Chile makes a $ move

Wines & Vines, Oct, 1995 by Larry Walker

Last Year, U.S. consumers lapped up about 5.3 million gallons of wine from Chile, according to figures in the July Statistical Issue of Wines & Vines. That placed Chile as the third leading importer into the U.S. In dollar value, that amounted to just under $40 million, placing them fifth in that important category. And on a dollar per gallon basis, Chilean wine averaged $7.52, in contrast to the average value of $14.68 for a gallon of imported wine, a poor ninth in the field, even lagging Greece by almost a buck.

By contrast, one of Chile's arch-rivals for the consumer wine dollars was Australia. Australia shipped over 2 million fewer gallons, but took home almost $10 million more in dollars, with an average per gallon price of $15.21.

This is a situation that doesn't particularly appeal to Chilean exporters, and steps are being taken to correct it.

Brown-Forman is gearing up its Carmen Vineyards brand to move into the super-premium category with a Gold Reserve Cabernet Sauvignon.

I met with Alvaro Espinoza, the wine-maker of Carmen at Stars Restaurant in San Francisco, exactly the kind of spot that Brown-Forman would like to put the new upscale Carmen Cabernet on the wine list. Espinoza was on a whirlwind tour of California - including a visit to Brown-Forman's Fetzer property - with Joseph Della Santina, the Northern California fine wine specialist for the B-F Wine Brands Company.

"I know that Chile can produce wines that can compete with the best wines in the world. This Gold Reserve will express what the vines can do," Espinoza said.

He said he wanted especially to show what Chilean terroir was capable of producing. Espinoza has cut way back on irrigation - which many critics have cited as a major problem for Chile. "We used to irrigate by the calendar, just like they do in the orchards. If the day on the calendar said irrigate, we would irrigate. Now we only irrigate if it is really necessary. We use soil probes to check moisture content."

Espinoza said the yield on the single vineyard reserve was only about four tons per hectare (one hectare equals 2.47 acres) a yield far below most California Cabernet vineyards.

The wine spends a year in small barriques and another year in the bottle. Production is limited, with exports going only to the U.K. (a major market for Carmen) and the U.S.

Della Santina, who works on inhouse sales, agreed that it was very important for Chile to show that wines of high quality could be produced.

"Chile has been a success at high value wines, now it's time to move it up," he said.

Espinoza said that the better wines would be coming on as new clones went into production and irrigation was cut back even more. "We are definitely looking for greater concentration in our wines."

Inspired by the success of Fetzer's organic vineyard program, Espinoza is converting to the organic method in its vineyards and has the first certified Chilean organic vineyard in production. "I know that we can go organic without risking quality," he said.

Carmen, with the blessings of Brown-Forman, is also planting Rhone varietals and Nebbiolo. Espinoza expects to be coming out soon with a Bordeaux blend and this year will make a Chardonnay-Semillon blend. Carmen is the first winery in Chile to make that popular Australian blend.

Carmen will continue to bring its "good value wines" into the U.S. at prices from $5 to $9, including a Cabernet Sauvignon, a Merlot, a Chardonnay and a Sauvignon blanc. Espinoza expects a major marketing boost related to the boycott in Europe of French wines because of the nuclear tests now going forward in the South Pacific.

Although there hasn't been much reaction in this country, there has been very strong reaction in the U.K. and northern Europe. Carmen's sales are already up 30% this year in the U.K. and Espinoza said that in the wake of the French tests, Oddbins, the huge British chain, was starting a major promotion of Chilean wines.

"I do believe that Chilean wines can break through the 'good-value' category and gain a long-term reputation as quality producers. We must compete with the best in the world," Espinoza said.

Billington Distributors, longtime importers of Chilean wine, is bringing in a new upmarket wine from the Mitjans family called Stonelake. The wines, coming into the market this fall, include a Chardonnay and a Pinot noir which will sell in the $15 to $20 range. The family has long been involved in the wine and distilled spirits business in South America. When Mitjans, through its Valdivieso, S.A. company, decided to export to the U.S., the family realized that the lower end of the Chilean wine market was completely saturated.

The grapes are from the Lontue Valley, about 200 kilometers south of Santiago. These are vineyards influenced by cold downdrafts of air from the Andes range and vineyards in warmer coastal regions, embracing a wide range of micro-climates.

The winemaker for Stonelake is Luis Simian, a Chilean winemaker who has worked for 20 years in Australia. California's Paul Hobbs is a consultant for the wines. The Chardonnay is 100% barrel fermented in Francois Freres French oak, with 50% of the barrels new. It is held sur lie for nine months with weekly batonage. The Pinot noir is fermented in open top containers and spent 11 months in Freres French oak barrels, 50% new and 50% one year old. Fining is with egg whites with coarse filtration.