Chilean charm offensive

In a bid to understand how to crack that elusive +£10 wine barrier, Chilean producer Concha y Toro hosted a blind tasting and discussion with key members drawn from across the UK trade

THOSE IN the UK trade know well how hard it is to persuade the British punter to part with more than a tenner for a bottle of wine. Such is the psychological barrier to breaking into a double-digit sum for the country’s average consumer that over 95% of retail sales are below £10. But while the wine market over this price point is small, it’s still a tempting place for producers to carve out a presence. That’s not just because selling at higher prices can bring greater profits, but also because there are image-boosting benefits for being recognised as a producer worthy of an upmarket sum.

There are some wines that sell well over £10 – mostly from a handful of classic regions such as Chablis or Châteauneuf- du-Pape – but for Chile, bypass the £10 point and one finds its on-shelf representation, which is so strong below this price, suffers a dramatic decline. Why? And how can it alter such a situation? It was just such questions that prompted Chile’s largest producer, Concha y Toro, to hold a UK-based event that might yield the answers. Helping the company in this endeavour were Westbury Communications and ourselves, and together we gathered some of Britain’s most respected buyers before showing them a carefully selected range of wines, and getting their views.

Initially we put Chile to the test. Having selected four European benchmark wines, we served each one blind paired with a Chilean equivalent, and asked for the buyers’ thoughts. After all, if Chile is not making wine deserving a £10 plus price point, then it can hardly complain about a lack of listings at this level.

The starting point was Sauvignon Blanc, a grape still in growth in the UK, and one that is widely planted in Chile, increasingly in cool-climate coastal locations. Poured for the panel in the following order were a 2012 Sancerre from Noel Bougrier (£14) and then Concha y Toro’s Marques de Casa Concha Sauvignon Blanc (£12) from the Leyda Valley. After the wines were tasted, the buyers were asked which sample they believed was from Chile. All those present correctly thought the second wine was from the country, and there was also a unanimous preference for it, although opinions varied on the style of the Concha Sauvignon. “It has a pungent capsicum aroma and a herbaceous character which can be quite polarising,” said Alistair Pyatt, wine buyer at Jascots Wine Merchants. “I thought the wine was quite New Zealand-esque, which is either a good or bad thing, depending on what the client wants,” added Chris Horridge from Altus Wine.

As for getting consumers to try it, Simon Taylor, managing director at Stone, Vine & Sun highlighted the challenge for Chilean Sauvignon over £10. “If they [consumers] are over 45, they will probably default to the Loire, and if they are younger, then New Zealand is very often the first choice.” Meanwhile, Marks & Spencer wine buyer Emma Dawson said that brand tiering has worked for Chilean Sauvignon at the supermarket over £10. Taylor acknowledged the importance of tiering for selling higher price wine, before reminding attendees of Chile’s success below £10. “When we sell to pubs, the house Sauvignon Blanc is always Chilean, and we sell pallets of it.” However, he said this offers potential: “There’s a fair chance they will trade up over time.”

CHARDONNAY’S CHANCE

Next we considered another white grape, and tried a similar test with Chardonnay. For this we selected Blason de Bourgogne Montagny Premier Cru 2011 (£15) and the 2011 Chardonnay under the Marques de Casa Concha label (£12), which comes from the Limarí Valley. The buyers were a little more tentative in choosing which wine was undoubtedly from Chile, but were definite in detecting the superiority of the Concha Chardonnay, and amazed that it should retail for only £12. Such was the quality of the wine, Taylor said, “Perhaps Chile should choose Chardonnay to build sales for whites over £10,” with Nash immediately agreeing, stating, “yes definitely”. He also recorded a large market for the grape in the UK. “I have a gut feeling that Chardonnay is coming back, but it never went away in the way that the trade thought it did — it was just dented in sales by the success of Sauvignon Blanc and Pinot Grigio.”

Considering further the commercial opportunity, Dawson admitted that “selling Chilean whites over £10 is harder than reds, but I really believe you can sell both unoaked and oaked [New World] Chardonnay over £10 and people do respond to the quality.”

Furthermore, Taylor was adamant that Chile should benefit from rising prices for European Chardonnay, above all white Burgundy. “Australia makes wonderful Chardonnay but it’s expensive, and it’s the same with California; I’m not a big fan of New Zealand Chardonnay which I find overworked; the value is in Chile and the Chardonnay is getting better and better.”

RED AHEAD

Moving onto reds, we performed the same exercise with Pinot Noir, choosing a Savigny les Beaune 2011 from Bouchard Père et Fils (£17) to pitch against Cono Sur Reserva Especial Pinot Noir 2012 (£10). Before the wines were revealed, the buyers gave their initial reactions. “The second wine was purer and sharper,” said Horridge, before Taylor added, “The first one was fine, but the second was so much more enjoyable.” When it was revealed that the second wine was the Cono Sur Pinot with a £10 retail price, Nash stated, “That would easily beat anything from New Zealand for the same price, or even a few pounds more.” Continuing, he said, “Chilean Pinot has changed so much, three years ago it was pretty average, but it has really come on a lot.”

In terms of the sales opportunity, Taylor stressed the clear increase in demand for New World Pinot Noir from UK drinkers. “New World Pinot is growing in popularity,” he said. Such a trend was confirmed by Dawson, who added that one of Marks & Spencer’s “most successful lines last Christmas” was a Chilean Pinot Noir. Nevertheless, Horridge reminded the panel that the UK consumer is still “more confident buying New Zealand, and will go for New Zealand Pinot over Chile.”

Our final comparative blind tasting concerned Cabernet Sauvignon. For this we poured the Baron des Tours Médoc 2011, a Cabernet dominant Bordeaux blend stocked in Waitrose for £12, to compare with the Marques de Casa Concha Cabernet Sauvignon from the same vintage, and with the same price. This time, the buyers were sure the second wine was from Chile, although they were surprised at the restrained style of the New World Cabernet. “It is lovely upfront, but finishes a little dry,” said Taylor of the Casa Concha Cab, identifying a more classic structure to the wine. Manager at Vagabond Wines Ben Gubbins then commented, “It has instant appeal, but it’s quite shy for a New World Cab; most of them are a lot riper and jammier than that.”

Nash was unreserved in his praise. “I thought it [Casa Concha Cab] was excellent; it is really good,” he stated. As for the Bordeaux, he added, “It’s so traditional, but if you stopped 200 people in the street I would be surprised if anyone preferred the Bordeaux.”

Nevertheless, Dawson said of the Bordeaux, “I’ve got a traditional customer base that look for this style of wine.” Taylor agreed that there was a market for the classic entry-level claret, and pointed out that the lower alcohol level in the wine made it appealing. “I’ve got customers who are frightened of anything that’s over 14%,” he was keen to reveal.

MORE TO GIVE

We then continued the tasting with a further two Concha y Toro wines, also poured blind, which included the Marques de Casa Concha Carmenère and flagship Don Melchor Bordeaux blend from the 2009 vintage. Both wines provoked praise from the buyers, with the Don Melchor in particular exciting the attendees. Taylor described the top-end wine as quite “Bordeaux-esque, with a Graves-like Cabernet Franc character, lovely fruit, and a long finish.” Continuing, he pointed to the wine’s potential to improve with age, saying, “I think this has lots more to give.” Similarly, Pyatt said, “It has ripe tannins, and long length and a touch of graphite, which I love, but it needs a year or two.”

But Gubbins believed that the Don Melchor was approachable in its relatively youthful state, unlike many top- end Cabernet blends from Europe. “The is a top New World wine that’s classy, with finesse, and yet you could sell it to drink, whereas Bordeaux of a similar level would be hard to drink now.”

As for increasing the sales for such a revered wine, with a £50 on-shelf price, some of the buyers drew attention to the difficulty of selling Chilean wine at this level. Taylor said, “I couldn’t sell it.” Pyatt agreed, although both buyers felt that it could have greater commercial potential at £35. Gubbins on the other hand saw an opportunity at his own outlet, which offers customers samples of certain wines in store via Enomatic wine preservation and serving machines. “If you put the Don Melchor in an Enomatic it would sell,” he stated, noting that the retailer has successfully sold a £100 Argentine Malbec having offered it to shoppers for £6 a sample. “If they have the money, as soon as they have tried it, they are sold.”

FINDING THE KEY

Tasting aside, the attendees were then asked to sum up what was necessary to bolster Chile’s sales over £10. For Taylor, a personal recommendation focused on known international varieties is key. “As an independent merchant we find that if you get behind things it’s amazing how much and what you can sell, and I’m an absolute believer in Chile [over £10], but it is focused on Chardonnay and Pinot Noir.” As for the Bordeaux blends, he said, “the wines are seductive but paradoxically they are a harder sell: the fact that the icon wines from Chile are so often a blended in a heavy bottle with a symbol on the label doesn’t really help consumers very much.”

Gubbins identified £15 as a “sweet spot” for Chile, but generating more sales at this level would require “innovation” he said. “It’s a bit backward to think that Chile can win a good corner there [at £15] with the usual suspects. If the country is really to capture people’s imagination then it will be with things like old vine Carignan or barrel-fermented Sauvignon: there’s no shortage of creativity in Chile, but the wines are not making it here.”

Taylor agreed, and criticised the UK trade, with a few exceptions, for “not seeking out the exciting things that are happening in Chile”. Dawson defended the UK buyer, and said that she was aware of things like the MOVI movement (the Movement of Independent Vintners), but pointed out that the production levels were far too small from these wineries to make a noticeable impact in Britain’s major retailers.

Horridge then suggested that Chile would benefit from a brand with clear visual tiering to take consumers up a price ladder. Nash agreed, commenting, “It comes back to packaging… the UK trade is poor at explaining to the customer [visually] why a £12 wine is better than a £6 one.”

More wine personalities were proposed by Pyatt as a further necessary step for Chile to build a greater share at higher price points. “Chile is lacking personalities and this is really important,”he said. “If waiting staff are trying to up-sell and you can say something about the winemaker, it really helps.” Nash said the same was true in the off-trade, and admitted, “We put the term ‘winemaker’s selection’ on the label because it reassures the consumer that there is a personality behind it.”

Another technique to encourage people to trade up within Chile centred on promoting the country’s wine regions. Horridge said, “Regionality gives us a reason to talk.” Gubbins agreed, and said that Chile should look to New Zealand for inspiration. “If you think about New Zealand, it arrived with regions: Marlborough and then Central Otago.” Acknowledging the challenge for Chile however, he said, “It is a long and difficult road to create an interest for regions with specific grapes.”

So moving upmarket will require tiered marques with price-related packaging cues, innovative wines, winemaker personalities, regional brands and a national image-building programme. However, that’s not to suggest the current situation for the country’s wine business is poor. “There is a very positive image of Chile, it’s just taking time to work through to the wider trade and consumer,” said Taylor. Nash wholly agreed, while also noting that today’s trends were benefitting this single country in particular: “More than ever consumers are looking for value, and that is Chile’s great strength.”