CHILE GENERIC PROMOTIONS – In the Hot Seat

The head of Wines of Chile, and ex-Coca-Cola man, Ricardo Letelier, is working to increase funding to promote Chile’s premium wines abroad. A weak US dollar is the only blot on the landscape, says Robyn Lewis

The worry for Chileans has been that no one really knows that much about their country. Most people aren’t even sure where it is, let alone what it is famous for. The Andes, aren’t they Argentinian? Rodeo, isn’t that North American? What is the national cuisine? The national dress? 

But things are beginning to change and, increasingly, when thinking of Chile it seems consumers do have an awareness of its existence and more than that, they’re aware that it’s a wine producer.

While no one person is specifically responsible for this – frankly astounding – feat of marketing the man at the head of the generic body Wines of Chile (WOC), Ricardo Letelier can surely take some of the credit. An ex-Coca-Cola marketing executive was always going to be a controversial choice for the wine trade but the Chilean wine industry can pat itself on the back for taking the decision, even if Letelier himself is reticent to take the praise.

“Yes, things are looking good for the Chilean wine industry at the moment,” he says. “This year’s figures show value is increasing more than volume, the average price is up and it looks like all the indicators of success are going our way. We must not get over-excited though, this is a long-term strategy we are following. We need to keep improving, keep increasing the awareness of Chile and keep pushing the idea of Chile as a producer of premium wine.”

The immediate challenge facing Letelier is the need to increase revenue for the organisation. Thus far, the body has survived on funding from its members – 86 Chilean wineries – and in order to raise more cash Letelier is turning his focus to the rest of the supply chain. “We need to discuss how to get all of the value chain – from the grape growers to the dry goods suppliers – involved in WOC. This is a big challenge but necessary if we are to increase finance.”

Another challenge, Letelier says, that is facing him and the wine industry in Chile is the weak US dollar, which against a strong peso is affecting the exporters. “If the economy is doing well and the price of commodities remains high then that will continue to have an impact on the exchange rate and we will have to learn to make profit at that level,” he says. “We have so far done well as a country with macro-economic strategy, and now is the time to turn our attention more to micro-economic reforms.”

There are also, of course, individual strategies and obstacles in each export market, the most important of which at the moment remain the UK and the US, according to Letelier.

“In terms of the UK, the plan is to develop a more segmented channel focus. Looking at the on-trade and also splitting the off-trade channels will be the aim for the next year. Clearly this is in keeping with our overall strategy to push premium Chilean wines. In terms of the US, we are at a slightly different stage here, more the initial stages really. So in that case the aim is to get the right information and promotional material out there,  and to build on the knowledge of the market and the resources that the team we now have there can provide.”

As for other markets, “it’s too early for us to look at any more”, Letelier says. “What we have learned from the experience we already have is that you need a minimum amount of investment and level of resources in any given market in order to enjoy any success there. That isn’t to say there aren’t other important markets. Canada is a focus for us, as is Ireland, Germany and Asia, and in these markets we work closely with ProChile. In Japan, for example, through ProChile we are doing tastings and events and things and are in a good position there.”

Even though exports to Japan are down this year? “Well there is a lot of re-structuring going on there at the moment and many of the wineries are changing importers, so I think that has had an effect on the figures. Generally in Japan the economy is in better shape than it was a few years ago and that,” says Letelier, “bodes well for us.”

© db September 2005