9 percentage points from a year earlier. Flagship Don Melchor saw sales jump 208%, Diablo rose 14.2%, and Trivento Reserve, produced by the group’s Argentine subsidiary, grew 2.7%.

The company said its focus on premiumisation has helped it weather a challenging wine market in which lower-priced varietal and “inferior” categories are experiencing sustained decline.

Beer and spirits strengthen domestic market

The Chilean domestic market grew 4.5% by value despite a 1.4% fall in wine volumes. This was offset by a 16.2% increase in beer and spirits revenue, driven by the company’s own beer brands and double-digit growth in its Mal Paso and Diablo pisco labels.

This builds on Concha y Toro’s strategic investment in its beer portfolio, including its increased stake in Chile’s premium craft brewer Cervecería Kross last year, which was a key contributor to Q4 2024 growth as previously reported by the drinks business in January.

Mixed regional performance

Export markets grew by 6.8% in value, supported by a 4.0% rise in volumes and a stronger product mix.

Brazil (+10.5%), Chile (+4.5%) and the UK (+1.8%) performed strongly, while Asia fell 8.2% due to lower sales in Japan, although China and South Korea returned to growth at +4.2% and +0.2% respectively.

In contrast, US sales declined 8.8% as Bonterra Organic Estates (formerly Fetzer Vineyards) faced inventory adjustments and intense price competition in lower-value categories. Despite this, average US pricing rose 6% per 9-litre case, reflecting the group’s premiumisation strategy.

Margin pressure and lower profit

Operating profit fell 15.3% to $31.02 million in Q2 as higher input costs and pricing pressures in entry-level segments eroded margins. Operating margin slipped 250 basis points to 11.5%.

For the half-year, net profit fell 4.9% to $36.08 million, with net margin down 60 basis points to 7.2%.

By comparison, Concha y Toro closed 2024 with a 14.5% increase in annual sales value, reaching $1.05 billion, and forecast 3-8% volume growth for 2025.

CEO outlook: “well prepared for growth”

Chief executive Eduardo Guilisasti said the company’s performance highlighted its ability to adapt: “Despite the global slowdown in wine consumption and a highly competitive environment, our focus on premium brands and efficiency has enabled us to gain market share, particularly in Chilean exports, which rose from 35.8% to 37.5% by volume as of May.”

He pointed to new launches, including alcohol-free Casillero del Diablo Zero and lighter BeLight wines, as examples of innovation aligning with shifting consumer trends toward low- and no-alcohol products, which now account for 6% of US and 1.6% of UK wine volumes.

The company also highlighted strong visitor interest at its renovated Wine Centre in Pirque, signalling optimism for the second half of the year.

Global context remains challenging

According to the International Organisation of Vine and Wine, global wine consumption in 2024 fell to its lowest level since 1961, driven by structural declines in traditional markets and a consumer shift toward lighter, fresher styles and alternative categories such as beer and low-alcohol drinks.

As the drinks business reported in March, Concha y Toro’s strategy of premiumisation and diversification beyond wine, particularly into beer, positions it for resilience in a market undergoing “the deepest and most structural crisis in the wine industry’s history”.

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