Strength in Exports – Trading Chilean Wines Taking the Global Stage
MERCOSUR’s countries have strengthened their economies since the FTA’s (Free Trade Agreement) formation. Currently, MERCOSUR includes Argentina, Bolivia, Chile, Peru, Colombia, Guyana, Ecuador, and Suriname. Meanwhile, Mexico and New Zealand have the observer status. This further resulted in more trade opportunities between various South American Countries. It’s amazing to find out that each country has its own export. For instance, Ecuador has bananas, while Colombia has flowers. In this article, we will be focusing on trading Chilean wines worldwide.
Chile, like many Latin American countries, has recently exemplified a rapid, constant economic growth throughout the decades. Its robust and differentiated economy is now home to low trade barriers which opened doors to many investors and businessmen. This nation’s core export is wine, yet it’s still considered underrated by many. With evolving market trends and consumer behavior spanning on a global scale, this notion is bound to change.
Benefits of 21st Century Consumerism for the Trading of Chilean Wines
Capitalism has been the prevailing economic dogma at present, despite the fact that Communist minorities still exist. The shift from communism to capitalism led to an immense increase in consumerism, especially in Latin America. In countries like Colombia, Mexico, and Peru, the poor get higher odds of being richer today compared to the previous decade. Such system gave rise to the formation of a large middle class. On the other hand, the rich are also getting wealthier, perhaps even at a quicker rate due to easier access to more lucrative opportunities.
The 21st century is an age which many consider as the “millennial era”. These people are most likely children of the previous Generation X. The millennial age is the domination of consumerist beliefs, ideas, and practices. Competition is present in all aspects of life, and even more cutthroat than ever. It may be a sickening reality to some, but it has benefits.
Corporations seemingly put strong pressure to millennials, as only the ones with the best skills and qualifications are chosen. However, companies need to match their expectations with attractive and generous compensation. As a result, millennials usually get jobs that pay well.
Due to providing easy access to disposable income, consumerism has implanted customers a “buy quickly” mentality. All of us will always find a reason to spend our money. If possible, we would spend so much on celebrations and gatherings due to our social nature. A good celebration is never without a toast from quality wines.
Why Are Chilean Wines Special?
Chile has some of the most ideal locations and weather conditions for producing wine. Major producers usually possess plantations with a land of at least 4,270 km in length and 200 km wide. Chilean vines savor the constant breeze from both seawater and the Andes mountains. The grapes still receive a plentiful amount of sunlight. However, the temperature is just right, not too much that it dries the crops out.
Many connoisseurs classify the taste of Chilean wines as somewhere between Californian and Bordeaux varieties. This is due to the El Niño and La Niña effect which is present in the Bordeaux region. Chilean wines have an earthy, peppery, and dark red Cabernet Sauvignon tones with flavors of blackcurrant, raspberries, olives, and smoke.
These wines have recently won prestigious awards and recognitions, including the Berlin Wine Tasting event of 2004. During this occasion, 36 European experts gave Viñedo Chadwick 2000 and Sena 2001 first and second place in a blind tasting. A similar instance happened in Brazil during the same year, with five out of the top seven wines being Chilean Cabernet Sauvignons.
These competitions display the budding fame of these wines reflected with a stable rise in their value and name. Due to the wines’ versatility in taste, exporters can pick between a luxury quality Cabernet Sauvignon and an elastic but more inferior New World Chardonnay. This allows the trader for more flexibility when determining a target market.
Trading Chilean Wines: Economic Trends
According to a recent survey, the countries consuming wine the most are France, the US, Germany, and Italy. In addition, studies show that wine has benefits for well-being, as long as people drink it moderately. The modern trend of being health conscious drives many from incorporating wine into their everyday lives, from food recipes to mingling events.
The rising Mexican middle-class comprises of young, smart millennials. They are willing to find effective ways in scoring high-cost benefit for their purchases. This means they have the ability to access a much wider selection of products through distribution platforms and online shops. In essence, they prefer exporters who deliver goods from door to door, rather than shop sellers.
If you are trading Chilean wines with this method, you could reduce your overheads tremendously. The availability of social media allows for a low-cost, yet high-frequency marketing approach. Theoretically, Chilean wines lean towards having a good cost-benefit ratio which is essential for future price adjustments.
Wine also has an astonishingly decent price to volume ratio which makes trading Chilean wines more interesting than ever. Among all alcohol products, wine is the safest to market, due to lesser regulations. As stated earlier, people love to celebrate, yet many are still concerned about their health. Compared to say, European or Californian wines which are costly, Chilean wines’ prices are more competitive. All of these factors lead consumers into buying more Chilean wines than other varieties.
Chile and Mexico: Countries Open to Promoting Imports and Exports
Chile’s low barriers to trade put it on the list of the top ten trading economies in the world. According to World Economic Forum’s Enabling Trade Report of 2014, Chile sets an import tariff 3.5%. The nation also has the lowest protective trading measures worldwide.
Meanwhile, Mexico is one of the trading giants in Latin America and even the world. It ranks 16th internationally on market access due to offering mainstream imports free of duty. Similar to Chile, it also utilizes low protectionism means as part of its economic strategy. Other Latin American countries account for 14.1% of Chile’s exports compared to Europe’s 14.9%. Comparing these statistics with GDP per capita for both unions of states, one can truly appreciate the benefits of trading within MERCOSUR.
Fruitful Opportunities Await When Trading Chilean Wines
Trading between other nations can be a sustainable way of doing business in Latin America. Chilean wines provide great trade advantages due to its voluminous range of prices and qualities. It’s also feasible to market these products to health-conscious individuals which even furthers its scope. When starting a business venture, it’s wise to invest in a promising industry as trends will lay down pathways to its success.
Latin American economies are emerging and business opportunities are multiplying. Which is why he Biz Latin Hub group has opened offices to extend its assistance. With skilled teams of lawyers and accountants, Biz Latin Hub offers a range of services. These include company formation, local support as to trading between Latin American countries, and more.