Chile - Agricultural SectorChile - Agricultural Sector
Chile is a reliable trade partner of the United States. With solid political institutions, a stable macroeconomic environment, and well-functioning financial markets.
Overview
Chile has adopted a commercial policy to open and diversify markets for its agricultural and food products, with a special focus in the Chinese market. Chile is a part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) although Chilean Congressional approval is pending.
Chile is among the top ten agricultural exporters in the world with main agricultural exports including wine, fresh fruit, dairy, meat, and fishery products. The agriculture industry—including agricultural-related products—is responsible for 28 percent of Chile’s overall trade, 11 percent of its total gross domestic product, and 10 percent of the country’s national work force. Chile is the world’s largest exporter of fresh table grapes, blueberries, prunes, dehydrated apples, and frozen salmon fillets.
Chile has a modern and developed food processing industry that has annual sales of $34 billion and that grow by 6.6 percent annually. (Source: FAS-Exporter guide)
Healthy foods, gourmet foods, prepared foods, and ready-to-eat meals show huge potential for growth in the Chilean market. Chilean consumers have an increasing concern for health related issues while the food processing industry continues to adapt to a restrictive nutritional labeling law, higher labor costs, and sophisticated consumers, all of which present challenges, but also opportunities for U.S. high value-added products and ingredients such as natural additives, preservatives, thickeners, and sweeteners.
Chilean companies seek to reformulate and develop new products that do not need to carry a warning label from the nutritional labeling law. Therefore, companies seek for new ingredients, which can be healthier substitutes (for example sweeteners instead of sugar) or innovations on how to produce tasteful products within the same price range, but with healthier ingredients.
Chilean Processed Food Industry
The demand for U.S. “consumer oriented” agricultural products in Chile has increased together with income. In 2018, Chile imported $3.7 billion worth of consumer-oriented agricultural products from the world and $669 million from the United States, a 5.6 percent increase over 2017, and the highest level of exports recorded so far.
There are three main reasons for Chilean companies to import food ingredients: (1) If the products are not available domestically through local production (2) if it is cheaper to import rather than buy domestically; or (3) if imported products offer a higher quality than those available in the domestic market.
Food processing companies are constantly looking for innovative ingredients for production of healthier foods especially those for consumers with food intolerances such as lactose and gluten-free products. Chilean consumers have an increasing concern for health related issues while the food processing industry continues to adapt to the nutritional labeling law, higher labor costs, and sophisticated consumers, all of which present challenges, but also opportunities for U.S. high value-added products and ingredients such as natural additives, preservatives, thickeners and sweeteners.
New ingredients are used in the production of healthier products especially those adapted to consumers with food intolerances, such as lactose and gluten free products. Alongside there is a rising demand for organic foods.
Chilean companies seek to reformulate and develop new products that do not need to carry a warning label from the nutritional labeling law. Therefore, companies seek for ingredients and healthier substitutes (for example sweeteners instead of sugar) or innovations on how to produce tasteful products within the same price range, but with healthier ingredients.
For further information on food processing ingredients please see GAIN report.
Food Retail Market
Chile’s food retail sales reached $17.2 billion in 2018, a five percent increase over 2017. The Chilean retail sector is composed of a mix of large supermarkets, mid-sized grocery stores, convenience stores, gas station markets and thousands of smaller independent neighborhood mom-and-pop shops.
There are five main retail groups in Chile: Falabella, Cencosud, Walmart Chile, Ripley and La Polar. Falabella and Cencosud have department stores, home centers and supermarket/ hypermarkets; Chile has a modern, highly competitive supermarket sector.
According to the National Institute of Statistics (INE), in 2018, 1,371 stores, including hypermarkets, supermarkets and other small food retail stores with a minimum of three checkouts composed the Chilean food retail sector and 50 percent of them are located in the Metropolitan region. Supermarkets have the largest market share for Chile’s food sales, holding 48.2% of total food sales, mid-sized supermarkets hold 12.1 percent of total sells and Grocery stores have a market share of 21.2 percent.
Chile is becoming increasingly urbanized, not only in the Metropolitan region but also in other provincial or second-tier cities. The retail industry has been adjusting to this trend especially grocery retailing that has been adopting a convenience model through chained convenience stores, forecourt retailers and smaller supermarkets.
Chilean consumers purchasing habits have changed and retailers have been adapting to that change. Traditionally, Chileans used to be loyal to brands and focused on quality, disregarding price. However, Chilean consumers have become increasingly informed, comparing and looking for promotions and variety before making a purchasing decision and searching for lower prices even if this means not purchasing all their groceries from one store. The most important factor for consumers’ purchase decision is store location, followed by price, and promotional activity.
The Chilean retail industry has been adapting to the online world both with electronic and mobile commerce. The challenges in the retail industry are mainly focused on developing new platforms that respond to consumers’ demands for more personalized products and services, offer a greater assortment of products for customers looking for healthy and functional food and beverage products, and improve customer service.
For more information on the retail market see GAIN report.
Hotel, Restaurant and Tourist Industry
Hotels, restaurants and institutions seek to reduce operational costs by buying processed foods and ready-made meals, which minimize labor costs. Consumers’ healthy lifestyle trends have changed not only restaurant and hotel operators, but also the institutional food services. Healthy foods are a category of products that show huge potential for growth in the Chilean market, there is increasing concern for health issues among consumers and food processing companies that are trying to adapt to health regulations and consumers’ demand. Another category of products with high growth potential is gourmet food and beverages.
Hotels, currently the biggest investment sector of the HRI market, will continue to thrive and this will provide export opportunities for U.S. producers.
For further information on food services please see HRI GAIN report.
Business Recommendations and Import Procedures
Conduct marketing research, not only in terms of typical market research, but also of appropriate business contacts and Chilean import regulations in order to successfully seize market opportunities and overcome market challenges.
Participate in and/or attend Chilean trade shows, particularly the USA pavilion organized at the USDA-endorsed Espacio Food & Service show, Chile’s major food show, and the second most important food industry fair in the region after Brazil. The show is recognized as the most important annual meeting in the Chilean food industry and will provide you the opportunity to connect with over 28,000 international buyers.
A trade show can serve to contact local distributors/sales agents, buyers, and businesspersons, and to become familiar with local competition. In the case of new-to-market companies, be prepared to provide support for in-store and media promotions to familiarize consumers with your products. Another option is state/regionally-organized trade missions.
Adjust your product to local preferences, if required prepare promotional material in Spanish and assign a specific budget to promote your product locally.
Conduct background checks before entering into contractual agreements with potential importers.
Develop an appropriate marketing campaign that informs the consumer the origin of the brand. Slogans and marketing materials should be understood in Spanish. Be mindful of using slang. The word “American” coupled with a U.S. flag can be favorably used in this market.
Work closely with U.S. Department of Agriculture Foreigh Agriculture Service (FAS) Santiago Office to promote U.S. food products on Sabor USA Chile Facebook and Instagram to strengthen the U.S. food lovers’ community on social media.
While regulations are relatively transparent, changes are not widely advertised. Hence, the exporter or his/her representative must monitor the official journal (Diario Oficial), where periodical changes are published. One can also visit the websites of the Ministry of Agriculture and the Ministry of Health to seek further updates. Spanish labeling is mandatory for all products.
The Ministry of Health published on June 26, 2015 the implementing regulation to Law 20,606 that regulates the labeling of the nutritional compositions of food products, Decree 13, 2015. The Decree aims at targeting food products for consumption by children under 14 years of age if they exceed specified limits of sodium, sugar, energy (calories) and saturated fats. Food products that exceed the limits will are required to use black stop signs that state “high in salt, sugar, energy or saturated fat” according to its nutritional composition. One stop sign must be used for each of the critical nutrients in excess of the prescribed limits. Therefore, some products may have up to four stop signs.
Opportunities
Overview
Chile has adopted a commercial policy to open and diversify markets for its agricultural and food products, with a special focus in the Chinese market. Chile is a part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) although Chilean Congressional approval is pending.
Chile is among the top ten agricultural exporters in the world with main agricultural exports including wine, fresh fruit, dairy, meat, and fishery products. The agriculture industry—including agricultural-related products—is responsible for 28 percent of Chile’s overall trade, 11 percent of its total gross domestic product, and 10 percent of the country’s national work force. Chile is the world’s largest exporter of fresh table grapes, blueberries, prunes, dehydrated apples, and frozen salmon fillets.
Chile has a modern and developed food processing industry that has annual sales of $34 billion and that grow by 6.6 percent annually. (Source: FAS-Exporter guide)
Healthy foods, gourmet foods, prepared foods, and ready-to-eat meals show huge potential for growth in the Chilean market. Chilean consumers have an increasing concern for health related issues while the food processing industry continues to adapt to a restrictive nutritional labeling law, higher labor costs, and sophisticated consumers, all of which present challenges, but also opportunities for U.S. high value-added products and ingredients such as natural additives, preservatives, thickeners, and sweeteners.
Chilean companies seek to reformulate and develop new products that do not need to carry a warning label from the nutritional labeling law. Therefore, companies seek for new ingredients, which can be healthier substitutes (for example sweeteners instead of sugar) or innovations on how to produce tasteful products within the same price range, but with healthier ingredients.
Chilean Processed Food Industry
The demand for U.S. “consumer oriented” agricultural products in Chile has increased together with income. In 2018, Chile imported $3.7 billion worth of consumer-oriented agricultural products from the world and $669 million from the United States, a 5.6 percent increase over 2017, and the highest level of exports recorded so far.
There are three main reasons for Chilean companies to import food ingredients: (1) If the products are not available domestically through local production (2) if it is cheaper to import rather than buy domestically; or (3) if imported products offer a higher quality than those available in the domestic market.
Food processing companies are constantly looking for innovative ingredients for production of healthier foods especially those for consumers with food intolerances such as lactose and gluten-free products. Chilean consumers have an increasing concern for health related issues while the food processing industry continues to adapt to the nutritional labeling law, higher labor costs, and sophisticated consumers, all of which present challenges, but also opportunities for U.S. high value-added products and ingredients such as natural additives, preservatives, thickeners and sweeteners.
New ingredients are used in the production of healthier products especially those adapted to consumers with food intolerances, such as lactose and gluten free products. Alongside there is a rising demand for organic foods.
Chilean companies seek to reformulate and develop new products that do not need to carry a warning label from the nutritional labeling law. Therefore, companies seek for ingredients and healthier substitutes (for example sweeteners instead of sugar) or innovations on how to produce tasteful products within the same price range, but with healthier ingredients.
For further information on food processing ingredients please see GAIN report.
Food Retail Market
Chile’s food retail sales reached $17.2 billion in 2018, a five percent increase over 2017. The Chilean retail sector is composed of a mix of large supermarkets, mid-sized grocery stores, convenience stores, gas station markets and thousands of smaller independent neighborhood mom-and-pop shops.
There are five main retail groups in Chile: Falabella, Cencosud, Walmart Chile, Ripley and La Polar. Falabella and Cencosud have department stores, home centers and supermarket/ hypermarkets; Chile has a modern, highly competitive supermarket sector.
According to the National Institute of Statistics (INE), in 2018, 1,371 stores, including hypermarkets, supermarkets and other small food retail stores with a minimum of three checkouts composed the Chilean food retail sector and 50 percent of them are located in the Metropolitan region. Supermarkets have the largest market share for Chile’s food sales, holding 48.2% of total food sales, mid-sized supermarkets hold 12.1 percent of total sells and Grocery stores have a market share of 21.2 percent.
Chile is becoming increasingly urbanized, not only in the Metropolitan region but also in other provincial or second-tier cities. The retail industry has been adjusting to this trend especially grocery retailing that has been adopting a convenience model through chained convenience stores, forecourt retailers and smaller supermarkets.
Chilean consumers purchasing habits have changed and retailers have been adapting to that change. Traditionally, Chileans used to be loyal to brands and focused on quality, disregarding price. However, Chilean consumers have become increasingly informed, comparing and looking for promotions and variety before making a purchasing decision and searching for lower prices even if this means not purchasing all their groceries from one store. The most important factor for consumers’ purchase decision is store location, followed by price, and promotional activity.
The Chilean retail industry has been adapting to the online world both with electronic and mobile commerce. The challenges in the retail industry are mainly focused on developing new platforms that respond to consumers’ demands for more personalized products and services, offer a greater assortment of products for customers looking for healthy and functional food and beverage products, and improve customer service.
For more information on the retail market see GAIN report.
Hotel, Restaurant and Tourist Industry
Hotels, restaurants and institutions seek to reduce operational costs by buying processed foods and ready-made meals, which minimize labor costs. Consumers’ healthy lifestyle trends have changed not only restaurant and hotel operators, but also the institutional food services. Healthy foods are a category of products that show huge potential for growth in the Chilean market, there is increasing concern for health issues among consumers and food processing companies that are trying to adapt to health regulations and consumers’ demand. Another category of products with high growth potential is gourmet food and beverages.
Hotels, currently the biggest investment sector of the HRI market, will continue to thrive and this will provide export opportunities for U.S. producers.
For further information on food services please see HRI GAIN report.
Business Recommendations and Import Procedures
Conduct marketing research, not only in terms of typical market research, but also of appropriate business contacts and Chilean import regulations in order to successfully seize market opportunities and overcome market challenges.
Participate in and/or attend Chilean trade shows, particularly the USA pavilion organized at the USDA-endorsed Espacio Food & Service show, Chile’s major food show, and the second most important food industry fair in the region after Brazil. The show is recognized as the most important annual meeting in the Chilean food industry and will provide you the opportunity to connect with over 28,000 international buyers.
A trade show can serve to contact local distributors/sales agents, buyers, and businesspersons, and to become familiar with local competition. In the case of new-to-market companies, be prepared to provide support for in-store and media promotions to familiarize consumers with your products. Another option is state/regionally-organized trade missions.
Adjust your product to local preferences, if required prepare promotional material in Spanish and assign a specific budget to promote your product locally.
Conduct background checks before entering into contractual agreements with potential importers.
Develop an appropriate marketing campaign that informs the consumer the origin of the brand. Slogans and marketing materials should be understood in Spanish. Be mindful of using slang. The word “American” coupled with a U.S. flag can be favorably used in this market.
Work closely with U.S. Department of Agriculture Foreigh Agriculture Service (FAS) Santiago Office to promote U.S. food products on Sabor USA Chile Facebook and Instagram to strengthen the U.S. food lovers’ community on social media.
While regulations are relatively transparent, changes are not widely advertised. Hence, the exporter or his/her representative must monitor the official journal (Diario Oficial), where periodical changes are published. One can also visit the websites of the Ministry of Agriculture and the Ministry of Health to seek further updates. Spanish labeling is mandatory for all products.
The Ministry of Health published on June 26, 2015 the implementing regulation to Law 20,606 that regulates the labeling of the nutritional compositions of food products, Decree 13, 2015. The Decree aims at targeting food products for consumption by children under 14 years of age if they exceed specified limits of sodium, sugar, energy (calories) and saturated fats. Food products that exceed the limits will are required to use black stop signs that state “high in salt, sugar, energy or saturated fat” according to its nutritional composition. One stop sign must be used for each of the critical nutrients in excess of the prescribed limits. Therefore, some products may have up to four stop signs.
Opportunities
- Poultry / Pork / Beef
- Feeds & Fodders
- Dairy Products (especially cheeses)
- Wheat
- Food Ingredients
- Condiments & Sauces
- Prepared Food and Frozen Meals
- Craft Beer and Spirits
- Snack Foods/Cereals/Value Added Products
- Fruits Juices (Orange, Grapefruit)
- Natural/Organic Food
- Tree Nuts
- Chocolate & Cocoa Products
- Wood Panels and Products