Chile 2010

This is part I of this feature, quality moves in Chile towards the year 2010

go to part II

Talking to dozens of winemakers on a trip to New Zealand last year, a common topic of discussion was Sauvignon Blanc and what a double-edged sword it has become for the Kiwi industry. Sure, being known as "the place that does brilliant Sauvignon" is a coup that gives a small wine country enormous global visibility, but it is also a potential glass ceiling that could stifle other aspects of the New Zealand industry.

Chile, on the other hand, has a much more broad-based wine industry. The signature grape, Carménère, has some cachet, but a wide range of white and red varieties and styles shares equal billing. However, Chile does have its own double-edged sword to play with, and that is consumer perception of the entire country's wine output. Mention Chilean wine to just about any wine drinker, from occasional weekend tippler to informed student of the grape, and their first reaction will almost certainly include phrases like "good value" or "good quality for the price".

Whilst these sentiments are positive, there is an implication that Chile is, by default, a cheap wine producer. Just as many consumers of New Zealand Sauvignon Blanc will be blissfully unaware of the country's Chardonnay, Pinot Gris or Pinot Noir, most Chilean wine drinkers are unaware that £20, or even £10 bottlings exist. For most, 'cheap and cheerful' is the be-all and end-all of Chilean wine.

The challenge for Chile

The challenge for Chile is complex: it must consolidate its reputation as provider of large volumes of high quality wines at competitive prices, whilst at the same time moving the industry, and consumer perceptions, onto a new place.

For long-term viability, Chile needs higher quality, higher price points, and it needs its wines to occupy other sectors of the collective wine consciousness. These problems are not unique to Chile perhaps, but they are quite starkly evident.

Australia has carved itself a reputation for fine wines over the past decade. It has successfully moved public perception on from the 'jug wine' days of the 1970s and early 80s, whilst managing to maintain huge volumes of sales for its lower-priced wines. But that has come at a price of course, and the industry is still somewhat schizophrenic: Australia enjoys an enviable reputation at both the low- and ultra-premium ends, but some perceive a gap in the middle. That might stop today's consumers of big selling brands from sticking with Australia if they move on to more expensive bottles. Chile must avoid this 'doughnut effect' and create a vertical market that covers all price points.

investment for quality: Gillmore boutique winery, Tabotinaja

In terms of quality wine, Chile will depend on export for the foreseeable future. Of the 7.89 million hectolitres produced in 2005, 4.21 million was exported. Along with the USA and Brazil, the UK remains the most important market. Domestically, annual per capita consumption is around 16 litres (actually slightly up on mid-90s figures against a pattern of falling global consumption), but the majority of that is very low-priced wine indeed.

One sign of a growing interest in fine wines is the El Mundo del Vino chain of very smart wine shops in Santiago and other major cities. Browsing the shelves of a large, beautifully arranged store in Santiago's posh El Golf district (left), the 'icon wines' of Chile were all present and correct, as were high-end wines from Europe, Australia and the USA. But when I spoke to the shop manager he confirmed that his big customers were visiting Brazilians, Americans and Japanese, but regular local clients were still relatively thin on the ground.

Quality moves

On an individual basis, many Chilean producers are pursuing a quality path, and striving after world-class wines.

Some of these are through collaborations like the joint venture between Concha y Toro and Mouton-Rothschild, Almaviva, and some are quality- focused Chilean houses like Errazuriz and Montes, that offer ultra-premium priced bottlings to compete with the best in the world.

One interesting case in point is the modern winery of Via, near Talca. I last visited this winery in 2003, when it was deeply involved in a joint venture to make wines for Michel Laroche. It also had a burgeoning portfolio of clients for whom it made wine on contract, including Tesco own label. With vineyards across Chile's regions, Via's whole philosophy was to be an anonymous, client-led, totally flexible 'wine machine' that would make good wines at the right price for anyone who'd pay the going rate.

Returning late in 2006 and it's all change at Via. The Laroche relationship has ended, founder and former supremo Jorge Cordeche has taken a back seat (though still a shareholder) and winemaker Julian Grubb has been replaced by the well-travelled Californian Ed Flaherty (in fact, Flaherty, pictured below, has just moved on again to Viña Tarapacá). Though the Tesco own-label range is still an important backbone for the winery, Flaherty and the new management team have been reengineering and repositioning Via as a quality estate winery, with a number of single vineyard bottlings bearing Flaherty's signature. A programme of grafting and replanting has attempted to play to the strengths of their terroirs.

As an outsider who has lived and worked in Chile for many years, Flaherty is aware of the challenges facing the industry: "The five year plan is mostly about the exchange rate," he says, "but I see more of an obvious split between industrial bulk production and super-premiums - both with the same objective of increasing margins." That might be the Holy Grail for all wine regions, but Flaherty sees part of the problem being uniquely Chilean: "There's a tendency in Chile to try to do everything. A typical family-owned company wants to produce the whole gamut of wines and styles, and wants to sell to all sectors. That leads to certain inefficiencies."

Flaherty also thinks a more focused and concerted approach is needed on a national level: "When the Australians decide on a 30 year plan for the industry, or to focus on pushing a new grape variety, everyone gets on board. They either prosper together, or they fail together. Chileans are much more conservative: they are much more suspicious of change, and of each other."

Mob rule

There does seem to be a new understanding amongst Chile's producers that they must work together to raise standards and improve the world image of 'brand Chile'.

There is no better example of this than a project called Vinos de Chile 2010 centred on the Maule region. Maule is the huge, thumping heart of the Chilean industry, responsible for 50 per cent of all wine production. Maule has historically been Chile's boiler-room, with massive plantings of the lacklustre País grape being used to churn out cheap wines. Though much of the País has now gone, low-end wine for bulk export has remained the region's stock in trade.

There are shining examples of aspirational, quality-conscious wineries across Maule of course, from the Chilean family-owned Valdivieso whose ever-improving range is moving steadily up the ladder of both quality and price led by Kiwi winemaker Brett Jackson (right), to the Kendall-Jackson-owned Calina, whose wines are ultra modern and very impressive, to slick new projects like Espiritu de Chile, a brand new label aimed specifically at the UK and German markets in a joint venture between Chile's Aresti, who will grow the grapes and make the wines, and Germany's Racke, who will market, sell and distribute them.

But Vinos de Chile 2010 is a government sponsored initiative that is quietly but steadily encouraging and facilitating improvements in all aspects of the Maule industry (with spin-offs for all of Chile), from viticulture and winemaking, to investment and marketing.

What this means in practical terms is a spectrum of projects and initiatives.

These range from funding research into the aromas of the Carménère grape at the University of Talca, to exchange programmes with winemakers from France, South Africa, the USA and elsewhere, to arranging and funding visits to the area by potential overseas investors. On my trip I met a representative of Bordeaux's Bernard Magrez (owner of Pape-Clément amongst many other estates), there on 'pre-investment study', funded by Vinos de Chile 2010.

Step up, Carménère

The story of the ancient Bordeaux variety Carménère, and how it was rediscovered thriving in Chilean vineyards, is now well known. Carménère is still the name on many Chilean lips as a potential 'golden ticket', and indeed the promotion of Carménère wines through the annual Concurso Carménère in Maule is an integral part of Vinos de Chile 2010's strategy. Clearly, the position of Shiraz in Australia, Sauvignon Blanc in New Zealand, not to mention Malbec in Argentina, is the role model. Many Chileans expressed a belief that their neighbour across the Andes was a sleeping giant, who might just become the dominant force in South American wine if Chile does not get its collective act together.

As one of the judges for last year's Concurso Carménère, I tasted my way through 50-odd examples. Criticised for an element of herbaceousness that can verge on the aggressively green, the pyrazine character of some Carménère (ironically also found in New Zealand Sauvignon Blanc where it sits more happily) is being managed by better understanding of the canopy, yields and irrigation, but was still evident in a few wines. At its best it adds an intriguing menthol, herby note; at its worst it is unpleasantly vegetal.

But the overall quality of Carménère was very good indeed, perhaps being best of all in the section of Carménère-dominant blends. When blended with other Bordeaux varieties and occasionally Syrah, the slightly one-dimensional tendency of the grape can be smoothed, fattened or spiced into a more harmonious wine, yet still retaining its distinctive Carménère signature. Indeed Chile remains a bastion of single varietal wines, yet the future for the best reds might well be in blends, with Carménère providing a decisive point of difference.

Onwards and upwards

The arrival in 1979 of Spanish superstar Miguel Torres sparked the modern Chilean wine industry: it is hard to imagine that Torres brought stainless steel fermentation tanks to the country for the very first time. The quality Chilean industry is still finding its feet in many ways. Plantings have moved from flood-irrigated vines on the valley floor, trained on high pergolas, to lower trellises on sloping sites, with drip irrigation. The Primavera vineyard of Valdivieso illustrates this perfectly, with fruit from the flood irrigated bottom section of the vineyard (right) being used in cheaper wines, and fruit from drip-irrigated high slopes, recently cleared of mountain rubble, designated for upper-end wines. At Mont Gras, the mountain top Ninquén vineyard at over 1600 feet is a prime example of the upward movement.

And exploring of new regions goes on apace. Where once Casablanca had 'cool climate winemaking' all to itself, vineyards are creeping north and south, but also outward towards the Pacific to the west and Andes to the east in search of not only cool climatic conditions, but new and interesting soils and subsoils.

A good example is the recently planted Limarí region, some 500 kilometres north of the previous limit of viticulture. Though creeping closer to the Atacama Desert, its proximity to the ocean cools and extends the growing season. Quality names like Viña Tabali have emerged from Limarí, and stalwarts like Concha y Toro are investing heavily.

Towards 2010

Vinos de Chile 2010 has few obvious 'achievables': firm targets for plantings, production, exports or sales that can be measured in 2010 as a sign of success or failure. In that way it is unlike, for example, the Australian industry's 'Strategy 2025' that attempts to set out a series of milestone targets. Instead there is a raft of important, but less statistically defined improvement projects under way.

And perhaps that is no bad thing. When one considers how some all guns blazing programmes have backfired so spectacularly on the Australian industry with over-production, squeezed margins and an unhealthy wine surplus, then setting softer targets that allow for more organic growth and development makes a lot of sense.

go to part II, estate profiles and tasting notes.