...Investment Attractiveness of the Chilean Wine Industry 1. Introduction Over the past 30 years saw major transformations within the Chilean wine industry, this transformation allowed many of the talented Chilean winemakers on this unique opportunity to produce world class wine with its own unique personality and character. Chile currently is one of the leading nations in the global in the wine industry, currently ranked at 8th as the world’s largest wine producer and ranked 5th as the largest wine exporter. Chile exports a massive 70% from its own wine production making Chile the world’s most globalised wine industry. Even with the enjoyed success by the nation, Chilean wines find themselves facing huge competition globally in different markets as the wines produced in Chile sells at a relatively low average price therefor directly affecting the profit levels in return. (Emeraldinsight, 2010) 2. Factor Conditions As of 2011, Chilean vineyards have been facing shortage of filed workers as most employees are migrating to construction, agriculture director Santa Rita is quoted saying “between 15% and 20% fewer workers now than two years ago” Working in vineyards is not a preferable profession to the locals anymore as they end up working eight hours more just to get the minim wage. (MecrcoPress, 2011) This means finding field workers for the vineyards will prove difficult unless the company is prepared to pay the minimum wage. 2.1 The unemployment rates in general...
Words: 3401 - Pages: 14
...factors and non-key or general use factors. Skilled human resource, infrastructure and capital resources are the key factors which significantly cause businesses to gain competitive advantage in a particular industry. Moreover, knowledge resources, raw material, unskilled labour force are the non-key factors. Last reported number of total labour force in Chile is 8,037,177 (Trading economies (2013). Nevertheless, skills, abilities and cost of the labour force are factors which significantly affect to development of competitive advantage (REF). Education systems in Chile are not stronger as other developed countries in the world. Nevertheless, it has achieved major improvements in recent years due to the improvements of government funding (4.2% from GDP). Word bank figures (2012) indicate that 49.1% of Chilean labour force is with secondary education and 25.2% are with tertiary education. Moreover, literacy level of aged between 15-24 years olds has increased to 99% (UNISEF, 2013). Chile can be identified as a high income country (World Bank, 2013) and its labour costs of Chile ranks XX which is fairly higher than the other countries in the region. In addition, unemployment rate is 5.7%. Level of infrastructure is strong in Chile is vital to development of Chilean wine industry. World Bank indicators (2013) demonstrate strong railway (, air transport (97433 registered carrier departures) and road systems ( in Chile. Moreover, access to fresh water is raked in XX due to positive weather...
Words: 1884 - Pages: 8
...Field Study – Chilean Wine Industry Chile country analysis 1. Country Profile: i. Population: 16,634,603. About 90% of them are classified as white people and mestizos. ii. Currency: Chilean Peso (CLP). Current spot rate: 0.001924 USD/CLP iii. GDP: Its estimate GDP for 2013 is $285.703 billion (38th in the world ranking). It had been growing constantly since 1997 until 2009 (global crisis). Adjusting it at PPP (reflects real purchasing power) it rises to $341.914 billion (43rd in the world ranking). iv. Income distribution: Since July 2013, Chile is considered a high-income economy. The percentage of Chileans beyond the poverty line was only 11.5% back in 2009. In addition, 64% of the population benefits from government welfare programs, which include poor people and those in risk of becoming poor. Nevertheless, the income distribution is still far from being equal, as shown by the GINI Index of 0.503 (2011). This index hasn’t varied much for the past 20 years. v. Approach to International Trade: Since early decades after independence, Chile has always had active involvement in international affairs. Consistent economic policies since the 1980’s have contributed to a steady economic growth, much of it thanks to its international trade. It currently has the highest degree of economic freedom in South America (7th in the world). In the past 15 years Chile has also signed free trade agreements with more than 10 countries (including Japan,...
Words: 1518 - Pages: 7
...Part One: The Chile Wine Industry The Chilean wine industry has experienced various transformations over the past 30 years – its quality revolution led by the complete technological renovation during the 1980s, the export boom of the 1990s, and the new terror developments during the 2000 decade. This transformation has allowed a new generation of talented viticulturists and winemakers to capitalize on Chile’s viticultural paradise and to produce World Class Wines of unique character and personality. Chile is the world’s eighth largest wine producer and the fifth largest exporter, reaching a market share of 8% by volume of the global international wine market at the close of 2010. However, and most importantly, Chile exports 70% of its wine production, making it the world’s most globalized wine industry, with great flexibility, innovation and a long-term commitment to quality and service. With 150 destination countries and 1.5 billion consumers for each year, Chilean wines are positioned as the country’s most emblematic and best known world ambassador. In the late 1970s and early 1980s, Chileans adopted advanced technology and invested in new machinery for optimizing the winemaking process in the field. The winemaker offered an innovative higher-quality product that was conducive to the development of new wine varieties. Later producers also perfected their wine cellars and invested in better labels and packing, such as boxes, bottles and cartons, that were more attractive to...
Words: 1518 - Pages: 7
...1. (a) Because the Chilean wine industry, as a whole, has achieved a good reputation as being a “value for money” or a low cost alternative to more traditional, old-world wines (subsequently positioned at the low end of the fine-wine cost range), the country-of-origin effect has made it difficult for smaller, boutique wineries, such as MontGras, from being able to fully control its own market position and produce and sell higher-quality wines at premium prices. However, although the country-of-origin effect has a large influence on shaping consumers’ general perceptions on wines from Chile, MontGras can use the effect to differentiate and reposition its brand in order to control its own market position. Moreover, as stated in the case, consumption of high-quality wine brands is steadily increasing, while the consumption of more traditional lower quality brands has significantly fallen (6). The perception of Chilean wine being a low-price alternative was developed by the increase in exports of bulk wines with competition based on price. This exports in bulk strategy, which led to the perception or country-of-origin effect does not align with MontGras’ goal to produce and export high quality wines and not compete against the larger Chilean wineries. Therefore, the country-of-origin effect also allows MontGras’ the opportunity to differentiate its brand identity based on exporting higher quality wines at premium prices. The implementation of a differentiation product strategy...
Words: 1177 - Pages: 5
...position, as opposed to being dominated 7by the country-of-origin effect, and be perceived as a “Chilean Wine”? Changing the overall image of its companies wines are added to its market positioning strategy. Even though the branding as a Chilean Wine is easily applied onto MontGras, there are many factors in its control which can make sure that the company dominates the market by having a bigger share as it wants to. MontGras though being smaller than some Chilean wineries, it has been able to stand out due to its interest in high quality wines. The company wants to establish itself as the ‘low price yet high quality’ provider of wines. This is directly related to the seeds, the soil and the production methods. The company was able to affirm that its resources are on par with other high class wineries in one way or the other. Fortunately, studies also show an increase in the number of consumers for the higher quality wines (Reserva) and a minor decline in the demand for the lesser quality (Varietal) wines. The marketing has to be different for every region. Most people with very little information about wines conveniently relate price with quality. Chilean wines thereby being priced lower than other brands were inevitably being considered not so superior in quality. Since that is not the case, MontGras is trying to change its current reputation. It wants to emphasise on its higher end wines such as the Reservas and the Ninquen to show that they don’t not lack in the quality aspect...
Words: 1001 - Pages: 5
...nMontGras A Wine of Chile 1. A. Marketing strategy * MontGras became a successful story only through their marketing strategy. It took a determined path of exporting to the top rated wine importers in the world. * Through heavily exporting to U.K and U.S, MontGras segmented and exposed to some of the top wine consumers in the world * MontGras has been exporting 50% of their wines to U.K, which is strategically a worth move according to the rate of Chilean wines that are being exported to different countries. It’s worth noting that U.K is not in the top ten lists of wine production in the world but they are in number one in importing wine. * U.S is a strategic market for wine consumption and importation but U.S also produce large amount of wine followed by France and European countries. Moreover, it expensive to distribute wines in the U.S market. Therefore, MontGras decision of exporting 4% volume of wine to U.S is economically a fair deal. * In terms of marketing budget, MontGras had spend high price for marketing in Ireland but it only sold 42,000 cases but in U.K they spend $5000 lesser than Ireland but sold almost 117,000 cases, which is 75,000 more cases sold. * Therefore, MontGras marketing strategy is flawlessly a well suitable strategy to reach, segment and brand to the main wine consumers. B. MontGras Actually positioned in an attractive segment * They have been working towards reaching consumers under their own...
Words: 935 - Pages: 4
...components. IMC is therefore not just a concept relating to consistency or synergy—it is also a strategic process (Van Zanten & Bruwer 2002a). This is in particular the case of when and how IMC manifests itself at the wine region level, in which case the integration of all the marketing communication efforts of the wine region in order to achieve a strong brand identity is of the utmost importance. The Coonawarra wine region (Geographical Indication) is located in the South East corner of South Australia and is famed for its unique terra rossa soil and bold-flavoured red wines, in particular Cabernet Sauvignon. About 5,000 hectares of vineyards comprise the Coonawarra grapegrowing area. The region currently boasts 16 operating (production-type) wineries and 22 cellar door sales facilities. Around 700 people (full-time equivalent) are employed in the vineyards, wineries and cellar door facilities. The region produces on average about three and a half million cases of wine per annum. A significant portion of Coonawarra wine COMMUNICATIONS INTERNAL INTRA-REGIONAL unplanned messages product & service messages ) initiated by planning group ( planned messages ( planning group ) CONFIRM SAY DO community support, unsought local media support, industry and government body support workshops and seminars, liaison...
Words: 4870 - Pages: 20
...102 JULY–AUGUST 2003 > VOL 18 NO 4 > WINE INDUSTRY JOURNAL M A R K E T I N G Rob van Zanten, Johan Bruwer and Karen Ronning FUNDAMENTALLY, Integrated Marketing Communications (IMC) refers to the process of integrating and coordinating the various communication elements commonly known as the ‘promotional mix’. The promotional mix is usually considered to consist of advertising, sales promotion, personal selling and public relations, although some marketers may add other elements such as publicity, direct marketing or sponsorship as major components. IMC is therefore not just a concept relating to consistency or synergy—it is also a strategic process (Van Zanten & Bruwer 2002a). This is in particular the case of when and how IMC manifests itself at the wine region level, in which case the integration of all the marketing communication efforts of the wine region in order to achieve a strong brand identity is of the utmost importance. The Coonawarra wine region (Geographical Indication) is located in the South East corner of South Australia and is famed for its unique terra rossa soil and bold-flavoured red wines, in particular Cabernet Sauvignon. About 5,000 hectares of vineyards comprise the Coonawarra grapegrowing area. The region currently boasts 16 operating (production- type) wineries and 22 cellar door sales facilities. Around 700 people (full-time equivalent) are employed in the vineyards, wineries and cellar door facilities. The region produces on...
Words: 4812 - Pages: 20
...ROUND TABLE: PREMIUM WINE INDUSTRY (LUXURY & LIFESTYLE) IN ASIA * Vintage Club * Online business (subscription) * Private consumers * Corporate (gifts, meetings) * Import directly from France, no intermediaries * Old wine company * Advice to collectors * Private customers 1. Specificity of the Asian market vs Europe * Cognac: people in Asia drink cognac with water, sprite. Do you like to have style or do you like to have sales? * Singapore wine market: 90s started climbing, mainly because students from 70s came back from abroad with new trends; French lifestyle (wine and food). * Singapore sales are driven by promotions and brands. Brands for import wines are still important, more than old world. * Time of transport from vineyard to Singapore is 2 months. * Taxes/duties: 48% china, 0% HK, $88/lt Singapore +GST * France: 25y start buying wines more regularly. Singapore: wines purchase for social representation, gifts. * Everybody knows in France about wine but they don’t care about technicalities. Only know basic characteristics of a good wine, know how to differenciate. In Asia people are more interested. * China for C&T: Hard market. Office in Shanghai, network of distributors is huge, each has a network of 1mm clients. Set up selected distributors that work closely with the brand (control network). Chilean wine is perceived as good value for money, good quality. * Segmentation...
Words: 419 - Pages: 2
...The wine produced in Chile were used to be made for religious purposes. It has now been changed to be enjoyed with a meal or with a friend. When the Spaniards came in 1551, a Spanish officer succeeded in making wine located 500 kilometers North of Santiago. In 1979, more that 400 years later, Miguel Torres Arrived in Chile. He brought with him new technology to improve the Chilean wine. Miguel brought with him a machine that transformed the verification process. The weather in Chile has the perfect conditions to growing healthy vines. Chile has the Atacama Desert on the north. They have the Andes mountains on the east, that bring the cool breeze from the snow. The pacific ocean on the west brings the cool breeze from the ocean. Antarctica...
Words: 404 - Pages: 2
...문예송 2010-10415 Principles of Accounting Individual Report Wine Industry Vina Concha y Toro (Chile) History of Chile Wine and Concha y Toro The Chile wine industry has enjoyed immense success and growth on the past two decades. The quality of Chile wine brands are at par with the most famous brands from the Old World countries and has been able to secure international prestige. Wine making began from the late 16th century by the Spanish conquistadors and missionaries. Despite the political connection to the Spanish, Chile wine is historically influenced by the Bordeaux French wine which started in the late 19th century with many wealthy Chile wine makers importing Bordeaux grapes such as Cabernet Sauvignon, Merlot, Malbec, Carmenere, and Cabernet Franc to plant in the ideal valleys of Chile. These species of grapes were rare and are considered the “lost” species of grapes from Bordeaux due to having been imported before the phylloxera (blight) epidemic which ravaged and destroyed Bordeaux vineyards in the late 19th century. The ruined wine industry in the late 19th century also prompted many French wine makers to travel to South America bringing their experience and accumulated traditional techniques. This was the second tide of Chile wine history where currently famous firms were established by the wealthy wine makers of Chile such as Vina Errazuriz by Don Maximiano, Ochagavia Wines by Don Silvestre Ochagavia Echazarreta and Concha y Toro by Don Melchor de Santiago in the...
Words: 1550 - Pages: 7
...Butramjevs Contents Trend Comparison of Indicators - Chile 3 Chile Unemployment 3 Chile Inflation Rate 4 Export, Import and Balance of Trade 4 Government Budget Indicators and Government Debt to GDP 5 CPI and PPI 6 Specifics of the Country 7 Misbalance in the Economy 7 The Crisis of 1982 8 Investing in Chile 8 Future Economic Development 9 Trend Comparison of Indicators - Chile Chile is one of Latin America´s fastest growing economies, mostly due to rise in exports. Big chunk of Chile`s GDP contributes to mining (copper and other materials) 15.2% which is increasing with every year, thus; increasing the GDP. Second largest GDP by sector is business services which make 13% followed by manufacturing industries 11%. Values in Real GDP chart are adjusted for inflation and because of that, its Real GDP will appear lower as Nominal GDP. During the period from 1998 to 2005, Real GDP is higher than Nominal GDP which is an indicator of deflation. During 1999, Chile, like most of Latin America, faced a one-year downturn. Its domestic economy underwent a minor recession due to negative impact of the Asian crisis which triggered the crisis in Chile’s private sectors. This downside is reflected in the Nominal GDP. Another downfall of both Nominal and Real GDP are seen in 2009. During this time Chile suffered economical downfall which was caused by Global Financial Crisis. Chile Unemployment Unemployed persons are defined as those who are not currently...
Words: 3067 - Pages: 13
...the development of the global wine market. How do the macro environments (political, legal/regulatory, cultural, and economic) influence the ability of the wine industry to grow within a given country? . There have been many factors that have led to the growth in the global economy. Some drivers that have been discussed in this course so far are: peace following WWII, the global support of GATT & the WTO, along with major improvements in information technologies and communications. But as the world revolutionized so did world trade and the global wine industry. Innovations where born, and communication between countries became easier which streamlined the distribution process a global market for the wine industry began. The demand for wine also increased worldwide as World War II came to a close. We learned in Chapter 1 that global commerce thrives during times of peace. An increase in the demand for wine during the postwar era coupled with new innovations that enabled wine to travel further distance without going bad, allowed “New World” producers to step up and compete with “Old World” traditional wine makers. This in turn caused new regulations and “standards” (of which we learned about in chapter 2) in order to protect their own domestic wine industry. As discussed on page 37 in Chapter 2 of our text, trade barriers exist to protect players amongst an industry and to encourage development of that industry domestically. While there were...
Words: 2835 - Pages: 12
...(2012) * GNI per capita PPP: 21,310 PPP dollars (2012) * Major Natural Resources: copper, timber, iron ore, nitrates, precious metals, molybdenum, hydropower * What major products are exported and to which countries? * Export- Agricultural, Mining and Industrial goods. (U.S, Japan, China and others) * What are the major imports and from which countries? * Import- Petroleum oils, refined & crude and Cars. (US, China, Argentina…) * Member of what economic integration organizations: Andean Community (CAN), Asia-Pacific Economic Cooperation (APEC) and Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL) * Name of the currency: Chilean Peso * Is it freely exchanged? The Chilean peso is freely exchanged among several countries. It is a good opportunity for U.S companies to export in Chile because it has the best economic stability in Latin American, the country’s Free Trade Agreement (FTA) and Chile’s mining and agricultural...
Words: 1536 - Pages: 7
