Wines of Chile often employs Wine Intelligence to provide an external review of our industry and provide insights on the different markets of interest around the world. On August 25, members of the Chilean wine industry gathered in Santiago to hear the results of the latest study: Wines of Chile in Japan, China, and Brazil.
Because Chile aims to expand its markets in Asia (with a particular focus on China and Japan) and Brazil, WoC asked Wine Intelligence to prepare a report on aspects of those wine markets and consumers in order to best prepare the proper approach for bringing Chilean wine to those consumers. The study also examines the “brand health” of Chilean wine and explores its opportunities for future growth.
Wine Intelligence research managers Juan Park (Senior RM) and Jenny Li (RM) spoke to an enthusiastic public about opportunities and strategies for the Chilean wine industry to effectively expand into these three attractive markets.
The three-country study reveals an in-depth analysis and comparison of seven factors: Socio-Economic, the Wine Market, Chile as a Country, Chilean Wine, Objectives, Challenges, and Actions. Another key area that must be addressed is the target market “maturity” with respect to wine consumption. Of the three markets discussed, Japan is considered a “Mature Market,” which means it has “strong historical growth that is trailing off.” China and Brazil are “Emerging Markets” in which “wine is experiencing rapid growth from a relatively low base.”
In all three cases reviewed, the lion’s share of the wines consumed are domestic, followed to differing degrees by other producing countries, among which Chile fares quite well:
In Brazil wine consumption is dominated by the local offer (77%), with Chile in second place at 5%. Chinese wine drinkers show even more national brand loyalty (87%), followed by France, Australia, Italy, and Chile. In the Japanese market, however, which has more seasoned consumers, domestic wines still led the way, but with a much lower percentage (36%), followed by France, Italy, and Chile.
Convincing consumers to expand their options requires an understanding of cultural factors in order to address aspects of interest in that particular area. For example, while Japanese consumers consider the origin of a wine and recommendations by friends and family to be primary influences in their decision making, they are little influenced by awards and recommendations by professional critics or guides, so smart marketing will spend more time educating consumers about Chilean terroir than informing them about medals earned. Chinese consumers, on the other hand, appreciate the health benefits of wine and appreciate a winery’s history, tradition, and family ties, and learn more about wine through social media than through magazines or television ads. Brazilian consumers, however, cited information received from television and cooking magazines as being very important, and just slightly behind recommendations. In each instance, knowing consumer habits, interests, and what factors influence their wine purchasing decisions allows wineries to prepare effective marketing messages.
Comparing the Japanese, Chinese, and Brazilian Markets for Chilean Wine:
The seminar closed with a cross-cultural comparison of the major factors consumers take into consideration when purchasing wine.
The Japanese market is revealed to be a powerful but aging market for Chilean wine, but it is mature and has little room for expansion in terms of volume. The Japanese have empathy for the Chilean people and appreciate the value for money they receive when buying Chilean wine. The challenge for the future, then, is to convince consumers to look beyond the value wines and into the premium segment.
China’s middle class and cities is growing quickly, and consumers are open to trying new products, although they respond particularly well to known brand names. This presents opportunities to reach new consumers through education and effective communication that addresses appropriate cultural factors. As an emerging market, there is room for growth in both value and volume.
Brazil is another emerging market, but one with which Chile already has an established relationship and mutual cultural values are shared and/or understood. Brazil’s middle class is expanding and the economic situation is increasingly stable, which can be seen in a growing and enthusiastic number of wine consumers. Chile’s goal in this market is to maintain its current consumers and attract new ones, particularly through attractive, down-to-earth communication.
Wines of Chile members who are signed in can download the full report from the Studies & Reports / Seminars (click here) section.