In the first half of 2024, Chile's wine industry showed signs of a modest recovery after a sharp decline in exports the previous year. According to data from Chilean customs authorities, the country's wine and grape juice export value grew by 2.1% (in USD) compared to the same period in 2023, with the volume increasing by a significant 14.1%. However, the recovery in quantity did not translate into growth in export value. Despite the increase in volume, the average price per liter fell by more than 10%, from $2.25 to $2.02 per liter, marking the lowest price point since 2017. These figures indicate that Chile is far from recovering the success levels seen in the first six months of 2022 and earlier years.
Chile's 2023 wine export data was sobering. That year, the country's wine industry suffered a major setback, with both export value and volume plummeting by nearly a quarter. This represented losses exceeding 200 million euros and a reduction of over 100 million liters. By the end of 2023, Chile’s annual wine export revenue had fallen to $1.5 billion, a stark contrast to the $2 billion level maintained during the pandemic years. Sales volume followed a similar trajectory, shrinking to less than 7 million liters, far below the standard 8 to 9 million liters of the past decade.
As of June 2024, Chile's wine export volume had slowly climbed back to around 7.3 million liters. However, this came at the cost of a significant drop in average prices, highlighting the complexity of Chile's recovery path.
Growth in Chile's wine exports in 2024 varied across different categories. A large portion of Chile's wine exports still came from non-sparkling bottled wine, accounting for 54% of total sales and even 80% of revenue. These wines generated $600 million in the first half of 2024. While volume increased by 9.8%, the value grew only by 2.6%, reflecting a 6.6% drop in unit prices, which currently hover around $3 per liter.
However, sparkling wine, which represents a much smaller share of Chile’s overall wine exports, showed notably strong growth. As global trends shift towards lighter, fresher wines (a trend already leveraged by countries like Italy), Chile’s sparkling wine export value grew by 18%, with export volume increasing by over 22% in the first half of this year. Although in terms of volume, sparkling wine makes up only a small portion compared to non-sparkling wines (1.5 million liters versus nearly 200 million liters), their higher price—around $4 per liter—generated more than $6 million in revenue.
Bulk wine, the second-largest category by volume, had a more complex performance. In the first six months of 2024, Chile exported 159 million liters of bulk wine, but with an average price of only $0.76 per liter, this category's revenue was just $120 million, far below that of bottled wine.
A standout highlight was the bag-in-box (BiB) wine category. Though still relatively small in scale, it showed strong growth. In the first half of 2024, BiB exports reached 9 million liters, generating nearly $18 million in revenue. This category saw a 12.5% increase in volume and over 30% growth in value, with the average price per liter rising by 16.4% to $1.96, positioning BiB wine prices between bulk and bottled wine.
In 2024, Chile's wine exports were distributed across 126 international markets, but the top five—China, the UK, Brazil, the US, and Japan—accounted for 55% of total revenue. A closer look at these markets reveals varying trends, with the UK emerging as a major driver of growth, while China experienced a significant setback.
In the first half of 2024, exports to China and the UK were nearly identical, both around $91 million. However, this figure represents a 14.5% increase in sales to the UK, while exports to China dropped by 18.1%. The difference in volume is also stark: exports to the UK surged by 15.6%, while those to China fell by 4.6%. The greatest challenge in the Chinese market seems to be a sharp decline in average prices, down 14.1%.
Brazil is another key market for Chilean wine, maintaining stability during this period, with exports reaching 30 million liters and generating $83 million in revenue, a slight increase of 3%. Meanwhile, the US saw similar revenue, totaling $80 million. However, given Chile's average price per liter of $2.03 compared to Brazil's $2.76 per liter, the quantity of wine exported to the US was significantly higher, nearing 40 million liters.
Japan, while slightly lagging in terms of revenue, showed impressive growth. Chile's wine exports to Japan increased by 10.7% in volume and 12.3% in value, totaling 23 million liters and $64.4 million in revenue, with an average price of $2.11 per liter. Additionally, Canada and the Netherlands emerged as major growth markets, while Mexico and Ireland remained stable. On the other hand, South Korea experienced a sharp decline.
A surprising development in 2024 was the surge in exports to Italy. Historically, Italy imported very little Chilean wine, but in the first half of 2024, Italy purchased over 7.5 million liters, marking a significant shift in trade dynamics.
Chile's wine industry demonstrated resilience in 2024, showing early growth in both volume and value after a challenging 2023. However, recovery is far from complete. The sharp decline in average prices highlights the ongoing difficulties the industry faces, particularly in maintaining profitability while increasing export volume. The rise of categories like sparkling wine and BiB shows promise, and the growing importance of markets like the UK, Japan, and Italy is becoming more evident. Nonetheless, the industry will need to navigate continued price pressure and market volatility to sustain the fragile recovery in the coming months.
Post time: Oct-15-2024