The large continuum in altitude and latitude provides Chile with a large climatic range suitable for growing a myriad of fruits and vegetables. Moreover, Chile has a highly efficient production and marketing services in the fruits and vegetables sector. Strong support by the Chilean government, free trade agreements with major countries, which occupy 80% of the world’s GDP, and minimal tariff access to multiple global markets, lends Chile numerous comparative advantages in the fruits & vegetables sector.
The profitability of the industry has been markedly reduced in the recent years. Long-term governmental policies, positive changes in orchard management practices, and more research funding, are needed to maintain the viability of the Chilean fruits & vegetables industry. Production of fresh apples is estimated to be around 1.4 million metric ton in 2015, a 6.4% increase over the previous year while domestic consumption is around 0.25 million metric ton. Production of fresh grapes decreased slightly from 929,000 metric ton in 2014, to 925,000 metric ton in 2015, in spite of early harvest. Chile is diversifying into markets, other than the United States and European Union, for further sustained growth and to avoid saturation. Avocado and cherry are estimated to be amongst the fastest growing fruits, in terms of production, with a recorded CAGR of 6.90% and 14.48% respectively, during 2014-2016.
Drivers for the fruits & vegetables industry:
- Large number of regional trade agreements, which provide greater access with dominant markets across the globe.
- Favorable climate, soil, and isolated geography, with comparatively low risks of pests and diseases.
- Highly efficient production and marketing services, and good industry linkages.
- Strong government support and large investments have provided Chile a sound macroeconomic and institutional framework, which has led to an ideal environment for the development of investment projects in the entire fruits & vegetables industry production chain.
Restraints for the fruits & vegetables industry:
- Lower rates of currency exchange (weakening Peso) are driving the export prospects.
- Scarcity and higher cost of agricultural labor.
- Scarce investment in R&D and management practices.
- Lack of long-term government policies, with regard to diversity of export markets and incorporation of small and medium-scale growers.
The Chilean agricultural market is segmented, by type of product, into fresh fruit and vegetable. These are sub-segmented into onion, garlic, potato, oats, wheat, corn, beans, tomato, plums, apples, grapes, blueberry, kiwifruit, cherry, avocado, pears, and walnut.
Within South America, Chile is responsible for 60% of all fruit exports. Chile is the leading exporter of fresh blueberries, grapes, plums, dried apples and prunes. It is also the second largest exporter of avocados, cherries, walnuts, and raspberries. Grape is the leading fruit followed by apples and blueberries. Chilean fresh fruits and vegetables export in 2015, were worth USD 4.28 billion and this placed Chile as the world’s fourth largest fruits and vegetables exporter, in terms of value. The two main export products are, grapes (30% share) and apples (25% share). Around 750,000 metric ton of grapes and 630,000 metric ton of apples were exported during 2015-2016. In the same period, table grapes, apples, and pears, were harvested 10 days earlier, compared to a typical production cycle, resulting in an increase in production volumes. Apple exports thereby increased by around 4.7% to 800,000 metric tons in 2016-17, table grapes by 6.3% to 730,000 metric ton, and pears by 8.8% to 140,000 metric ton. Chile’s cherry production is expected to increase by 7% and reach around 124,000 metric ton during the period 2017-18. Export is also expected to rise by 8% to around 104,000 metric ton, for the same period. In 2015, export to Asia surpassed those to European Union for the first time, primarily due to an almost 200% increase in export to China. Chilean export to China amounted to around USD 1.18 billion in 2016, a growth of 22% over the previous year. Imports are hardly substantial and were worth less than USD 200,000 in 2015. Cranberries has shown a spectacular export growth of around 983% during 2015-2016, while organic blueberries and raspberries have shown significant export growth over the last 5 years, mainly because of the ever-increasing demand from consumers in European Union and the United States.
Recent Industry Insights
- Chile and the European Union have agreed to mutually recognize the equivalence of their organic production rules and control systems, as per the deal signed in April 2017. Effectively, this means that all organic products — including fresh produce — certified and produced in Chile, can be placed directly in the EU market and vice versa.
- Chile replaced Thailand as the top fruit exporting nation to China. This is a remarkable feat, considering the distance between the two countries.
- Chilean avocados entered the Chinese market in 2014 and export has almost tripled to 13,194 metric ton between 2015 and 2016.
- In the 2016-17 season, the annual production of blueberry reached 130,000 metric ton, with export increasing by 13% to a record 103,000 metric ton.
Key Deliverables in the Study
- The study covers the Chilean fruits & vegetables industry, and gives an overview on the current market dynamics.
- Report talks about production, consumption, import, and export of major fruits and vegetables, grown in Chile, along with recent market trends, government regulations, forecast, major regions of export and import, etc.
- The report contains extensively researched competitive landscape section with profiles of major companies and their market share, along with an analysis of their current interests and financial information, and strategies adopted by them to sustain and grow in the market.
- The study clarifies the major import and export and importing and exporting partners. The report analyses PESTLE and Porter’s five forces, supply chain, network, and retail sector as well.
The Report holds importance for the following stakeholders
- Growers and packers
- Agricultural commodity traders
- Supply Chain Analysis
- Regulatory Framework
- Trade Analysis
- Trend Analysis
1.1 Market Definition
1.2 Key Findings of the Study
2. Research Scope and Methodology
2.1 Study Deliverables
2.2 Market Segmentation
2.3 Study Assumptions
2.4 Research Design
3. Market Dynamics
3.1.1 Existance of Regional Trade Agreements providing Greater Access to Export Markets
3.1.2 Favorable Agro-climatic Conditions with Comparatively Low Risk of Pests and Diseases
3.1.3 Highly Efficient Production and Marketing Services with Good Industry Linkages
3.2.1 Lower rates of currency exchange (weakening Peso), impacting the export prospects
3.2.2 Scarcity and Higher Cost of Agricultural labor
4. Industry Analysis
4.1 Porter's Five Forces Analysis
4.1.1 Bargaining Power of Suppliers
4.1.2 Bargaining Power of Buyers
4.1.3 Threat of New Entrants
4.1.4 Threat of Substitute Products
4.1.5 Degree of Competition
5. Market Segmentation
5.1.1 Market Size (in USD Million)
5.1.2 Domestic Production Overview
5.1.3 Domestic Consumption Overview
5.1.4 Import Value and Volume
5.1.5 Export Value and Volume
5.2.1 Market Size (in USD Million)
5.2.2 Domestic Production Overview
5.2.3 Domestic Consumption Overview
5.2.4 Import Value and Volume
5.2.5 Export Value and Volume
6. International Trade & Price Scenarios (Major Crops)
6.10 Grapes (Fresh/Dry)
7. Regional Analysis
7.1 PESTLE Analysis
7.2 Supply Chain Analysis
7.3 Government Policies
8. Competitive Analysis
8.1 Distribution Network & Retail Analysis
8.2 List/Profile of Key Players