Chile wine chain analysis

Chile's wine chain analysis
PRODUCTION
INBOUND

EXPORT


DOMESTIC
MARKET

IMPORT
INPUT
CONTEXT
OUTBOUND LOGISTIC
70%
CONSUMER PROFIL
DISTRIBUTOR
JOINT VENTURE
VINEYARD STRUCTURE

W
I
N
E
R
I
E
S


M
A
R
K
E
T
I
N
G
export strategy
Free trade agreements
SWOT ANALYSIS
ON TRADE (CHR)
OFF TRADE
Supermarket
Specialised shops

C
O
N
S
U
M
E
R
S
SALES MARKET
21%
79%
43%
36%
http://www.diariodelvino.com/emp/prov/proveedores.htm#chile

Chilean suppliers
Free Trade Agreements USA


Mercosur

Chile:
Liberal economy
Tax: 6%


Own cooperage:
Finished the product
Cheapest labor
Distribution easier
Visit of clients

Exportation:
-Space
-Transport cost
-100% usefull

shooks
-Stocked outdoors for two or three years
-Carefully shaped

Harvested in France and prepared
Barrels
1st production = Red wines
Positive vision of French product

Investment opportunity:

French oak trees are unrivalled
TOTAL WINE EXPORT PER PRODUCT
PRICE RANKING
WINE EXPORT IN VOLUME IN 2013
EVOLUTION AND FORECAST CHILE WINE EXPORT
8,44 %

8,01 %

9,74 %

67,32%




ARGENTINA


Wine imports
Sparkling wines
29 % of the volumes
(decreasing)

Bulk wines
Close to 2% of the volumes


Bottled wines
68% of the volumes


3 categories (Sud de France Developpement, 2013) :
Between 2012 and 2013
Wine Imports
Important progression of wines elaborated with organic grapes (Odepa, 2013):
+98% in volumes
+162% in values


Principal providers :



ITALIA



SPAIN

FRANCE
 Direct or through a distributor
Inscription at the SAG’s register
Customs duties: 6 %*
* Le moniteur du commerce international
In 2013, represent (Sud de France Developpement, 2013) :
- 4,62 millions of liters (17,74 millions USD)
- 2500 liters of must (3800 USD)
From:
VAT : 19%
Alcohol Taxe : 15%
Production cost : 1500 to 3200 €/ha
80% of chilean wines < 4,80 €
Prices of chilean wines
= The best value for money of the world?

« "THE BEST OF THE NEW WORLD FOR THE ENTIRE WORLD»"

CHILE
Source: Wine of Chile

Scant rainfall during the growing season from December through the harvest.
Less danger of botrytis
Chile has not the Phylloxera.

Exceptional climate conditions
Information about Chile
Chile is located to the Southwest of South America.
Total population 17,5 M.
Santiago’s population 6,6 M.
The population is concentrated in the center of the country.


Source: Wine of Chile

14 distinct wine regions.
Red varieties represent 73% of the varieties produced.
White varieties represent 27% of the varieties produced.
Evolution of hectares planted for Carmenère (strategic pillar)
Concentrated production

Vineyard characteristic:
Chilean vineyards and wine production

Concha Y Toro
San Pedro
Santa Rita
Santa Carolina
70% of total production

Types of wineries

Source: CGEAL, 2009

Chilean Wines Production Structure

Wineries = 339
grapes suppliers <=> 1/3 vineyard
Total vineyards area: 205 mha in 2012 (17,8% increase relative to 2000; 10th vineyard area in the world)
Production volume: 12554 mhl (88% increase in 2012/2008; 9th world wine producer)
Including:








Source: OIV


W

O

T

S

Agro-climatic conditions
Carmenere: unique & differentiating
Price to quality ratio
Open country
Stable economic & commercial policies
Successful with the export
Growing competition
Non-tariff barriers & increased taxes
Bulk wines= cheap image
Strenghtening of the Chilean peso
World production and consumption:
discounting strategy?
Consumer's preference
Explosion of social network
Educated & Informed consumer
Premium wines offer
Increasing preference for fresh wines
Development of the Asian market
Real wine consumption:

Total Consumption: 2 700 mhL

Total inhabitants: 16 millions

Real consumers: 5,44 millions

Real consumption: 48L / person



National data (2013)
= 16L/inhabitants / year
Domestic Market
of Consumers
60% high level of incomes + Knowledge

Who are wine buyers? (Melo, et al., 2008)

6 first biggest cities  45% of total population
Quote: 16 634 603 Chileans=>80% urbane + 20% rural
Wine consumer characteristic
El Pisco

(Gonzalo Rojas, 2007):

Consumption : 2,1 liters per capita

300 millions kilos of grapes

37% of distillated products

La chicha (El Diaro de la Region del Maule, 2011):

They consume it for national days.

FA incomplete of red wines

700 000 liters produce per year

Grapes of cuve or table ?

Consumption
High alcohol level
No country image
Low-priced wines
No clear category differentiation
Long distance with primary markets
low level financing & limited structure for the promotion
HOLDING COMPANIES
COOPERATIVES
LARGE FAMILY BUSINESS
from national capital
NEW WINERIES
- large wineries
- small/medium wineries
FOREIGN SUBSIDIARIES
CURRENT AND PROJECTED PRICE FOR CHILEAN BOTTLED WINE COMPARED WITH OTHERS WINE PRODUCER (US/case)
Objectif: To grow at an annual average rate of 9,2% in value to reach the goal of US$ 3 billion in exports of bottled wine by 2020.

30%
International suppliers

Source: http://www.redempresarial.cl/manual2/insumos_mat
cabernet sauvignon: leading variety
carmenere; differentiating; amabassador variety
sauvignon blanc: leading white variety
Wine tourism incomes per region in $US in 2005

Wine tourism is increasing
Regions more developed than others
Wine Tourism
Age of vineyard and exported production
8th largest wine producer
source: (Région Languedoc Roussillon, 2012)
Limits of our work
- Different institut follow different count rules making that the available data for different period are incomparable
- Difficulties to contact chilean wine actors
- Lack of time
Bibliography
Source: SAV Ministerio de Agricultura 2011
GRAPE VARIETIES PLANTED
Source: Aduanas de Chile 2012
Source: Aduanas de Chile 2012
Source: Aduanas de Chile 2012
Source: SOFOFA 2010
EXPORTING COMPANIES
Source: Wine of Chile 2010
Sud de France Developpement, 2014. Chili : importation de vin. [On line]. Available on http://www.suddefrance-developpement.com/fr/fiches-pays/chili/vin/importation-de-vin.html. Consulted on February, the 19th.

Le moniteur du commerce, 2014. Accès au marché. [On line]. Available on http://www.lemoci.com/Chili/Acces-au-marche/011-47312-Chili.html. Consulted on February, the 20th.

ODEPA, 2013. Productos orgánicos: exportación e importación 2012-2013. [On line]. Available on http://argencert.com.ar/sitio/wp-content/uploads/12070.pdf. Consulted on February, the 23rd.

Wines of Chile, 2010. Strategic plan 2020 - International market. [On line]. Available on www.winesofchile.org. Consulted on February, the 23rd.
CECO, 2006. Habitos Alimenticos de los Chilenos, Talca: Facultad de ciencias empresariales.

El Diaro de la Region del Maule, 2011. SAG entrega consejos sobre consumo de carne y chicha en las Fiestas Patrias. [En ligne]
Available at: http://www.diariolaprensa.cl/region/sag-entrega-consejos-sobre-consumo-de-carne-y-chicha-en-las-fiestas-patrias/
[Accès le 25 Février 2014].

A Review of the Development of Wine Tourism in Chile, 2008. Autor : Martin H. Kunc. School of Business, Universidad Adolfo Ibanez, Santiago, Chile. [On line]. Available on.
http://academyofwinebusiness.com/wp-content/uploads/2010/04/A-Review-of-the-Development-of-Wine-Tourism-in-Chile_paper.pdf
Consulted on February, the 23rd.

Logistica & Marketing, Fortalenciendo los canales de distribucion, Universidad del Pacifico, Colombia, 2009. [On line]. Available on.
http://www.usergioarboleda.edu.co/marketing/docs%20PDF/Presentacion%20Canales%20chile.pdf
Consulted on February, the 25th.

Wines of Chile, 2010. Strategic plan 2020 - International market. [On line]. Available on www.winesofchile.org. Consulted on February, the 18th.



Bibliography II
Gonzalo Rojas, A., 2007. Reseña sobre el pisco en Chile, Santiago : Pontificia Universidad Católica de Chile.
Jiménez, F., Marshall, B., Ortega, J. & Foster, W., 2006. Factores que intervienen en la frecuencia de consumo de vino en el sector oriente de Santiago, Chile. Economia Agraria, Volume 10, pp. 37-52.

Melo, O., Buzeta, J. & Marshall, M., 2008. Determinantes des Precio del Vino en el Mercado Chileno: un Estudio de Precios Hedonicos, Vicuña: Pontificia Universidad Católica de Chile.

Région Languedoc Roussillon, 2012. Chili: Présentation du marché. [En ligne]
Available at: http://www.suddefrance-developpement.com/fr/fiches-pays/chili/vin/introduction.html
[Accès le 23 02 2014].

«Chili viticole » : document de synthèse suite au voyage d’études organisé par l’IFV Midi-Pyrénées du 1er au 9 février 2008. Available on http://www.vignevin-sudouest.com/publications/voyage-etude/documents/synthese-chili.pdf

International Organization of Vine and Wine: «Statistical report on world vitiviniculture 2013». Available on http://www.oiv.int/oiv/cms/index?rubricId=44538631-7ad2-49cb-9710-ad5b957296c7
Instituto Nacional de Estadistaicas Chile : «Bodegas de vino 2011». Available on http://www.ine.cl/canales/chile_estadistico/estadisticas_agropecuarias/estadisticas_agricolas/agricolas.php

National Commission for Scientific and Technological Research (CONICYT). (June 2007). The wine and vine grape production sector in Chile. Santiago de Chile: IDEA Consultora Ltda.

Servicio Agrícola y Ganadero. (n.d.). Servicio Agrícola y Ganadero. Retrieved February 20, 2014, from http://www.sag.cl/

Chile: Relaciones de género en la industria vitivinicola » Comercio, género y equidad en América Latina generando conocimiento para la accion politica. Chile-cadena-vitinicola.pdf Rosalba Todaro y Nora Reyes- Marzo 2009
“A chilean wine cluster? The quality and importance of local governance in a fast growing and internationalizing industry” Evert-Jan Visser


Source: ODEPA 2012
Source: ODEPA 2012
Source: ODEPA 2012
Harvest machines: 58 (2013)
France Spain
Seedlings : 24 unites (2013)
USA
4 wineries
What attracted Foreign wineries to invest in Chile?

a unique climate and soil characteristics
A regulatory framework warranting a availability of land
A low disease burden
Relatively low labor
Stable macroeconomic environment

What was their impact on local wine industry?

technical expertise
marketing
know-how
consumer market information
prestige
scale economies in distribution costs.


CAZORLA Marion; DE LARD Laure; GRAVE Justine; GUZMAN SALINAS Jose Ignacio; ILIASHENKO Ievgeniia; LEDUC Jean-Christophe; TAPIA VENEGAS Juan Pablo
Thank you for your attention
and any questions?