Chile - Country Commercial Guide
Agricultural Sector

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-25

Overview 

Chile has adopted a commercial policy to open and diversify markets for its agricultural and food products, with a special focus in the Chinese market. Chile has 30 trade agreements that cover 65 markets.

Chile is among the top ten agricultural exporters in the world with main agricultural exports including wine, fresh fruit, dairy, meat, and fishery products. In 2020, the agriculture industry contributed $27 billion or 11 percent of the Chile´s GDP, comprised 28 percent of overall trade, and 10 percent of the country’s workforce.  

Chile’s main agricultural exports are wine, fresh fruit, dairy, meat, and fishery products. Chile has a developed food processing industry that generates 23.3 billion annually and is forecast to grow to more than 35 percent by 2030.  U.S. food and agricultural exports to Chile totaled $1.1 billion in 2020, which represent a 0.3 percent annual growth over 2019.  Chile is the third largest market in South America for U.S. agricultural products, after Colombia and Brazil, and the largest market in South America for consumer-oriented agricultural products with $712.5 million worth of export sales in 2020.Healthy foods, gourmet foods, prepared foods and ready-to-eat meals show huge potential for growth in the Chilean market. Chilean consumers have an increasing concern for health-related issues while the food processing industry continues to adapt to the nutritional labeling law, higher labor costs, and sophisticated consumers, all of which present challenges, but also opportunities for U.S. high value-added products and ingredients such as natural additives, preservatives, thickeners, and sweeteners. 

Chilean Processed Food Industry 

In 2020, Chile regained its position as the top market for U.S. consumer-oriented products in South America, followed by Colombia and Peru.  The United States maintained its position as the second largest supplier of consumer-oriented products to the Chilean market with a market share of 17 percent after Brazil, shipping $712.5 million.  The top U.S. agricultural exports to Chile are beef, dairy products, pork, processed vegetables, bakery goods, cereals & pasta, soups & other food preparations, fresh fruits, poultry, beer, and chocolate & cocoa products.

There are three main reasons for Chilean companies to import food products and ingredients: (1) If the products are not available domestically through local production (2) if it is cheaper to import rather than buy domestically; or (3) if imported products offer a higher quality than those available in the domestic market.

Food processing companies are constantly looking for innovative ingredients for production of healthier foods especially those for consumers with food intolerances such as lactose and gluten-free products. Chilean consumers have an increasing concern for health-related issues while the food processing industry continues to adapt to the nutritional labeling law, higher labor costs, and sophisticated consumers, all of which present challenges, but also opportunities for U.S. high value-added products and ingredients such as natural additives, preservatives, thickeners, and sweeteners.

New ingredients are used in the production of healthier products especially those adapted to consumers with food intolerances, such as lactose and gluten free products.  Alongside there is a rising demand for more natural and healthy food products.

Chilean companies seek to reformulate and develop new products that do not need to carry a warning label from the nutritional labeling law.  Therefore, companies seek for ingredients and healthier substitutes (for example sweeteners instead of sugar) or innovations on how to produce tasteful products within the same price range, but with healthier ingredients.

For further information on food processing ingredients please see Food Processing Ingredients GAIN report.

Food Retail Market 

Chile has been one of Latin America’s fastest-growing economies in the last decade enabling the country to have a modern and dynamic food retail industry.  Chilean’s food retail sales reached $27.9 billion in 2020, a 2.9 percent decrease over 2019 while supermarket sales totaled $15.1 billion and represented 54.2 percent in total retail sales.  During the COVID-19 pandemic, the Chilean government designated the retail food sector as essential and continued to operate without interruptions.  Local suppliers/distributors to supermarkets and mom-and-pop stores shifted toward e-commerce to reach consumers directly.  As a result, online food and drink sales totaled 1.2 billion and grew by 133 percent in value.

There are five main retail groups in Chile: Falabella, Cencosud, Walmart Chile, Ripley, and La Polar. Falabella and Cencosud have department stores, home centers and supermarket/ hypermarkets. Chile has a modern, highly competitive supermarket sector.

The Chilean retail sector is composed of a mix of large supermarkets, mid-sized grocery stores, convenience stores, gas station markets, and thousands of smaller independent neighborhood mom-and-pop shops.  Chile is becoming increasingly urbanized, not only in the Metropolitan region (Santiago), but also in other major cities like Valparaiso or Concepcion.  The retail food industry has adapted to this trend through the increase of convenience store chains, gas station markets, and smaller supermarkets.

Chilean consumers purchasing habits have changed and retailers have been adapting to that change.  Traditionally, Chileans used to be loyal to brands and focused on quality, disregarding price. However, Chilean consumers have become increasingly informed, comparing, and looking for promotions and variety before making a purchasing decision and searching for lower prices even if this means not purchasing all their groceries from one store. The most important factor for consumers’ purchasing decisions are store location, price, and promotional activity.

A determining aspect that is driving consumers’ behavior is the adoption of new technologies.  Chile has widespread internet access, thus consumers have turned to online shopping as a convenient and cost-efficient solution.  The challenges in the retail industry are mainly focused on developing new platforms that respond to consumers’ demands for more personalized products and services, offer a greater assortment of products for customers looking for healthy and functional food and beverage products, and improve customer service. 

Finally, the number of inhabitants per home has gradually decreased in Chilean cities.  The traditional large family structure is less frequent, and single-person households are more common.  These trends are shaping the way Chileans buy groceries and access food services.  Smaller households with less storage space induce frequent purchases from grocery stores located near their homes or jobs. 

For more information on the retail market see Retail Foods GAIN report.

Hotel, Restaurant and Tourist Industry 

The Chilean food service industry is closely linked to the hospitality and tourism sector and has grown consistently in the last decade.  Unfortunately, the COVID-19 pandemic had a major impact of the Chilean HRI sector as international travel to Chile and sanitary restrictions forced the temporary and permanent closure of many HRI businesses.

The COVID-19 pandemic and intermittent quarantines accelerated the trend towards online shopping, especially for groceries and consumer food services.  According to data from Euromonitor, online foodservice sales increased from 5.2 percent of all foodservice sales in 2019 to 34.5 percent of all foodservice sales in 2020.

Despite the general negative economic impact of the COVID-19 pandemic, Chile still offers excellent opportunities for U.S. food and beverage exports, especially for those U.S. companies seeking to initiate or expand exports to Chile’s retail and HRI sectors.  Chilean consumers appreciate U.S. food and beverage products as they are considered of high quality.

For further information on food services please see Food Service - Food, Hotels and Restaurants GAIN report.

Business Recommendations and Import Procedures 

Potential exporters should conduct market research, including the identification of appropriate business contacts and Chilean import regulations in order to successfully seize market opportunities and overcome market challenges.

Potential exporters should contact the Foreign Agricultural Service (FAS) in Santiago, Chile for inquiries or requests of assistance to export agricultural products to Chile. U.S. companies seeking to export food products to Chile are advised to do exploratory research to understand the Chilean market. FAS GAIN reports are a good source of country specific information.  Exporters work closely with U.S. Department of Agriculture Foreign Agriculture Service (FAS) Santiago Office to promote U.S. food products on Sabor USA Chile’s  Facebook  and Instagram  accounts and to strengthen the U.S. food lovers’ community on social media. 

FAS Santiago recommends exhibiting at the USDA-endorsed show Espacio Food & Service 2022 the most important food industry event in Chile. This show serves as a gateway into the Chilean market, helping U.S. exporters to promote their products, to get in contact with potential business partners, buyers, and to run product introductions.

A trade show can help contact local distributors/sales agents, buyers, and businesspersons, and become familiar with local competition. In the case of new-to-market companies, exporters should be prepared to provide support for in-store and media promotions to familiarize consumers with their products. Another option for exporters is to participate in state/regionally organized trade missions.

Exporters should adjust their product to local preferences and, if required, prepare promotional materials in Spanish and assign a specific budget to promote their product locally. Exporters should conduct background checks before entering into contractual agreements with potential importers.

Exporters should develop an appropriate marketing campaign that informs the consumer the origin of the brand. Slogans and marketing materials should be understood in Spanish. Exporters should be mindful of using slang. The word “American” coupled with a U.S. flag can be favorably used in this market.

While regulations are relatively transparent, changes are not widely advertised. Hence, the exporter or his/her representative must monitor the official journal (Diario Oficial), where periodical changes are published. One can also visit the websites of the Ministry of Agriculture and the Ministry of Health to seek further updates. Spanish labeling is mandatory for all products.

Opportunities 

  • Meat products (beef, pork and poultry)
  • Beer 
  • Dairy products (cheese and ice cream) 
  • Prepared food (frozen meals and peanut butter)
  • Tree nuts (almonds and pistachios)
  • Fresh fruits (apples, lemons, and oranges)
  • Dog and cat food
  • Snack foods
  • Sauces, mixed condiments and seasonings, and
  • Eggs and egg products

For further information regarding the Agricultural and Food sectors contact the U.S. Foreign Agricultural Service