Chile at the Crossroads

Chile at the Crossroads

Glory days, well they’ll pass you by;
Glory days, in the wink of a young girl’s eye;
Glory days, glory days.

In the mid ’80s Bruce Springsteen belted out these words in the song “Glory Days,” a reflection on better times that would never return. And while The Boss was referring to growing up in his native New Jersey, the lyrics are an apt metaphor for what’s been happening in recent years with Chilean wine sales in the United States, only with the wine-drinking public playing the role of the fickle young girl.

After a decade and a half of buying much of what Chilean wineries had to offer, and thereby thrusting Chile into the top five of global wine-exporting nations, American consumers are balking at purchasing Chilean wine. Over the past two years, the volume of Chilean wine exported to the U.S. has fallen by about 10%, according to figures supplied by Wines of Chile. In terms of value, Chile’s exports to the U.S. are down by a less-bitter 7%.

Whether it’s the fault of the economy, an overly powerful Chilean peso that has made the country’s wines more costly, increased consumer indifference to Chilean wines as a whole, or simply wine drinkers moving on to the next hot commodity (Argentine Malbec, Provençal rosé, Moscato), Chile is going through tough times in one of its key export markets (the U.K. is also foundering).

The silver lining for Chilean vintners, and it’s not an insignificant one, is that emerging wine markets like China, Japan and Brazil are picking up a good chunk of the slack, with export volume increasing by about 12% in Brazil since 2010 and by a whopping 60% in China, where sales of Chilean wine should top two million cases this year.

In light of this new reality, the Chilean government and the Wines of Chile trade organization earlier this year invited me to come to Chile and give a lecture to the industry on what wines are having success in the U.S. and what Chile can do to recapture its halcyon days, which I would define as the late 1990s up to the current recessionary period that began in 2008.

I told my audience that while the glory days are most likely gone, largely because nothing can be discovered more than once, there are a few things they should do to maintain Chile’s current standing in the U.S.:

Focus on what the country does best: Americans love Cabernet Sauvignon (it’s the most popular red wine in this country), and Cab is Chile’s best and most consistent red wine. Yet Chile seems obsessed with pushing Carmenère, with its herbaceous aromas and flavors, as a signature red. I’d be shocked if Carmenère were ever to win over the American palate, so stick to Cabernet Sauvignon and market it as Chile’s pride and joy.

Promote Chilean wine via Chilean cuisine: Chile boasts some of the best seafood in the world, but other than the wrongly named Chilean sea bass, what does the public know about Chilean seafood and how it pairs with the country’s snappy Sauvignon Blancs? Argentina has its beef, Spain has its tapas, Italy has its pasta. Chile has the Pacific Ocean and everything that lives in it.

Define who Chileans are and what Chile is: Chile has roughly 17 million people, some very well accomplished, but it doesn’t have a strong identity in the wine world, or so I’m told by sommeliers and other so-called tastemakers. Might Chile benefit from a top-notch global marketing and ad campaign that incorporates famous living Chileans (sorry, Pablo Neruda)? Prime candidates include the author Isabel Allende, the actress Leonor Varela (Dallas) and the budding international soccer star Alexis Sánchez. And because few places in the world are as visually striking as Patagonia, the Andes and the country’s Lake District, press these images into the eyes and minds of the consumer. That way Chile’s wine marketers would have more to hang their hats on besides Carmenère and wines that aren’t as cheap as they once were.

Published on October 10, 2012
Topics: Chilean WineWine Trends