Grapes are the bread and butter of the Chilean fresh fruit industry, accounting for more than 33 per cent of the country’s fruit exports.
Globally, the country is the fourth biggest producer and second largest exporter of table grapes - sending 620,000 tonnes around the world in 2003, roughly a quarter of the world’s grape exports.
More Chilean land is dedicated to grape production than any other fresh fruit product, around 30 per cent of the total planted area. There are five main growing areas, Atacama, Coquimbo, Valparaiso, Rancagua and Metropolitana.
In total, grape production is spread across close to 45,000 hectares throughout these regions.
The major varieties produced in Chile are Red Globe, Thompson Seedless and Crimson Seedless, as well as smaller volumes of Sugraone and Flame Seedless.
However, although many producers are now beginning to look at new varieties, such as Autumn Royal and Bonn, new varietal development is something Chile needs to put more focus on, says Matias de la Fuente, commercial director of Chiquita Chile.
“We are very good when it comes to quality and volume with grapes and we have some of the best facilities in the world, but when it comes to developing new varieties and new plants, we are nearer the bottom of the pile,” he says.
“That is something that will have to change, and it needs to be a main aim of the industry, but I think people are beginning to look at that, and I think the good growers will be the one who do it.”
Christian Carvajal, marketing manager for Europe and Asia with the Chilean Fresh Fruit Association, agrees it is something the industry can improve on. “When it comes to varietal development, we’re not as strong as New Zealand or Australia but we want to start looking at it more, and that’s something we are going to be focusing our efforts on in the near future.”
When it comes to markets for grapes, the UK is one of the biggest within Europe. “The UK is the market for grapes, as far as I’m concerned,” says Hugo Poblete, production manager with producer Sofruco.
The company has not previously exported but now sees it as a vital sector of the industry, and the UK a key market for the product.
To tap into that opportunity, Sofruco is developing grape production, which will see their capacity expand from 45ha to more than 200ha over the next five years.
Poblete says: “We made the decision to go into grapes because it wasn’t an area we covered and we wanted to diversify. The UK is an important market for grapes, but we’re not ready yet to export there.”
And Sofruco is not alone in expanding production. Chiquita Chile is also looking to boost its volumes, says de la Fuente.
“We’re increasing our production from 3.8m boxes to more than 6m, more than 50 per cent growth. We’ve just leased around 2,000ha extra to grow fruit on, with the majority being grapes.”
When it comes to varietal preference, within the UK, Thompson Seedless is top dog. The 2002/03 season saw Chile ship more than two million nine kilo boxes to the UK, followed by Crimson Seedless at 1.2m boxes. Sugraone is the third largest variety with around 320,000 boxes sent.
And market demands are changing all the time, says Juan Colombo, commercial manager with grape exporter Subsole. “We’re seeing increasing demand within the UK for red seedless, more than we expected.
“The change has been considerable and the sales of white and red are beginning to even up,” he says.
In the 1998/99 season, only 13,647 boxes of Crimson Seedless was sent to the UK, which pales in comparison with last season’s 1.2m.
Overall, Chilean grape volumes to the UK are on the rise, and that is something Carvajal expects to continue. “At the moment, we anticipate the market will continue to grow at around 10 per cent, year-on-year,” he says.
Perception of the industry is also something the association is keen to work on, Carvajal says: “We carried out a market survey that revealed that, while the overall market perception in the UK was that Chilean fruit was of high quality, there was the belief that we are not very innovative.
“That is not the case, our production methods are very advanced, but perhaps we’ve not been very effective at communicating that in the past.”
Certainly the industry has been hard at work in pushing the envelope when it comes to extending the season.
Early production in the Copiapo Valley is a significant part of the Chilean grape sector and a large number of companies are working hard to develop production in the area.
Unifrutti is one company that grows in the valley and it has been putting in significant investment. Luis Latrille, production manager, says: “To grow earlier grapes costs around $50,000 per hectare to prepare the land for planting, and around $12,000 a year to maintain it.”
This, compared with a more average cost of around $8,000 per hectare, means a significant investment for any company that is looking to grow its season.
At the moment, the bulk of the fruit into the UK market begins to arrive in January, hitting a peak around March before finishing off in May.
The majority of the early fruit is generally sent to the US market, although small volumes are sent to the UK and Europe to plug gaps in supply from South Africa.
Certainly a big concern for the Chilean industry is shipping. While costs inevitably rise from season to season, this year there has been a significant increase in prices due to the rise in oil prices.
However another issue when it comes to freight is a simple one - space, or rather the lack of it.
Carlos Bennett, commercial director with Bendel Fruit, says demand for shipping is beginning to outstrip supply. “Demand for shipping from China is on the rise so there are less ships available and less space when it comes to seafreight.”
Airfreight is too expensive an option for most products, as one producer points out, seafreight costs around two to three dollars a box, while sending fruit by air costs around three dollars a kilo.
However, seafreight is becoming trickier all the time and some companies are now considering investing in their own logistics, says Carvajal.
However, the solution may be just around the corner. Chile’s biggest fruit port, in Valparaiso, has recently hatched significant expansion plans.
Francisco Lopez, spokesman for the port, says a project was under way to increase the capacity of the port from around 4.6 million tonnes to nearly 20mt by 2010, with further expansion planned to more than 40mt by the year 2045.
The free trade agreement signed with the European Union has also had an impact on the Chilean industry, and while barriers have been pulled down, competition has risen, making things tough for many producers.
Bennett says: “The free trade agreement has increased competition. We saw a large amount of fruit sent to Europe last year, with a lot of Chilean companies competing with each other for a share of the market.”
And while favourable exchange rates have exacerbated the problem, Chilean producers need to be careful, says Bennett: “We must take care, because if we send too much fruit, the prices will fall.”
It is not just internal competition the Chileans are facing either, says Jaime Rodriguez, agronomist with Unifrutti. “Competition is getting tougher overall, and we need to start opening up new markets.”
He says there is significant competition beginning to emerge from neighbouring South American countries, such as Argentina, Peru and Brazil, which are all sending greater volumes to the European market. “Peru particularly could be a potential threat in the future in Europe,” he warns.
Increasing uncertainty over the use of sulphur pads is also a concern for Chilean producers, as Subsole’s Colombo points out: “Sulphur pads are a very necessary and useful tool.”
Carlos Loyola, commercial manager with exporters Rucaray, says it is a problem for the industry: “We know Europe is not so happy with the technology, but we’re still waiting for a final decision to be made.
“We still use the technology to transport grapes to the US, but we’re looking for alternatives for he EU market. However, at the moment there’s no solution.”
Chiquita’s de la Fuente agrees it’s an important issue: “Norway has postponed its ban, so we are ok for this season and that’s good news. But countries around the world are now nervous about the pads, so it’s something we have to do, we have to look for alternatives.”
When it comes to promotion, Chile has always been heavily active within the UK and grapes form a strong part of the overall picture, says Carvajal.
“We commissioned a market audit to see whether the promotional work we were doing was proving worthwhile. It suggested we needed to carry on focusing our promotions to both the trade and at the point of sale, but not on a more consumer advertising level.”
He says the CFFA will continue to promote within supermarkets, carrying out tastings and on-pack offers as well as focusing on ensuring Chilean grapes are prominent on the shelf.
Overall, the Chilean grape industry is doing well, with increased production and an industry that is forever striving to meet market requirements, be they on safety, quality or volumes.
The country has been the first to introduce its own Good Agricultural Practices programme, ChileGAP, which has recently been recognised as equivalent to EurepGAP, and is now in the process of communicating that effectively to Chilean producers.
It is that kind of development that sets Chile apart as a producer of fresh fruit.
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