The objective of becoming the New World leading producer of premium, sustainable and diverse wines, while reaching sales of bottled wines for $3bn per year, at an average price of $37.00 per case – as outlined in the ambitious Strategic Plan 2020 – already seems to be a pipe-dream. Although the premium wine sector has performed at its best in recent years, the growth rate is not enough. Chile needs to step up and, above all, “loosen up” when it comes to selling itself. It needs to introduce a touch of craziness. To show its more relaxed, carefree side. To let go of excessive formality to project a more dynamic, innovative image.
No one is more conscious of this than winemaker Aurelio Montes, vice chairman and head of international marketing at Wines of Chile. “For this new role in Wines of Chile, I had to loosen up a bit. My wife even bought me some red trousers,” he joked.
Safe but boring
This change extends not only to the clothing of its executives, but also to a transformation in terms of attitude. The way in which the wine-making industry comes across to the world – more than a decade ago, British critic Tim Atkin MW described Chile as being like a Volvo, as in, safe but boring – needed to be improved upon. Nowadays the portfolio is much more diverse and exciting, like a 4X4 Jeep which loses itself in the winding tracks of a high mountain or the gentle coastal roads, discovering new valleys and vines. The increase in wines from cool climates, along with recovering the heritage of interior, unirrigated old vines, and new plantations in Patagonia, have changed the approach of the wine business forever. The next step, which will perhaps be the most difficult one, is to change Chile’s image.
“Cabernet Sauvignon, Chardonnay and Sauvignon Blanc pay our wages. This truth is larger than a cathedral. These wines represent a great introductory pitch. We keep them at the forefront,” says Montes. “However, without a doubt, if we want to change consumers’ perception towards our wines, we have to show more innovation; show the fun side to sell what matters.”
For Mario Pablo Silva, CEO of Casa Silva, the image of Chile abroad is not so much negative, but more a blank canvas. This lack of a defined country image poses a great challenge ahead, but also an opportunity that cannot be missed. “Unlike the Argentinians, who are the kings of marketing, we are more grey, colder, more serious,” he says. “However, the image we projected was not all negative, as it helped us to establish the basis of a serious country.”
Andrés Lavados, CEO of Santa Rita, goes further still and states that the Chile brand is very neglected. “Historically we have committed the error of only selling wines. Now we have to be capable of selling stories,” he says, adding that while Carmenère, for example, has an interesting history, Chile has been incapable of communicating that. “Finally we understand that the world of wine is related to entertainment. We can sell good stories, we can sell emotions, whilst continuing to be a serious and reliable country when it comes to doing business.”
Claudio Cilveti, CEO of Wines of Chile, admits that many mistakes have been made and that the perception of the country-brand is very bland. He explains that in recent years the positioning has been approached from the point of view of management and not emotion. “Let’s be honest: we are a little bit dull. In a dance competition we would come last,” he says, smiling. “We have concentrated on working hard, but we have not managed to convey who we are to consumers. We only grow today because we have a tremendous product, but what would we be like if, in addition to good suppliers, we were more sexy?”
Shaking things up
Wines of Chile contracted consultancy firm Ipsos to conduct a positioning study for the US market, which opened with the following question: How can we best leverage the equity of Chile to influence consumer choice of wine and put Chilean wines on the map? The results of this work have recently been made available to Chilean winemakers and provide valuable insights in determining where Chile is blocked in the international arena and in which niches it feels more comfortable and can benefit from growth opportunities.
Firstly the study established where Chilean wines are positioned in the hearts of Americans (‘Attitudinal Equity of Brands’). The results were not particularly surprising. Chile is positioned seventh, with 4.9% selecting it as their first choice, behind the US (38.0%), Italy (14.3%), France (12.3%), Australia (7.7%), Spain (5.9%) and Germany (5.5%). Although these results are not entirely positive, they do establish certain important attributes associated with the Chile brand: Wines with a good quality/price ratio; with a zesty and unusual character; an adventurous personality that’s exotic and unconventional; with emotional benefits linked to new experiences and horizons; and a country-image associated with mountains, exotic food and, ironically, with carnival.
However, the most important fact to come out of the study was the identification of four country clusters and consumers’ reasons for choosing their wines: New experiences, adventurous spirit, unusual flavours and good quality/price ratio, for which Chile, Argentina and South Africa are well positioned, and to a lesser extent New Zealand, Germany and Spain; sophistication, tradition, luxury and history, where the unmovable France and Italy are found; celebration, free spirit and relaxation, where Australia has the monopoly; and lastly, everyday life, closeness and good value, where the US, the locals, are comfortably positioned.
Cilveti explains that is it impossible to compete in the luxury category, which is where France and Italy are found. Neither is it worthwhile competing with the party attitude of Australia, “as this is not part of our individuality. In addition, it represents a very small niche”. But nor is the answer to stand still. “We are not going to try to compete where others are already fighting tooth and nail,” he says, explaining that the best way to grow is to take the cluster of closeness and daily routine – those moments which add value to the small, intimate moments of everyday life, such as when people eat together with their families. “This cluster represents a very interesting area, which is frankly unexploited in terms of marketing. Here is where we want to grow. Here we not only want to position ourselves, but to become the leader,” says Cilveti.
In line with the spirit of the brand – “Experience wine in an honest, genuine way, where wine functions as an authentic and sincere proposition to enhance everyday life” – Chile begins a new era in terms of its marketing strategy. But first it is faced with the difficult task of aligning the marketing departments of the wineries while getting as far as possible with the modest budget allocated for the activity. For the awareness campaign in the US, for example, the budget will be between $800,000.00 and $1.5m. “Unfortunately when it comes to putting our hands in our pocket, the programs get cut,” Cilveti says with humour and resignation.
This new approach, despite being met by a certain amount of resistance by the more conservative members, has begun to change the outlook a little, and created a less inward and restricted atmosphere. The new setups for the wine tastings – round tables instead of bars which resemble desolate islets – and themed tastings, have been, without a doubt, initiatives in the right direction, which portray a more diverse and inclusive industry.
According to Marcelo Retamal, wine producer of De Martino and special guest on the marketing committee – which also includes Isabel Guilisasti (Concha y Toro), Eduardo Chadwick (Errázuriz), Agustín Huneeus (Veramonte) and Aurelio Montes (Montes) – a different Chile must be shown, which will include making invitations to journalists more transparent, so they can pursue their own programs without pressure or interference.
“Currently, the strategy includes movements that do not form part of Wines of Chile, such as MOVI (Movement of Independent Vintners) and VIGNO (Vignadores de Carignan). We all have to be aligned behind the objectives. We all have to row in the same direction,” says Retamal. “We cannot just show the liquid. The journalists and opinion leaders come to see people. And behind these people are the wines. It is complicated.” He says many of the wineries need to understand why journalists want to see Montes or Chadwick first. And that they need to understand that people may not be aware of them because despite the fact that they have good wine, they haven’t created compelling marketing.
This more adventurous, more uninhibited attitude, has already been seen in the US through the recent ‘Wine Bar War’ competition, which took four groups of distinguished sommeliers and challenged them to build a wine bar with Chilean wines. A type of reality show, the challenge involved not only talent and knowledge, but a lot of enthusiasm and decorative skills. “I think that my perception of how Wines of Chile is approaching the market is changing. A program like this shows me that Wines of Chile is looking to create positive associations between Chilean wine as a category and consumers, rather than just educating or marketing in a traditional sense,” said sommelier Morgan Harris.
Even more marketing activities for 2014 will be in full flow in November, when the Magical Mystery Tour sets sail. On this voyage, captained by Aurelio Montes and Marcelo Retamal, 20 wine correspondents from the United States and Canada will sail around Patagonia on board the Australis. Over four days, which will be shared with the Chilean winemakers, a series of themed tastings will take place, which will include Cabernet Sauvignon, cool-climate Pinot Noir, Mediterranean reds and whites, all of which represent Chile’s new and innovative wine scene.
“Only winemakers will be on board. The export managers and salespeople will stay behind,” says Retamal, saying that while the project wasn’t easy to put together, it’s the right move. “We want to create personal relationships, for communication to be more natural without there being a hint of sales effort behind this.” Still, he says, this won’t be a problem, because while Chilean winemakers may not be the best salespeople in the world, they are certainly entertaining. “We are not going to act like hippies, because we are not. Neither are we the kings of techno parties. But we do like outdoor activities, sustainable tourism, such as going on excursions or sports fishing in Patagonia,” says Mario Pablo Silva. “We have to find our own way of showing who we are. We will not entertain by dancing like Brazilians, but rather with a good roast and conversation.”
Andrés Lavados adds, “We have to accept: we did not invent fun, but we are much cooler than we give ourselves credit for.”