Changing Chile

Long seen as the dependable but unexciting workhorse of the wine world, Chile is starting to show new colours. Jamie Goode reports

Chile’s reputation came from making cheap, tasty wines. This viticultural paradise, short on vine pests and diseases, but big on sunshine and long, dry summers, has proved adept at meeting the demands of export markets. Its scale of production – unlike so many other wine countries – is better suited than most to the needs of modern retail. 

But it is at the higher end of the market where Chile has struggled, finding it hard to shake off the impression that Chilean wine is good value for money, but nothing more. 

And, despite the efforts of some, there have been few globally recognised Chilean fine wines to create a halo effect, benefitting the overall image of the Chilean wine industry. There are signs, though, that this is in the process of changing.  

First, let’s look at the big picture. The latest official figures on exports of bottled wine (from December 2012) show that the two most important markets by some distance are the UK and the US, but these markets are not the most profitable and are contracting slightly. The UK is the largest, with 8.8 million 9-litre cases exported in 2012, but also has the lowest average price, at US$22.9 per case. 

The next three countries are Brazil, Japan and the Netherlands, with sales of around 3.4 million cases each. Then come China and Canada, at around 2.3 million cases. Ireland, Denmark and Russia make up the top 10, each with around 1.5 million cases. 

In terms of growth, Japan and China both grew more than 20% between 2011 and 2012, and Russia grew 10% over the same period. The average case price for exported wine is US$29.1 – China ($35.3) and Canada ($40.9) are the most profitable markets.

Between 2005 and 2012 exports grew from 31.9 million cases to 48.8 million, with price per case rising from $24.90 to $29.10. It is worth emphasising that these figures relate solely to bottled wine, but they are a useful guide as to what is happening overall. 

It seems that Chile is holding its own, showing modest growth, but perhaps less growth in price per case than it would like. These figures reinforce the observation that Chile has always been strong at the more competitive commercial end of the market. There are very few countries which can boast such a strong offering at such low prices. 

Felipe Tosso, chief winemaker with Ventisquero, is well placed to comment on export markets. “Today markets all over the world are quite tight, but there are ways of working them,” he says. “It’s really important to understand the different markets and of course have good partners in the countries. “Today the markets that are growing strongest are mainly in Asia, with China, Vietnam, Japan and Korea.” 

He adds that the most important markets at the moment are US, UK, Brazil, Canada, Japan and Chile’s domestic market, but points out that the UK, Thailand and Ireland are either not growing or declining.

What about Concha y Toro, Chile’s largest and most important producer? “Over the past year we have seen good results in Asia (China and Japan among others), also in the Nordics, Brazil and Mexico,” says Thomas Domeyko, export director. “It has also been a really good year for the UK,” he adds. “Our most important export markets are US and UK, which account for 33% of company sales and, together with Chile, more than 50% of sales.”

Emergence of boutique wineries

The Chilean wine industry is heavily export focused. It has to be, because there isn’t a strong domestic market, and its close neighbours haven’t traditionally been buyers of Chilean wine. About 70% of Chilean wines are exported, and this is reflected in the fact that, while Chile sits 11th in the world wine production table (2010 figures), it sits 21st in wine consumption per capita. 

In addition, many Chilean wine estates are large, with in excess of 200ha of vineyards, and often owned by wealthy individuals. The consequence of this is that Chile has had a relative lack of boutique wineries. 

Without a domestic market buying mid to high-priced wines, small start-ups find life difficult. It’s hard to begin with export markets without initially establishing a domestic presence. 

And, typically, in most wine countries it is the smaller wineries that tend to drive the fine wine dimension – they’re ideally placed to innovate, take risks and have a focus on-site. Young winemakers in Chile can’t easily make a small amount of their own label on the side, as do many of their peers in Australia, New Zealand, California or South Africa, because they’d have a very hard job selling it. 

This lack of boutique production has hampered the development of a really engaging fine wine dimension, and has preserved the image of Chilean wine as safe, reliable but rarely exciting. 

Change is on its way, though. MOVI (Movimiento de Viñateros Independientes), an association of small independent wineries, was formed in 2009 with 12 members – now there
are 20. 

The likes of Attilo & Mochi, the Garage Wine Company, Villard, Lagar de Bezana, Gillmore and Flaherty are all making interesting wines. It’s good to see the way these boutique wineries are working collaboratively. In isolation, they’d lack the resources to reach out to export markets effectively. 

Canadian ex-pat Derek Mossman of the Garage Wine Company has been an effective ambassador of this movement, and he’s also involved in a second collaborative venture adding interest to the Chilean wine offering. 

This is VIGNO (pronounced veenio), which stands for Vignadores de Carignan. It’s a collaborative project to promote old vine Carignan wines from Maule, and the name Vignadores is a mutation from the Spanish term for winegrower, viñadores, with the ‘g’ from Carignan added in. 

Old vine Carignan is a neglected treasure of the Chilean wine industry. It was first planted on a large scale in Maule in the early 1940s when, in the aftermath of a catastrophic earthquake in 1939, the Ministry of Agriculture proposed encouraging the planting of Carignan to improve the region’s wines. Previously a workhorse variety that was used to blend, Chilean winemakers are now realising they have a precious resource.

VIGNO has 12 founder wineries, representing a mix from the small to the very big. The wines must be made from at least 65% old, dry-farmed Carignan vines from Maule, with any balance being also old vine Maule fruit. The vines have to be unirrigated and head-pruned bush vines (gobelet).  

Both these movements are a step in the right direction. There are also some other interesting developments, which stem from exploring new viticultural areas.

Newer regions

The big story in Chilean wine is the emergence of new regions, but this is still a story that is only a few chapters in. Few countries have expanded their vineyards in recent years in the way that Chile has. 

In the south, we have Bío Bío, in the north we have Limarí, Elqui, and even newer vineyards in the Atacama desert. There is also expansion of existing regions into more marginal coastal areas, or towards the Andes. 

Marcelo Papa, chief winemaker for Concha y Toro, has helped lead the way here. “One of the things we have been able to do with our great variety of vineyard holdings is to explore the potential of many more marginal areas,” he says. “Regions such as Limari, Cauquenes, Rapel coast and Bío Bío are the future stars of the country.” 

Noted Chilean terroir expert Pedro Parra agrees that Chile has an amazing diversity of vineyard soils, but he thinks these aren’t yet reflected in the diversity of wines on offer. Parra points out that Chile has plenty of terroirs, but he complains that the wines are still a little similar. “Winemaking overpowers terroir in many cases,” he says. “But this is changing and the vines are getting older.” 

He highlights Cauquenes, Itata, and Bío Bío. But one factor that is holding Chile’s wine scene back, according to Parra, is centralism. “It is terrible here. People used to think that everything happens near Santiago. For many years we believed (and the world too) that the best places were Casablanca, Leyda, Maipo and so on.”

Felipe Tosso of Ventisquero has been busy exploring the potential of the Atacama desert, albeit on an experimental scale, and has released two remarkable wines under the Tara label – a complex, slightly cloudy, but thrillingly expressive Chardonnay and a precise, elegant Pinot Noir. 

The attraction of Atacama lies in interesting soils, coupled with a cool climate. “To me, it’s a complete revolution that is coming,” says Tosso, “but we are not there yet. I feel that changes in styles, in origin, in personality of the wines, in freedom, and some craziness are on the way. 

“As an example, some traditional old grapes such as Pais, which was always treated as a poor grape, is producing today some very interesting wines – from simple juicy wines, others with a lot of sense of origin, and even sparkling. But we are also recuperating an old way of making Pais called Pipeño. 

“This is a simple wine sold in big bottles – the wine that has been consumed in the countryside for decades. Today we can start to see some in wine stores, or direct sales. 

“We are also seeing some natural wines, wines in anfora, new Mediterranean grapes such as Garnacha and Monastrell, the old Carignan and Moscatel grapes and, in the north, new wines from limestone soils that really give amazing minerality. 

“In addition there are all different styles of Sauvignon Blanc, from the Andes to very coastal, and some small projects in the very south of Chile.” 

De Martino is a winery leading the way in this regard, breaking with the image of Chilean wine as dependable but a bit dull. In its range it has a skin-contact, no-added-sulfites Muscat from Iata, a Cinsault from the Secano Interior, a bush vine Malbec-based blend from Maule and a high-altitude Syrah from Elqui, among others. 

This is not what we’ve come to expect from Chile, and it’s great to see. 

I ask Tosso where Chile was trying to position itself. “It is a complicated question,” he replies. “Of course, I could tell you we want to be seen as a premium grower, but any wine country would say the same. 

“To me, Chile is in a revolution that is just starting – what will happen in this revolution, nobody knows. But certainly there is a new force inside Chile, and it will change the wine scene here for the rest of our lives. “We will have different Chiles – the classical, the commercial, the outsiders, the boutique and so on.”

Thomas Domeyko of Concha y Toro also shares his thoughts. “Chile is positioning itself to become a relevant player in the premium segment,” he says, citing brand Casillero del Diabolo, which grew 12% in the past year. 

“The next step is to create and grow a market for Chile one step above, at the level of Marques de Casa Concha,” he adds. “Chile is in an extremely good position – a relevant player not only at entry level but increasingly at premium, and this gives us immense possibilities to grow.” 

Domeyko reveals that Casillero del Diablo is doing 4 million cases annually worldwide and, significantly, has the potential to become a top 10 wine brand in the UK. “If you examine the others in that list, very few are premium level brands,” he says.

So, Chile is changing. Those of us who have been following Chilean wine for a while have always hoped
that some more interesting, compelling wines would emerge, and I don’t think it’s exaggerating, or simply wishful thinking, to suggest that change is now coming. 

“This year is my 20th vintage in Chile,” says Felipe Tosso, “and it feels as if I’m just starting, so many things are happening. It’s an exciting time to be a winemaker in Chile.”