Chilean wine comes out of the cold in the US market

Chilean wines have been stuck with a low-cost image in the US market and sales have struggled in the past decade. But as consumers look for value, Chile’s star is rising.
 

Photo by Loïc Mermilliod on Unsplash
Photo by Loïc Mermilliod on Unsplash

After a decade of disappointment, Chilean wine sales are rebounding in the USA. That’s the good news that Chilean exporters are celebrating ahead of their national Independence Day on September 18.

“With our broad rand of wines spanning all price points, we are confident that Chilean wines are on the right track in the US marketplace,” said Julio Alonso, the New York-based executive director of Wines of Chile USA.

Chile is the seventh largest source of wine imports in the USA, and the only country in that top seven to experience growth in the first quarter of 2020; sales to 30 June 2020 represented an uptick of 40.7% in volume and 36.5% in value, to a total of $18.88m.

However, Chile still has some way to go. The growth in sales was mostly enjoyed by Chile’s big brands, according to a statement from Wines of Chile, with the biggest growth in the $11-$15 category.

Over the past decade, Chilean wines have struggled somewhat in the US market. As the Silicon Valley Bank report of 2019 noted, Chilean exporters “recognize that their reputation as low-quality producers hasn’t helped their brand and are working at improving their image”. Chile has also been an active negotiator of Free Trade Agreements, particularly in southeast Asia, which has enabled their wines to perform strongly in increasingly lucrative markets such as China and South Korea.

According to Wines of Chile USA, Chilean wines have benefited during Covid-19 from Millennials. “While Millennials drink less wine than the previous generation, when they do, they are more adventurous and willing to try new varieties such as País” and Carignan, which are beginning to enter big box retail. Wines of Chile USA also suggest that Chilean wines are attractive to Millennials for environmental reasons. 

“Chile is a world leader in sustainability from the vineyard to the table and Wines of Chile has been instrumental in setting standards in this area,” said Alonso.

Red wines drive sales, led by red blends and Cabernet Sauvignon, with rosé, Bag-in-Box formats and Mediterranean varieties also doing well. Bulk wine still accounts for roughly two-thirds of the export volume, but there are some encouraging signs, as bottle sales have risen 2% in volume and 13% in value.
 
 

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