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  Why the Climate is Ripe for Chilean Wine Brands   Why the Climate is Ripe for Chilean Wine Brands  Joe Ray  
         
 
Why the Climate is Ripe for Chilean Wine Brands Winemaker Jon Usabiaga joined the Aresti winery at the perfect time—when it was ready to switch from the centuries-old Chilean tradition of making cheap tipple sold by the kilo to a beverage worthy of a family name.

"I didn't like Aresti wines before and I thought I could make something good here," he says.

Making "something good" has taken some convincing here at Aresti and in Chile as a whole. Usabiaga walks through a labyrinth of industrial concrete wine vats set up for bulk production, to the winery's bleak-looking tasting room. Normally, this type of setup indicates an operation that focuses more on quantity than quality.

However, the wines are pleasingly fine and the winery turns out to be a sign of a new understanding in the Chilean wine industry—one that's learning the importance of how to brand both at home and in the world market.

Typically, Chilean wines are a safe bet for the consumer and the producer: solid stuff that’s a good value for the money. This is blessed climate for growing grapes with thousands of miles of Andean hillside, Chilean coastline and valleys with beautiful, dependable weather that even helps take the guesswork out of when to harvest. Riding the new world wine wave, production has nearly doubled in the last ten years and seems to have plateaued at 8 million hectoliters in both 2006 and 2007.

The downfall, however, particularly on the export market, is that there's low brand name recognition, little history of high-end production and not much that sets these Chilean wines apart from globalized wines made in other countries. A Chilean winemaker once described the wines here as the Volvos of the wine world—a safe bet, but nothing very exciting.

 
That said, the overwhelming feeling here is that pushing for quality is what will start turning heads and building the wine's reputation on the world stage and at home. Many in the industry are ready to prove that there is more to the country’s offerings.

"I wasn't motivated to stay and keep making the same thing," says Aresti export manager Vincente Aresti, who grew up working summers at his grandfather's winery, which made only bulk wine until 1999. "It changes a lot to put your name on the bottle."

"I had everything," Aresti says of a life he had created for himself in San Diego, but in 2002 a call from his grandfather who wanted to make better wines changed everything, "I broke up with the girlfriend, I broke my lease, I sold my car and left."

With Usabiaga, Aresti persuaded his grandfather that making better wines meant producing less, and coddling their grapes more. The winery went from making 35 tons per hectare to less than 12. "It was hard to convince him to change," says Aresti of his grandfather, who came from the typical Chilean winemaker's "more is better" mindset.

"We used to use concrete vats from 40,000 to 400,000 liters. It's stupid," says Usabiaga, summarily spitting out the bulk wine business he walked into.

"It's much easier to sell them now," says Aresti.

The leadership that Aresti and other aspiring Chilean winemakers are now following tends to come from top-end producers. These vineyards are often run by foreigners or rely heavily on experts who learned the trade in countries with a longstanding, high-quality wine production, like France and Italy.

Though purists might balk at the homogenization outsiders might bring in, this foreign influence is a major part of the driving force that pushes the perception away from the Volvo stereotype and also has the cash and branding wherewithal to make it happen.

Leading the charge for both quality and brand awareness is the Colchagua Valley’s Casa Lapostolle. The winery is a collection of foreign viticultural all-stars that includes Alexandra Marnier Lapostolle de Bournet of Grand Marnier liquor fame, controversial "flying winemaker" Michel Rolland and Jacques Begarie, Lapostolle's chief viticulturist and winemaker.

They've brought with them quality-improving techniques that would make local bulk producers gag: they hand destem their grapes and their new, gravity-fed winery eschews the mechanical pumps that can rob a delicate wine of its flavor.

"Two thirds of [Chilean] wines retail for $1 per liter but the category of fine wines [in Chile] is slowly growing," says Marnier Lapostolle, who heads up Casa Lapostolle and its marketing efforts.

Despite the sense of what they're up against, Marnier Lapostolle is convinced the local market is refining its tastes and ready to pony up for the good stuff; here and abroad, Clos Apalta—Casa Lapostolle's top-shelf offering—can retail for more than a US$ 100. Their first vintage, a 1994, was consciously positioned on the market as the highest-priced of Chilean wines.

"The perception of wine in Chile has been changing a lot for the last ten years," says Marnier Lapostolle, who notes that when she got here, no vintages were on restaurant wine lists.

"When we launched our 1997 Clos Apalta in 1999, it was the only wine above $50. Today, we are above $100 and [in Chile] one can find more than 10 wines priced around $100 a bottle," she says. The Clos Apalta has big berry smells brought by the merlot grape in the blend along with fine tannins and coffee aromas from Chile's carmenère grape—smells, flavors and structure that are miles ahead of the country's average offerings.

In many Chilean cafes, bottles of wine are still cheaper than an entrée. Making this switch away from something more closely resembling ordering a beer has relied heavily on getting the wine into the right places.

"Our approach is mainly to choose the place where to be: restaurants or wine stores or international hotels. Positioning is the key of our strategy," says Marnier Lapostolle.

In the United States and on the international market, it's an uphill battle with its own quirks and challenges. Asked what's hardest about selling abroad, Marnier Lapostolle responds, "To build up the brand awareness of Chile itself in restaurants and wine shops."

 
That's right, not Chilean wines, just Chile.

For long-established Chilean producers who lack the funding of a European liquor dynasty, the road to generating change is more difficult.

"The idea is to produce wines for the market, not from our own tastes," says Jorge Balduzzi of Balduzzi Vineyards & Winery. "At the end of the day, you need to sell your wine—so you have to consider the market."

He seems to be shooting himself in the foot by breaking an unspoken code among winemakers: one where you emphasize the individual offerings of your winery, its special climate and its unique wines—the terroir of what's in the bottle.

But Balduzzi, whose degree is in economics, keeps talking.

"In the past, Chilean winemakers had particular tastes: reds full of wood and whites with yellow color and low aromas," he adds, politely referring to cheap bulk wines.

"If we make a mountain's worth, what's that going to do?" asks Carolina Rubio, who—on her first day of work at the winery—is fielding questions with Balduzzi. "It's an old mindset, but it's changing."

"Thirty years ago, the goal here was to sell tens of millions of cases," says Italian Montalcino di Brunello magnate Francesco Cinzano, who saw this country's potential in the early 1990s. "Spain used to do bulk wine. Chile has the same opportunity," he says, referring to Spain's successful changeover to making first-rate wines. "I'm not here for a R.O.I. That's a generation away."

His technique at the Reserva de Caliboro winery includes growing fewer grapes and squeezing the most out of them.

"This isn't the cream of the crop, we only do cream. When wine is this good it's easy to sell," says Cinzano of Caliboro's one wine: Erasmo, a blend which, with cabernet sauvignon, cabernet franc and merlot has a deep and rosy red color, medicinal cherry and licorice smells and subtle oakiness. It is one of the best wines made in Chile.

"My business card," he says, "is in the bottle."    

[21-Jul-2008]

 
  
  

Joe Ray is a food and travel writer and photographer based in Paris. His published work and contact information can be found on his website. He also blogs with French food critic Francois Simon at Simon Says! along with The Boston Globe’s travel blog, GlobeTrotting.

     
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Why the Climate is Ripe for Chilean Wine Brands
 
 Chile has been for a while a very safe choice for many occasions involving wine, with a very interesting cost benefit ratio. They are also wines of a particular personality, and that makes it a lot easier, if not logical, to adopt branding strategies. Chile has a long way to go, but the evolution in the quality of both the wines and the brands seen in the past years is indeed significant. 
Hugo Arantes Carlos, Marketing Analyst, Medley Pharmaceuticals - July 21, 2008
 
 As a consultant for the Chilean wine industry and luckily living in Chile, I enjoy different wines every day, and I am still amazed at the superb flavor and quality of the Chilean wines.I have seen enormous changes in the industry: better quality, better logistics, better labels, market expansion, and some premium wines. However, I still see a lack of marketing investment, that will help Chilean wineries sell to the world at better and well deserved prices.There are many small wineries that are interested in expanding markets, and interested in foreign capital and international network to become true Chilean exporters. This is the typical marketing case: Great product, fairly good pricing, but poor managed positioning strategies.We have long ways to go before we can charge what the real product is worth...meanwhile, consultants like me insist on preaching on the virtues of good and solid marketing principles... 
Pablo R. Naranjo, Managing Director, Marketview Business Consulting Chile - July 21, 2008
 
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