Opportunities in the Food Industry in Chile
Among Chile’s many expanding industries, one of the most successful is its food industry. Chile benefits from competitive advantages due to the country’s natural geography. The country has one of the world’s only macrozones with a Mediterranean climate which is ideal for agriculture- particularly fruit. The country’s diversity of climates, ranging from dry desert to snow-capped mountains, allows for huge diversity in Chile’s agriculture as well as the ability to stagger harvests throughout the growing season. Chile’s location in the Southern hemisphere is also an advantage for foreign investors in the North because it permits a counter-season supply to northern markets.
All of these factors have caused Chile to emerge as one of the most important stakeholders in the world food industry. The food sector currently makes up more than 10% of Chile’s GDP, and the nation has ambitious plans to be among the top 10 exporters in the global food sector by 2020. Chile is the largest exporter of dried apples, plums, prunes, grapes, blueberries, trout, and Pacific salmon, the second largest exporter of cherries, raspberries, walnuts, avocados, and Atlantic salmon, and is well known for its wines, olive oil, mineral water, and a number of other agricultural products. Chile is also tapping into more niche markets like gourmet food products, premium wines, and microbrews. By 2014, Chile’s agriculture exports reached $16,000 million and they are predicted to continue growing at a rate above 6%.
Chile is the largest supplier of fruit products from the Southern Hemisphere. With over 320,000 hectares devoted to fruit, Chilean fruit exports to the U.S. in 2014 exceeded $4,500 million. Chile’s diverse climate means that it is able to grow a variety of quality products year round, and Chile’s location means that foreign investors would benefit from counter-season products in northern markets. The fruit sector continues to grow steadily, with over 9,000 exporters and currently shipping to over 70 markets. U.S. investors have opportunities to get involved in the production of fruit for export or agribusiness, as well as the mechanized harvesting services for fruit farming. Chilean fruit is renowned worldwide for its quality and taste due to Chile’s ideal temperate, soil, and lack of agricultural irritants. Chile is even a fruit-fly free zone.
Chile is perhaps the most well-known world-wide for its quality wines. In fact, 16.9 million people across the world drink a glass of Chilean wine every day. Chileans have been making wine for over 450 years, but have only emphasized exports in the last few decades. As the world’s fourth largest supplier of wine, Chile has won several awards including Decanter World Wine Awards. Notwithstanding Chile’s ideal temperature and climate for wineries, part of the industry’s success is due to the government’s encouragement of investment by foreign entrepreneurs, Chile’s highly trained workforce, and cutting-edge technology and facilities. Chile currently dedicates 138,355 hectares of land to wine grapes and exported $1,891 million worth of wine in 2014, mainly to the U.S. Chile hopes to become the number one supplier of sustainable premium wines by the year 2020.
The Chilean meat industry is also on the rise. Chilean meat exports reached $923 million by 2013 and continue to increase steadily. Of these exports, 55% are pork, 33% poultry, and 5.7% beef. Chile’s impressive economic growth in the last few years has led to a significant increase in the production and consumption of meat products, and this trend is expected to continue. Chile’s meat sector stands out due to the high quality of its products that consistently exceed international standards. This is due to Chile’s geography, located between the Andes to the East and the Pacific Ocean to the West, that makes the country practically immune from foreign pests and disease. The industry has also seen a concerted effort by livestock professionals, health technicians, and businesspeople to help it reach international acclaim. According to the World Organization for Animal Health, Chile is one of the few countries that is fully free of all livestock diseases.
Chile’s dairy sector has been a popular recipient of foreign investment in recent years. This industry includes products like powdered, fluid, condensed, or evaporated milk, cheese, butter, yogurt, cream, and desserts. Chile supplies these products to over 36 countries, primarily within South America, Central America, and the U.S. These exports reached $244.9 million in 2014. Foreign investors are attracted to the dairy industry for its relatively cheap land, labor, and countless trade agreements with countries that have an increasing demand for dairy products. Since it became a net-exporter in 2004, Chile has been ramping up production to meet demand.
Aquaculture is an essential sector within the Chilean food industry. With a coastline that stretches for over 4,300 km, Chile has a variety of aquaculture products. Chile is the world’s largest supplier of rainbow trout and Pacific salmon. The U.S. takes in the main bulk of these exports, which reached $5,295 million in 2014. A key factor in this industry is the persistent focus on sustainability, which has led to a rise in quality of Chilean fish and seafood products. The fisheries are kept under strict conservation standards and subject to quotas and temporary bans. Chile has also devoted significant resources to the growth and diversification of its aquaculture products. These tactics have expanded Chile’s market share substantially, as now 7.4 million people around the world each day eat Chilean seafood. Clearly, Chile’s natural advantages coupled with concentrated industry efforts to increase quality and sustainability within the sector have contributed to its market growth.