The country of origine in and of itself can be an element of value to consumers. Today, we’ll talk about that with Guillermo Ariztía, director of Chile’s pavilion at the 2015 Expo here in Milan. Good evening Guillermo. Good evening Gabriele.
Chile’s a country that has recently created a strong reputation for itself in the food and beverage world. Can you give us some details about that? Yes, Chile has been developing it’s food and beverage area from an agro-industrial point of view for the past twenty or so years. The first thing to understand about Chile is its geography. It’s a long and thin country in the south of the world, and it’s very variable. From the North to the South there are more than 2,500 miles (4,000 km). In the North you have the driest desert in the world, in the center there’s a mediterranean-like climate similar to Italy’s, and in the South there are the glaciers of Patagonia, and forests with a humid and rainy climate. This grand diversity over 2,500 miles of distance bears a large variety of fruits that are then exported around the world, some of which are considered main commodities in diverse markets. For example, today, Chile is recognized as a major producer of many of the top ten exported product in the world, like apples, nuts, and seeds. Chile is known for having natural phytosanitary barriers which ensure that the agricultural characteristics of products of the country are kept relatively pure. This makes fruit of higher quality with less of a need to fertilize, which is something the world recognizes us for. These products are very different though. Do you think that there are any characteristics that separate Chilean products from others’ around the world? There are, in fact some symbolic products, For example, now if you ask in Europe, according to the market, if you ask here in Italy or in the United States to think about Chile, the first thing that comes to mind is wine, sometimes salmon, and other times fruit which are clearly the products with the highest demand in today’s market. If you take Italy, often imported fruit is Chilean. Chilean wine also has a rather strong presence in Europe and the U.K. This is mainly due to the free trade agreements that Chile has worked hard at in the recent years. We’ve established a free trade agreement with Europe, the United States, Asia, and various other countries around the world, which is something that sets us apart from other South American countries. In turn, Chile is considered one of the more stable countries in South America which is something that reassures foreign investments. For example, we have “country brands,” in this case for salmon which is known for being produced in very few countries in the world: Norway, Japan, Scotland, Chile, and maybe a few others. Chile is considered one of the biggest producers of salmon in the world. This is an example of a Chilean country brand. Concha Y Toro is a Chilean country brand for wine, which is known throughout the world. Another example here in Italy are our choritos, or muscles. Good. Having been said, are there any other countries that Chile considers “so called” competition? Of course, Chile has direct competitors in every category. Taking wine for example, amongst the emerging countries, There are Chile, Argentina, South Africa, and Australia. Even in the case of fresh fruit we have some big competitors, for example, our biggest one in Europe is Greece. It like this with a lot of our products. What’s important is to stress what makes of different from the others. That’s where the topic of the phytosanitary barriers comes into play. They, for example, affect the quality of our fruit, which is something we bank on to penetrate the market. The country’s strategy, the strategy of the exchange rate is fundamental. So that each product category has its own competitors? Exactly. Each category has different competitors, and in turn, it’s impossible to define Chile by only one product. To penetrate the exportation market, Chile exports around 80 billion dollars, 16 billion of which relate to the agricultural industry, or the agricultural industry; 40% of that total is due to copper which Chile is probably best known for abroad. But the Chilean agricultural industry is also very strong, though I don’t mean the whole sector, rather a series of specific categories. It could mean animal farming, fresh fruit, services, etc. so a series of categories in which Chile participates differently in each one. Chilean products are now sold in many countries, in some they’ve been around for a long time, while in others their presence is newer; is there a strategy that Chile uses in order to enter into new international markets and make a name for itself? Chile’s strategy has changed in the last few years. Since the beginning, so ten years ago, the focus of our exportation that been towards stable countries, we’re talking about places like the US, UK, and other European countries, which is where Chile has consolidated its exports that are now why strong. The strategy of the last four to five years, however, has been different, it’s been to differentiate this concentration which has mostly lead us to Asia: Japan, China, and Korea. They’ve become new destinations for various categories of products that we had already had. They’re not countries that make up the “stable country” category, however they do contribute to our diversification. For Chile, since we’re dependent on the dollar, the concept of exchange rate is very important and directly influences our exportation. This is why we have a tendency to prefer countries that are relatively stable with respect to exchange rates, which is something we depend on, let’s say we’re in direct correlation with it. Are there any well tested promotion strategies for Chilean products? Are there any strategies that you’ve implemented with particular success? This question is very much linked to what I’ve previously said: from an internal point of view, we’re tightening the relationship between public and private. For example, the pavilion is actually a mix of public and private. It’s not 100% public. The financing is both private and public, also the events that take place inside, and so this also applies to promoting exports. In Chile’s case, we count a lot on “gremios”, which are what you, in Italy, call union, which is where a private group gets together and gets support from the government. From the public standpoint, in the public sector, we’re trying to diversify the offer through a diversification of the concentration of products. Right now, the exportation of our products are in the hand of only a few companies. Therefor in the last few years, the public sector has been focusing on promoting SMEs (small and medium-sized enterprises), with the goal of eliminating this concentration through the various gourmet products that we offer to the rest of the world. These are the two strategies that we use: one private one with unions or gremios and one public one through SMEs; that’s what the Chilean government is doing. Before you spoke about country brands. Country brands are very big goals for a nation, one like Made in Italy, are there promotional strategies dedicated to the Chilean country brand? In Chile, we call them ”marca sectoriales.” They’re sectoral brands that are directed towards various distinct areas or product categories. For example, to promote Chilean cuisine, we use “Chile À La Carte,” as in Chile’s menu. It’s like this for other product categories as well. There are various sectoral brands that together promote the development of the country brand. The brand is rather consolidated in certain fields such as wine or salmon, or cellulose which is one of Chile’s principle exports to the world. Chile, for example, is one the the few countries in the world, if not, the only to not have deforestation but rather re-forestation, which is super typical of the country. Chile is the only country which, even though it produces wood and cellulose, differently from the rest of the world, is actually increases its forest coverage, which is very interesting. The way in which the government supports this is through sectoral brands and unions, through the Ministry of Economy, Agriculture, and Foreign Relations that, for example, is directly correlated to this pavilion. From an organizational standpoint, are there any specific structures that are formally dedicated to the promotion of products abroad? Yes, specifically there’s an appointed structure, the Trade Office, which Chile has in various counties abroad to which Chile exports, including Italy, whose headquartered in Milan. In Chile’s case it’s called “Pro Chile”, just like in Peru’s case it’s called “Pro Peru,” and the pattern continues for other South American countries. They are trade offices that are in strategic locations around the world that are designed to promote exportation of a given country. it can come to this institution for financial aid and travel aid, it can serve as a place to hold meetings in the country and is a place that has commercial contacts and works closely with the Ministry of Agriculture and the Ministry of Economy which also provide funds and promote brands, for example, even sometimes with private institutions. Good. There is always some kind of relationship between foreign markets and domestic markets, with the former affecting the later. Are there ay examples of products that were successful abroad and as such created some problems internally like a price increase or scarse in-country availability? Are there any examples of this in Chile or is it that foreign demand doesn’t really affect internal demand? This obviously happens with products that are relatively new in the market, and not for products well established in the world’s markets, For example, for wine, salmon, copper, and fresh fruit, this doesn’t happen. Instead, it happens for products whose demand may naturally rise very rapidly or maybe because the product has some kind of special quality which has happened a couple of times in Chile. I’ll give you two examples: the first one, is cherries. Around two years ago, in Asia, their rate of consumption spiked, this was a natural demand that didn’t exist before, a similar thing happened with blue berries and other fruit. This caused a spike in prices since it wasn’t foreseeable. This is an example of natural demand; there are others whose issues lie with technology or natural resources. One example of such are the “locos” or abalones (ormers). We have some here in the pavilion’s restaurant This is an expensive product but it’s unfortunately a product whose production is very hard. Abalones are carnivorous mollusks, who difficultly reproduce and we still haven’t found a way to facilitate this reproduction in and efficient manner in such a way that the price drops and that it can become a mass export. This high price can be linked to the technology, or lack there of and can maybe be trace also to a sort or over exploitation of natural resources. Thank you very much Guillermo, Thank you, it’s been a pleasure.
