Chile

We got some updated numbers on Chilean wine sales recently.  Depending on the news source, Chile is either the fourth or fifth largest wine exporter in the world behind Spain, Italy and France but still ahead of the United States.  They are also either the third or fourth largest importer into this country behind France and Italy and perhaps Australia.  So how did they rise to such heights when they only control 4.6% of the worldwide wine market?

The Chilean wine industry was started by Spanish settlers in the 16th century.  It was a thoroughly domestic market they served for centuries before American demand changed things in the 1980's and 90's.  A 180 degree turn followed when American investment from our industry leaders led to purchases of specific vineyards and wineries AND purchases of bulk wine.  20-25% of Chile's exports have been bulk wine imports to America, China and elsewhere.  So, after centuries of being a domestic-consumption wine country, Chile turned into a global player seemingly overnight.

So where do huge tanks of bulk wine go when imported by American wineries?  They are worked into California wines where, unless the label says estate bottled, only 75% of the wine in the bottle needs to be sourced from California.  Why supplement with Chilean juice?  Two reasons: The stuff is good, better than the bulk wine from California's Central Valley.  Secondly, when a label achieves mass market appeal and the sales numbers indicate a juggernaut going forward, the giant industry players will pay millions of dollars for that label.  They are, in effect, betting their future on it.  Then they need to fill those bottles as economically as they can to make their venture profitable.  Chilean wine is perfect for that purpose.