Prowein: CyT unveils ambitious plans to push through £10 Chile price ceiling

By Andrew Catchpole

Published: 20 March, 2019

Chilean producer Concha y Toro (CyT) has put in place a new premium-focused strategy designed to double the company’s operating margins by 2020, coupled with the aim of boosting sales of its brands at £10 and above.

Counting market leading brand Casillero del Diablo and the innovative Cono Sur among its South American portfolio, CyT told Harpers that it is pushing a “value focus” trajectory that has been agreed with its investors.

“We went though a very intense rationalisation process last year to define a new strategy for the company,” said Thomas Domeyko, corporate export director at CyT, adding that discussions centred on the need to boost sale at the premium end.

The restructuring, which saw 10% of staff made redundant, has also led to a much more defined focus on certain wines within each branded range.

“We are aiming to double our operating margin by 2020 and we did a full analysis from the bottom up as to how to achieve this, which is growing the premium portfolio. This led us to narrow the portfolio when it comes to priorities, defining which brands to concentrate our energies and efforts on, to grow the business and achieve our ambition,” said Domeyko.

In a move that will likely have an impact on the Chilean category as a whole due to the prominence of Casillero del Diablo, investment will be put behind this brand and its upper tiers, plus the Marques de Casa Concha and Cono Sur labels, along with other and non-Chilean brands such as Bonterra.

The focus will be “in the most relevant markets and the markets with the most potential”, said Domeyko, also featuring innovation, with the UK at the forefront of the activity.

“We will also be innovating with new products, but always targetting this premium sector,” added Domeyko, with the first new products to be rolled out in the UK and elsewhere this May.

This new strategy comes on the back of the 2018 vintage, described by Domeyko as "fabulous, possibly the best ever" for Chile, which the company is clearly hoping will add further momentum to its premium ambitions.

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