I spent a year working abroad in Chile through a post graduate fellowship where I didn’t speak the local language (Chileans don’t exactly speak Spanish; they speak slang) and where I didn’t know a single soul in the entire country. But because of my lack of knowledge of this faraway “isla,” I was in the best position to explore. And explore I did. Traveling to Casablanca (wine country), Atacama (the desert), Patagonia (the south), and then some, I fell passionately in love with the beauty of this country and with the people. Concha y Toro was my go-to wine when I brought a bottle to a friend’s house for dinner. I remember it having such strong brand recognition locally and then went wine tasting there with all of my friends who came to visit, and even my family (see photo of my sister holding up a grape over the vineyards). Made in Chile matters because when you do visit this place, you fall hard. But before you do, it doesn’t resonate as a place where most people think of to visit or a place people understand. It’s one of the most unique landscapes in the world with desert to the north, pacific ocean to the left, mountains to the right, and Patagonia to the south. There’s a sentimental value that I extract from Chilean wines, and in fact, I do find them to be the best value for my money when I shop here in the states. It’s interesting because I think Chile is better positioned to do a bottoms up strategy given that it’s so hard to visit, but that if you do get the chance to visit, you come back with a willingness to go premium after understanding the country and the beauty it offers.
In college, I once did a blindfold water test with my friends. We tasted Fiji, Dasani, and tap water (aka NJ’s finest). We all swore that we could identify Fiji at the very least. We all failed. Some even opted for tap as being the finest. So why do we pay for such premiums? Is it packaging? Is it that Fiji comes from “the exotic faraway fiji islands?” Is is that we know Dasani isn’t sourced from a mountain but just a Coca Cola brand? The bottom line is that branding matters. The French will always be the Rolls Royce of wines (champagne is only champagne when it’s from France after all). Chile’s attempt at competing from the premier brands doesn’t make sense. Ralph Lauren is a good analogy in my opinion. The brand appealed to the mass market first with the polo symbol on every man’s polo shirt. From there, the brand has elevated itself to black label and purple label/collection. But ask the LVMH or Kering brands and they will never consider Ralph Lauren “luxury” but sportswear. It doesn’t matter that they share a similar price point on several items…it’s American made, not a French or Italian luxury house. Chile’s finest sauvignon blanc can’t compete next to Montrachet when few people have even been exposed to the country. By showing they’re good at mass market appeal through top down strategy, like Ralph Lauren and his polo shirt with 97% margins, Concha y Toro can become everyone’s go-to brand and then elevate.
