Check the interview made by El Mercurio to the Vice President of Fine Wines and Corporate Image, on the celebration of the 35th anniversary of the icon brand Don Melchor.

She is one of the 100 most important women in the global wine industry. Last year, she took over a new area of the winery, Luxury Brands Division, comprising a portfolio of 14 high-end brands. That’s where the growth will be, he says. ‘It’s been something that has cost us as a country,’ he acknowledges in terms of raising the average price. And he stresses that the Concha y Toro crisis is behind us.

“I love going to the markets, because it fills you with energy”. In recent years, Isabel Guilisasti Gana has travelled more than usual.

In 2023, she became the head of Concha y Toro’s new high-end wine area: Luxury Brands Division, as vice-president of Fine Wines and Corporate Image. He is its visible face, and that portfolio, he acknowledges, requires contact with the consumer. To this, he added a new milestone: the icon of this pool of grape varieties, Don Melchor, celebrated its 35th anniversary, which prompted a tour of its main markets. ‘The story behind this wine reflects what has been our passion, our quest to preserve a terroir that was given to us,’ he says in the restored Casona Don Melchor in Pirque. In 2019, this brand became independent from the parent company. ‘It was already 30 years old and had achieved worldwide recognition. So, it was appropriate for this son to become independent,’ says Enrique Tirado, its CEO.

Guilisasti – one of the 100 most important women in the industry worldwide – emotionally recounts the history of this brand. She says that Concha y Toro, a holding company controlled by the Guilisasti family, which has an annual turnover of more than US$900 million, was founded in 1883 by Don Melchor. In the late 1980s, the possibility of exporting premium wines from Chile opened. ‘We have a very special terroir which is Puente Alto. And we realised that this place had very good qualities to produce Cabernet Sauvignon’.

They travelled to France, checked with experts to see if this area had possibilities… and it did. Don Melchor was born. In the second vintage, it was selected among the 100 best wines in the world, an unprecedented milestone for the sector. ‘That changed the image of Chile’. In 1996, Concha y Toro would make an alliance with Baron Philippe de Rothschild, owners of Mouton Rothschild… and they would begin the path to the top of the range.

In 2017, you launched the premiumisation strategy. How do you frame this story?

‘In 2017, we looked at the industry where the big growth was going to be in this premiumisation of wine. We were also seeing a consumer who was willing to spend more for higher-priced wines. And the company decided to go for premiumisation, where we were going to focus all our efforts on premium brands upwards. And it has been quite a successful strategy. More than 50% of the turnover comes from the premium wine segment. And we defined which were going to be the leaders of this premiumisation: within the premium segment, Casillero del Diablo, and in the icon segment, Don Melchor. And that is where Don Melchor takes on a leading role, in a way, in the 2023 portfolio of the company’s fine wines.

And that’s when the Luxury Brand Division, which he leads, was created?

‘In 2023 we decided to form this Luxury Brand Division, which are the brands that belong to the ultra-premium and icon segment of the company with brands from the three origins: Chile, USA and Argentina. It is a portfolio of 14 brands, where we defined a much deeper premiumisation strategy. What we’re going to be our sales channels, our distribution network, who were going to be part of this Luxury Brand Division team? Here we had to go to a segment where we could connect directly with our consumer. And we built a network, which we call the Luxury Brand Division, of people in Brazil, in the UK, in China, in Asia-Pacific, in the United States, who work exclusively for this.

It has been difficult for the industry to achieve the goal of moving towards a higher average price and abandoning the stigma of good, nice and cheap. How do you explain this?

‘It has been something that has cost us as a country. In the wine industry there is what is called the Old World: France and Italy. And the history has been marked by those wines in terms of the highest value wines. The new world began to participate in this industry with proposals that were a little timider at the beginning, more volume-oriented, and little by little we have had to conquer the luxury consumer. Today that luxury consumer has changed, he is no longer the consumer he used to be, who wouldn’t drink wine unless it came from France. And this transition is a great opportunity for Chilean and New World wine, to rise in the perception of value. To the extent that Chile and Australia, California, produce high quality wines, the doors will open to move up the price segment to which the New World was destined. Today, for example, a California wine can cost 30-40% less than a Mouton.

But are we too timid? You hear this for decades, and the average price has fallen 6.6%.

‘Globally, what has been growing is premium upwards. It came as a redefinition after the pandemic, it slowed down, because the growth rates were so high that one tended to think that this index would continue to grow in the same way, but it didn’t, because of inflation, interest rates, the amount of stock that there is in the world. Now, what is our job as Chile, why is it so hard for us? Not because of a specific market situation, not because there are fewer consumers, not because the premium segment is not growing. It is not because of that. It has to do with how we have been positioning ourselves as Chile at a global level.

In terms of being good, beautiful and cheap?

‘It has been difficult for us to make that change, because today you say, how can we position our wines in such a way that they are accessible to this new global consumer? How can we make these wines generate greater value? And there, through the trade association, we have been looking for insights to attract the new consumer.

And what is this new consumer looking for?

‘The new consumer is marked by generation Z and the millennials, which is totally different. Today, the classic 4Ps of marketing (price, product, promotion, place), which are born from the product, are not enough to sell. You must add the 4Es: emotion, experience, exclusivity, engagement, how you connect with the consumer. Putting the product on the shelf is not enough, you must generate an experience around it. Before it was the product that ruled, today it is the consumer, so you must engage with the consumer.

How are we doing there as Chile?

‘We are in that strategy today. As Wines of Chile, we are working hard on how to bring that more natural, more authentic, more hidden world that has to do with geographical landscapes of the country, such as Patagonia; that is the big campaign that Wines of Chile is doing today. But you can also generate new experiences around your brand.

How challenged is the industry today? Don Melchor fell 14.5% in value in the first half of the year.

‘The industry is challenged, because the global scenario is complex. There is volatility, high interest rates, but that does not mean that wine consumption will stop. Now, who is going to do well or who is going to do badly, is the big question. Or, how to understand today’s market, how to adapt ourselves as Concha y Toro or as a company to this new generation, how do we get there? That’s the big question. That’s the big challenge. The world has changed, and that is what we must get into our minds: people don’t buy products, they buy experience. And that’s where we have the big challenge and the whole industry worldwide. It’s a new scenario and the industry must adapt; it must create and deliver more value.

You, who have been pursuing this premiumisation strategy for so many years, do you have an advantage over your competitors?

‘Yes, we still have a lot of growing to do, but of course, you have an advantage when you start to visualise a strategy year in advance and you start to get your whole company to have that look, that vision.

This semester, profits grew 263%. Is the crisis over for the company?

‘I think so. Of course, there are times when you can have some destabilising moments, like in ‘23, when distributors or retailers stocked up on a huge amount of wine, but today that is no longer an issue. And that’s where we are, and I think that growth in the wine industry is going to come from innovation, from new launches, from understanding the consumer well. If you start working with all these insights, you should only generate growth. In 2019, in fact, we also started with the world of experiences. And we opened the Don Melchor experience at La Casona. And today we are investing there.

Is this consumer Chilean, foreign?

‘Mainly Brazilian, they are fascinated by wine. Chile is very well positioned in South America as a producer of great wines. We have conquered it.

And is Argentina achieving the same development in premium wines?

‘Yes, Argentina is a great producer of Malbec, and they have positioned themselves quite well in some specific markets. Chile is more global; it is in more countries and has been conquering the world for many more years than Argentina. Luxury has also been democratised; before, to access the world of luxury you had to have a very high standard, today for this young consumer of 30, 35 years old, luxury is more accessible, it is a much more transversal world’.

Many companies find it difficult to make that match with their consumers…

‘It is a matter of observation. We have been very focused on understanding this new consumer. Before 2017, we said: ‘OK, the company is no longer a company focused on the communication of the wine producer, but how we reach that consumer to be able to deliver the values he is looking to achieve’. There is vision, and that is where my brother Eduardo has always been very focused and has led us to look at the consumer with greater attention and dedication. But at the same time, it is not enough to know it, you must feel it. And that empathy of understanding the consumer has to do with a view of being up to date, of not staying with the old paradigms, but being open to change’.

‘That’s why I love a quote from Bernard Arnault, owner of LVMH. He says that a great brand always honours its past and is perceived as highly contemporary. For me that has been the great inspiration of my life. At Viña Concha y Toro we are dedicated to honouring the past, but at the same time perceiving ourselves as highly contemporary, that is what has allowed us to be current and somehow leading the wine industry’.

And especially when on the one hand they have a strategy, but on the other hand an important economic challenge; their profits fell more than 50% in one minute.

‘In these things you must dare, because sometimes they are great opportunities. And close your eyes, and bet on something that you deeply believe in. And you also get that from certain statistics. The luxury industry, between 2018 and 2023, grew 63% in value. By 2025, 20% growth is projected, and by 2028, 2.1 trillion euros in sales are expected. And within the luxury industry, tourism, Fine Wine and Spirits, and gastronomy are among the top five industries. So, the wine industry is going to grow, regardless of the current situation.

What are your projections if 53% of sales are already premium and above?

‘Super-luxury represents less than 4% of the company. And we plan to reach at least 5% by 2027; the value of this segment is very important. And we are going to achieve it.

Aurelio Montes said that the industry will only recover in 2026. How do you project it?

‘It is difficult to visualise it, because many things are happening in the global economy, but regardless of that, if we manage to position Chile and bring solid brands in the premium segment upwards, we should achieve growth’.

By 2026 or 2025?

‘I think by 2026’.

And how is Viña Concha y Toro doing in that scenario?

‘In the case of Viña Concha y Toro, the diversity of the market makes it possible to navigate in a better way in more difficult times. As a company, the only thing we know how to make is wine. And every day is focused on how we add more value or add value to the industry. It is 100% focused on the world of wine. We navigate a bit in the storms, but the route is clear’.

You can check the original interview in this link.