Location, Location, Vacation?

Chile must promote its different regions if it is to progress beyond its valuefor- money image and persuade consumers to trade up. But, sadly, tourism is unlikely to provide the key, says Robyn Lewis

"THERE is a very long strip of Chilean territory that produces great wines, extending from Limarí in the North to the Bío Bío River in the south.  That’s around 1,000km," says Paulo Zifferblatt Rosales at San Pedro in Chile.

"We’ve convinced the world that Chile generically is a great choice, now let’s get more specific: Casablanca, Colchagua, Lontué. In the UK we have already established a position under £4 and consumers understand Chile.

Now let’s convince them that pound for pound Chile will give them the biggest bang for their buck, even at £15."  Unfortunately for Rosales, however, and the rest of the Chilean wine industry, things just aren’t that simple.

The Wines of Chile board, and the UK office in particular, has won much praise for its success in promoting Brand Chile to consumers and its image as a value for money, consistent producer of international varietals has been hard won.

But is it really possible for this image to be turned into one of a premium producer of individual wines from unique regions? Given that most UK consumers buy from a category they know as South America, promoting the virtues of a single region of a single country will not be easy.

Nick Ingham of Grape2Wine in the UK agrees.  "The problem Chile is now facing is that the public see Brand Chile as a producer of good wines but few are aware of individual brands or regions.

I believe the next step for Chile has to be promoting the regional differences.  This would help create interest in the marketplace with consumers and it would preserve a good many medium producers, who would be able to continue to make their unique styles of wine.

This is all at a time when struggling wineries are being bought up and there is a monopoly situation arising at an alarming rate.  Currently consumers do not understand this at all because there is not enough definition of the regions at this time, but the future of  many regional wineries depends on this strategy being implemented – and as soon as possible," warns Ingham.

Another challenge facing the regional promotion of Chile is the tourism issue. The proximity of European wine-producing regions and the popularity of South Africa and Australia to British tourists has undoubtedly helped the generic and regional effort of these countries.

Chile, however, does not have this advantage.  "Chile is not widely known as a tourist  destination and cannot compete with Europe or the rest of the world," agrees Carlos Serrano, export director at Viña Montes.

"However, there is definitely untapped potential for promoting Chile as a destination for the more adventurous traveller.  In fact, it was recently voted number one long-distance destination by British travellers."

However, it cannot be as simple as leaving the tourism industry to do the job, the wineries must play their part too, as Eduardo Wexman, of the Errazuriz winery is keen to point out. "The Chilean travel industry is undergoing significant development," he says.

"During the last decade the number of tourists has dramatically increased and, as a consequence, hotel services have developed by means of the relevant investments through the country.

Gastronomy has also evolved, as well as new and interesting tourist attractions, and the transportation and road systems have been modernised. 

Public and private organisations that promote tourism have been developing an important campaign, but wine is also distinctive to Chile and producers have had to understand that success partly implies promoting travel in wineproducing regions.

In this sense, the wine routes of Colchagua and Casablanca have been pioneers and other valleys are looking to that.  However, specifically in terms of wine tourism, if we compare ourselves to Napa, for example, there is still a lot to do."

Casablanca and Colchagua were both regions that came up time and time again, as producers look for regions that have been successful in terms of promoting themselves. "The Colchagua valley in particular has really lent itself to marketing as a region," says Mario Pablo Silva of the Casa Silva winery.

"Colchagua created the first wine route in Chile and was the first regional association to promote an origin of denomination, which was created a few years before the Wines of Chile organisation.

Emulating Colchagua, there are other valleys that created their own organisations and, today, it would be worrying to think that this aspect was not being organised properly," he continues.

"In a short time I think we will have the majority of the valleys organised, and I think that as producers realise more and more the importance of their regions and their identity, this can only be good for Chile and Chilean wine."

Silver believes that while the aim of the generic campaigns must be to promote Chile, "Chile needs to be promoted from the valleys.  This will help increase the understanding of diversity and will give consumers alternatives.

Perhaps they will not understand it in the first instance but by tasting wines from a different valley, wines of better quality, grapes planted in the best place for each variety they will soon note the difference."

Viña Ventisquero, which has recently launched the regional brand Yali in the UK believes the brands fighting it out for the space on shelves are limited in ways they can differentiate themselves from the competition.

For Chile to broaden this range, it needs to introduce and gain a customer following for wines from its different valleys, claims the company.  While this may sound all a bit too easy, the fact is that the UK has already demonstrated a willingness to buy wine by region.

Australia has managed to gain some recognition for Barossa, McLaren Vale, Coonawarra etc. and buyers seek to list wines from these different valleys and not just different varietals from Australia as a whole.

"Consumers in the UK subconsciously understand the concept of regionality when purchasing Old World wines," comments Raul Beckdorf, commercial director of the Anakena winery. "Rioja, Burgundy or Bordeaux are all prime examples of the successful marketing of terroir and regionality, even though many consumers do not realise they are regionally-driven wines.

As for the UK trade, there is a solid understanding of the varying regions, climates, terroir and varieties.  Also, the UK trade seems to have a good understanding of which varieties best suit each region and this is regionality in its purest form."

However, the UK is a unique market and consumer knowledge here is high, so would a regionality-based marketing approach be likely to work in other export markets? Beckdorf suggests Germany, Japan, Denmark and the US as candidates for a similar approach for starters, while others tread more carefully.

"Naturally this approach will work best in markets whose consumers already have a certain knowledge of wine," says Francois Walewski, vice president of international sales at the Altaïr winery.

"It also has advantages in those countries where there is strong competition, for example in South America.  Brazil would be an interesting market to approach this way."  Last year the US received its first Chilean wine ambassador and there are plans for others.

Meanwhile, the UK generic office has thus far been seen as such a runaway success that it is looked on by many as a model for others to follow. 

Take the Wine Intelligence results for press mentions by country 2003-2004 where Chile peaks at some 16% of mentions in the first quarter of 2004, directly after the WOC UK office opened in June 2003, and it maintained a higher rate of mentions up to the last quarter of last year.

So how does a generic office achieve this success? "It’s definitely a dripdrip process," explains WOC UK managing director, Michael Cox.  "Every New World country – and Chile is no exception – starts off with a fairly basic message, and Chile’s was consistency, quality and very good value for money.

Then comes the time when you need to develop that, and you need to develop it in order to keep people’s interest in the category.  I’m a firm believer in the idea of sowing the seeds of interest and that’s where regions come in.

The problem is, of course, that people don’t know much about Chile, so it can seem a bit much to ask them to know all about regions of Chile.  But in the beginning it is all about intriguing people so they want the information, which you can give them.

Then they begin to understand the concept.  It’s a case of using everything that is available in the right place at the right time," he says.

"At the end of the day we simply can’t afford to be too homogenous in today’s market."  And if that is true then Chile, with its 1,000km of wine producing regions, is well placed for future Success.