Chilean wine producers head south

A cooler climate is drawing innovative producers to the south of Chile, reports Marcela Burgos.

Aurelio Montes, Viña Montes
Aurelio Montes, Viña Montes

It’s a 15-hour non-stop drive from Santiago to Chiloé, which gives an idea of how remote Chilean viticulture has dared to become. Vineyards in Chile, like those in other countries, were historically established close to centres of population, and the rivers crossing from the Andes to the Pacific traditionally defined the limits to which most wine valleys expanded.. 

Although moving north to areas with calcareous soils or high altitude has resulted in exciting wines, production is limited by water shortages; the Atacama Desert, at the northern limit, has only 15mm of average annual rainfall. The south, on the other hand, has been the choice for many innovative producers searching for a new style of cool-climate wines.

A cool experiment

In 2010, the Instituto de Investigaciones Agropecuarias (INIA), the research and development office of the Ministry of Agriculture, planted the world’s southernmost vineyard near the town of Chile Chico in Patagonia. The aim of this controversial project was to validate which grape varieties would survive in such a climate. Here at the latitude of 46º32 South, General Carrera Lake – South America’s second largest – acts as a climate moderator, just as other lakes do in marginal wine regions around the world. Plantings of Sauvignon Blanc, Chardonnay and Pinot Noir have matured and new sectors of the lake are now being tested in the second stage of the project.

Chileans never tire of making comparisons, and neighbouring Argentina’s most southerly viticulture project – the Parque Bustamante project in Chubut by the Atlantic Ocean – is only 42º35 South. Aurelio Montes, the technical director at Viña Montes and a producer in Mendoza, explains: “Most of Argentinean Patagonia is hot and dry and there is no water availability, plus sandy soils are never that interesting.”

Viña Montes, long known for its innovative philosophy, has found its own “sweet spot” on the southern Isla Grande de Chiloé (better known locally for potatoes than grape vines). It planted seven varieties as part of a pilot project on one of the many small islands of the eastern archipelago, in the center of the Golfo de Ancud, where vines are well sheltered from the cooling influence of the Humboldt Current.
Experimentation and terroir-driven wines seem to be the common motivators for producers with projects in the south. Most of them started with experimental plots of land, and after some grape variety adjustments and replanting, have decided to establish vineyards of a small and manageable size.

Rodrigo Romero, winemaker and co-owner of the Trapi del Bueno project in La Unión, near Osorno, believes that southern Chile is “the democratisation of cool climate” since there are still places where investors can find land for a quarter of the price, or less, of vineyards in central areas where water is more readily available.

“Climate change is certainly opening windows of opportunity in the south of Chile, as temperatures increase and rain decreases,” says Fernando Almeda, the renowned Spanish consultant based in Chile. “The key to success is site selection because transition zones are small.” By way of example, he explains that while Puerto Aysén is only 50km from Coyhaique, the gateway city to Patagonia, the annual rainfall there is 2,500mm, while Coyhaique itself has just 800mm.

In terms of temperatures, the climate in these southern areas lies somewhere between that of Burgundy and the southern part of Champagne, with long days during the growing season and summer temperatures staying below 30oC, thereby protecting the aromas and natural freshness of the grapes. “This is a new cool climate for Chile, with lower temperatures but without the cloudy days experienced on the coast,” explains Almeda. “It therefore has plenty of sunlight, which develops more elegant fruit expression.”

The soils of southern Chile are varied but most of the projects are planted in soils of volcanic origin with high basalt content and a sandy texture. These new terroirs are a long-awaited contrast to the more alluvial soils of the central area of the country.

But in these extreme climate conditions, rootstocks of low vigour and with a short ripening cycle are essential to reduce frost risk, as are less botrytis-sensitive grape varieties. Varieties must be able to adapt to a cold climate and reflect their origin. So there are Pinot Noir, Riesling, Sauvignon Blanc and Chardonnay wines in a fresh fruit, high acid style. 

However, alcohol levels are below 12%, which is uncommon in the rest of Chile. Christian Sotomayor, founder of Ribera Pellín, explains how the winery had to shift its focus from still to sparkling wines once it realised that the resulting Brix meant its products could barely be named “wine” under Chilean law.

The commercial potential

“The costs here are insane,” says Marco De Martino, commercial manager at De Martino Wines. He and his brother have developed an independent project in the foothills of Volcán Villarrica, where they estimate they have spent more than $20,000 per hectare, more than two-and-half times that spent on their Maipo domain. “As we knew that the return on investment would take several years, we had to conceive this dream as part of a macro real estate project to finance the operation,” he says, explaining that they are planning to sell some land for second homes, to take advantage of the region’s tourism potential.

As expected, frost and low fertility are a risk every year in most southern areas. In La Unión, Romero is very proud of his 10,000 cubic metre tank for frost control. “We needed to make this investment to ensure sustainable grape production every year,” he said. It cost $75,000 but doubled his yield to 10 tonnes per hectare. 

Technically, the high humidity necessitates more sulphur applications and a higher spend on phytosanitary techniques. And for those producers who have set themselves the goal of working without irrigation or fertilisers, the trade-off is a slow-developing project. 

Many producers have issues building up teams in the vineyards due to the region’s low population density, with a consequent lack of specialisation and high rotation. The available staff often have no experience in viticulture because they come from cattle raising and dairy farms and although manual harvest – mandatory given planting on slopes – can be managed successfully if direction is provided, performing the annual vineyard tasks can be slow and inefficient.

In the domestic market, lower-alcohol wines are hard to sell. However, on the export markets, these wines have the potential to compete in quality and style with New Zealand’s Pinots, and maybe even with Burgundy. Still, the reality is that Chilean wines mainly command low prices – an average £7.99 ($10.35) on the UK market – while producers need to sell these extreme wines at high prices to make them commercially viable. In many cases, these projects are funded by the rest of the producer’s portfolio, or even from other industries. Trapi del Bueno, for instance, currently sells half its grapes to Miguel Torres Chile to produce its Cordillera Sauvignon Blanc from Patagonia.

Marketing efforts are therefore crucial, as a good story can achieve the necessary engagement with distributors and final consumers in order to reach a higher price point. “Our clients are fascinated by our story of innovation… and the fact that they get a sunny day when they visit the island also helps,” says Aurelio Montes.

Despite improving connectivity to southern Chile, with such high costs and small volumes, it is still yet to be seen whether these exciting cool-climate wines will contribute to the bottom line of the Chilean producers or if they will remain a bold experiment.  

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