AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 20

 

Firm Creation, Firm Evolution and Clusters in Chile’s Dynamic
Wine Sector: Evidence from the Colchagua and Casablanca Regions 

Robert N. Gwynne 

Introduction

Since Chile’s adoption of outward orientation, the country has converted itself into the fourth largest producer in exports volume and fifth large producer in export value (ODEPA, 2005 & Olavarria et al, 2008). It has increased its share in the predominant markets, shown by its increase in shelf space in the U.K supermarket (Gwynne, 2008c). The study of how Chile changed around its wine sector in a short space of time (exports only really started in the 1990’s) is of highest importance, as it is evident this semi- peripheral country has fought its way into the competitive global value chain. I will study the changing periods of wine history in Chile along with firm creation and the strategic evolution of firms. This will examine in particular the record of process upgrading and upgrading in marketing and branding. An analysis of how these firms evolved will investigate how the Chilean wine sector has gained its success in the global market. Finally, a study of clusters in Chile shall be carried out to show the importance of the firms studied in creating economic growth not just for individual firms but also for the economy of an area.

In order to carry out this study two valleys shall be examined. The first is that of the highly successful Colchagua valley in Chile’s sixth region and Casablanca in the fifth region. It is the second most planted region in Chile (Olavarria et al, 2008) and arguably produces the highest quantities of quality wines in Chile. Casablanca, on the other hand it is a relatively young valley, with very little planting of grapes till the early 1990s. It is an example of the extension of traditional wine producing regions in Chile with land under grapes increasing 164% between 1998 and 2006 (Wines of Chile, 2008).

The new dimension of Chile is the east-west axis and there are four major areas in this regard (Richards, 2006: 13-14). The first covers the plateaus and slopes on the western side of the coastal range, where cloudy, humid mornings and stiff afternoon breezes are the norm; this is very much the landscape of Casablanca whose production really took off

in the 1990s. The second is the eastern side of the coastal range, where temperatures tend to be very warm except in the sites that are exposed to some oceanic influence – this is where Colchagua at present starts off its new range of vineyards, The third is the central

depression and the fourth is the contact zone between this flat land and the Andean foothills in the east, where conditions are warm though moderated by mountain downdraughts and southerly winds. Colchagua covers these latter two regions as well.

Related Items

Menu