This category has remained resilient in a lagging momentum in wine exports, and Concha y Toro seeks to strengthen its reach to distributors, restaurants, and wine collectors in the region.
Amid the harsh moment the wine industry is going through, with national wine exports showing a 20% drop in both volumes and value, Viña Concha y Toro is focusing on categories remaining resilient, redoubling its strategy in the high-end segments, and launching a new campaign in Asia to enter this regional’s luxury market with force.
The “Jewels of the New World by Concha y Toro” strategy, presented to the market at the end of May, seeks to redefine the company’s approach in Asia by strengthening the arrival of ultra-premium wines from our vineyards in Chile, Argentina, and the United States (US). At the end of the first half of 2023, the Asian region accounted for 6.6% of the company’s sales.
Although Concha y Toro represents 30% of Chile’s wine shipments, in recent years, it has carried out several initiatives to strengthen its presence in Asia, such as expanding the supply of high-end bottles, which range in price from US$ 50 to US$ 250 in this region and will help to better face the weak moment at the industry level.
“It has also been a difficult year for the wine industry, with a contraction in volumes and a drop in consumption, which put us in a very challenging situation at the industry level. But the luxury wine segment has continued to grow, and that is where we see a wonderful opportunity,” said Cristián López, corporate export manager for Asia. “To that end, Asia is central to this strategic objective of developing our fine wine brands,” he added.
In 2022, half of Viña Concha y Toro’s revenues were accounted for by premium and above wines, while 14% of the top line came from super and ultra-premium brands. In Asia, sales of super and ultra-premium brands grew 38% over the past year.
López said that with this new concept in Asia, the company is targeting the luxury wine market, focusing on China, South Korea, Japan, Thailand, and Singapore. It is also looking to expand into the United Arab Emirates, where there is a segment of high-net-worth consumers.
“With this focus, we want to grow in value, more than in volumes, and for that, distribution is key, and above all, to define the public we want to reach,” he said. “Today, we insert luxury wines within this investment category focused on premiumization, and where we believe we can have a better return is in Asia,” he added.
With Jewels of the New World, our winery will include a select collection of fine wine brands to enhance relationships with distributors, restaurants, and wine collectors in the Asian market. Among its wines are Alea Fina and Bonterra Biodynamics from its Bonterra winery (USA); Carmín de Peumo, Gravas, Concha y Toro Master Edition, Marques de Casa Concha Heritage, Amelia and Terrunyo (Chile); and Trivento Eolo (Argentina).
To strengthen its strategy in high-end wines, Concha y Toro created the luxury division a few months ago, led by Rodrigo Jackson, to focus exclusively on this segment with high growth potential. A market expected to grow 6% by 2031.
“We conducted a study in the Asian market to understand what consumers appreciated about Concha y Toro and what we were missing to maximize our sales,” said Rodrigo Jackson, Concha y Toro’s Luxury Brands Division manager. “Although our figures are good, we want to increase them and thus generate greater commitment and value with customers, Concha y Toro, and our strategic partners who see an enormous growth potential in this,” he said.
Jackson says the key to outlining our luxury strategy is to raise awareness of the company’s wine portfolio in Asia.
“We are looking for points of connection with the consumer because per capita consumption in Asia is quite premium, given that what they buy is high priced,” he commented. “That’s why we want to make a union with customers, not only to show our wines but to give them a complete experience, from knowing the terroir and the history behind this selection of fine wines that we have as a company,” he said.
In this context, Concha y Toro also seeks to have a greater connection with the niche of fine wine collectors. “These are investors who can invest thousands of dollars. Some buy a few bottles, but some directly acquire a particular wine’s consignments, hoping it will have an attractive return in a few years,” he said.
“We aim to reach this market (collectors) through distributors in these countries with the customer base deployed. We also know some collectors directly who placed purchase orders at the event where we launched this strategy. However, we must attract and strengthen the distribution chain in these destinations to make it easier for us to reach those customers who collect luxury wines,” he said.