Doing Business : Chile’s Wines: They’re Nice for the Price : At least that’s what the foreign critics are saying. And that sentiment has helped Chile rise to the fourth place in exports to the United States.
Winemaker Ernesto Jiusan has spent many months in California and France, absorbing the techniques and tastes that result in world-class wines.
Here in Panquehue, he uses modern grape-crushing machinery from France, stainless steel fermentation tanks from Spain, oak barrels from France and the United States. He has the added advantage of working in central Chile, an ideal place for great grapes.
As a result, the wines Jiusan makes for the Errazuriz winery are being noticed in the Unites States and Europe. Very nice for the price, the wine critics are saying.
And that, in general, is why Chilean wine exports are enjoying an unprecedented boom.
According to preliminary and unofficial figures available here, Chile had climbed to fourth place among exporters of wine to the United States through the first 10 months of last year, ranking only behind Italy, France and Germany. Chilean figures show shipments to the American market surging by 62% during that period compared with the year before.
(Officials at San Francisco’s Wine Institute confirm that the popularly priced Chilean wines have been “coming on strong” in the United States, and that if sparkling and dessert varieties are excluded, they probably will wind up in fourth place among 1990 wine imports.)
Hugh Johnson’s Pocket Wine Book, an authoritative guide, says in its 1991 edition that Chile’s wine potential “has only really started to be explored in the past five years. Chilean Cabernets lead the way with original flavors that will one day lead to worldwide renown. Other varieties now show equal promise.”
Quality winemaking goes back more than a century in Chile. Many of the country’s top wineries, like Errazuriz, were founded in the 1870s and 1880s.
Flanked by Andean foothills rising from the Aconcagua Valley north of Santiago, Errazuriz vineyards fan out from an old, brick-walled bodega (wine shop) whose high wooden doors creak with tradition.
But since the early 1980s, Errazuriz and many other Chilean wineries have modernized their equipment and adopted new technologies developed in California and France. Chilean oenologists, or winemakers, have reworked their formulas to please foreign palates.
Major Chilean wineries, such as Concha y Toro and Santa Rita, account for most of Chile’s growth on the U.S. market with inexpensive wines that are widely recognized as bargain values. More recently, some smaller Chilean producers have found success in the United States with better but still reasonably priced wines.
Errazuriz, which began pushing overseas sales in 1985, now exports 85% to 90% of its production. In 1989, it formed a joint venture with the Franciscan Vineyards of California’s Napa Valley.
Jiusan, 42, said the purpose of the joint venture is to further perfect Errazuriz wines and increase international sales. He is production manager and winemaker.
He has spent two harvest seasons at the Franciscan vineyard, “working with their oenologists, trying to catch on to their methods, and tasting their wines to learn what qualities are being produced and consumed in the United States,” he said.
Franciscan winemakers also come to Chile to work with Jiusan. “We talk about what improvements we can make, what changes we can make, what better techniques we can use,” he said.
Errazuriz exports a premium-grade Cabernet Sauvignon called Don Maximiano that Jiusan said is made in the French style. A new label, Caliterra, aims at the U.S. market with both red and white varietals that are more in the California style, he said.
Under the joint venture with Franciscan, Errazuriz has built a second wine-making plant south of Santiago near Curico. Eduardo Chadwick, general manager of Errazuriz and a descendant of the winery’s founder, said exports from both plants will be about 150,000 cases this year, up from 110,000 in 1990 and 25,000 cases in 1987.
Speaking in his Santiago office, Chadwick predicted that both Errazuriz and Chilean wine exports in general will continue to grow steadily.
“I think we have very big possibilities because we continue offering quality wine at a price that nobody else is doing,” he said.
Chilean exports of bottled wine have risen from little more than half a million cases in 1988 to more than 3 million cases last year. About one-third of the 1990 exports were to the United States.
Chilean export income from bottled wine in 1990 was estimated at $44 million. The Chilean newspaper El Mercurio said export revenues could reach $75 million in 1992, when Chile “is projected to pass Germany as the No. 3 American supplier.”
For some Chilean producers, big volume is not the goal. “There will be a need for top quality Chilean wines, but of course at lower volumes,” said Chadwick. He said the Errazuriz Don Maximiano label, named after the winery’s founder, is intended to meet that demand.
Another Chilean wine produced for that upscale export market is Los Vascos, now partly owned by the famous French winery Chateau Lafite-Rothschild. And a new boutique winery named Discovery Wine is successfully exporting high-quality wines under its Montes and Villa Montes labels to the United States and Britain.
Douglas Murray, an Anglo-Chilean wine exporter, is one of Discovery’s four owners and its export manager. He said the winery began exporting in mid-1989 and shipped 34,000 cases in 1990.
“This year, we expect to reach 50,000 cases,” Murray said. But he said he wants to limit production to 60,000 cases, “aiming at better quality more and more, and getting better prices.”
The idea for starting Discovery Wines came from partner Aurelio Montes, who previously has been chief winemaker for two larger wineries, Undurraga and San Pedro. At San Pedro, Montes made a premium wine, Castillo de Molina, that was successfully exported to France in 1985.
Murray was export manager for San Pedro when he and Montes organized the four-way partnership.
“He talked me into it, and we both went to see the other two,” Murray recalled. “It had become evident in the past few years that prices for better wines were becoming much more interesting.”
He said that while big Chilean wineries can offer good value for price, they are more interested in volume than in the top-quality export market.
“It is very hard to aim and stay aimed at that market in the States because you get pressure from marketers to lower prices, lower standards, lower quality,” Murray said.
In the past, lesser booms for Chilean wine exports ended when some exporters shipped notably inferior wines, attempting to capitalize on Chile’s blossoming reputation--and spoiling it in the process. That is a danger today, warned winemaker Jiusan of Errazuriz.
“Any false step, any error, can hurt us all,” he said.