Chile Cha-Ching

Since opening its generic office in the UK, Chile has surged ahead of its nearest rivals. Could this mean PR actually works?

ONE OF the big wine stories of the past 12 months has been the growing prominence of Chilean wine in the UK market, thanks in large part to the establishment and funding of a dedicated UK promotional team in 2003.

For the benefit of the Chileans themselves, and for other countries who might be hoping to emulate their success in the UK, it’s worth having a look at the effect of the UK organisation on the share of press mentions received in 2004 against last year.

For comparison, we have chosen two other countries who happened to have roughly the same share of voice as Chile in the third quarter of 2003, when Wines of Chile UK started working at full capacity; Italy, and Argentina.

The comparison is significant for other reasons, of course; neither of these comparison countries has a strong UK presence of its own, as defined by a dedicated UK promotion office with full-time employees.

So how has Chile done? Our starting point was the third quarter of 2003, when Chile took 5.8% of mentions, compared with 6.1% for Argentina and 7% for Italy.  The chart shows the transformation in Chile’s share of voice starts in the first quarter of 2004, when in one month (March) Chile captured nearly a third of all mentions – something that normally only France can do on a regular basis.

This momentum has continued throughout the year, and Chile can now rely on approximately one in 10 mentions in the UK press on a fairly regular basis.  And how have Italy and Argentina done by comparison? Italy has managed to hold its position in terms of share of mentions at around 6%-8%, while Argentina’s has slipped to around 3%. No positive transformations there, then.

Whenever one sees data like this, the question we like our clients to ask is, so what? What relevance and/or value does this information have? We think this is a significant shift not just in terms of whether a particular type of wine is getting press airtime, but also because the national wine media does have an impact on subsequent trade buying decisions.

The additional significance is that wine writers mostly (but not always) recommend wines that are aspirational – ie over £5 in non- marketing parlance.  As well as encouraging consumers to trade into the country category, recommendations might also persuade them to trade up.

What other evidence might there be to support this? Nielsen year-on-year offtrade sales data for the year to June 14, 2004, shows that Chile’s share of UK off-trade wine sales rose from 5.5% to 6%, while Italy’s share fell from 10% to 9.9%.  Argentina grew marginally from 1.5% to 1.6%. 

Looking at prices in UK multiple grocers, Chile’s average price per bottle grew from £3.20 to £3.41 over the same period, while both Italy and Argentina saw their price per bottle slip slightly.

Clearly there are other factors at work here; brand owners act independently of generic bodies, as do multiple grocers.  However, momentum is an important factor in selling wine, and from this evidence at least, a strong generic body is an important driver of success.

About…THIS RESEARCH AND WINE INTELLIGENCE

This analysis is brought to you by Wine Intelligence, a research-led marketing consultancy specialising in the wine industry.

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