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: 2021-01-16

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 29 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. The agriculture industry—including agricultural-related products—is responsible for 28 percent of Chile’s overall trade, 11 percent of its total gross domestic product, and around 10 percent of the country’s national work force.

Chile is among the top ten agricultural exporters in the world. Chile’s main agricultural exports are wine, fresh fruit, dairy, meat and fishery products. Chile has a modern and developed food processing industry that is forecast to grow to more than 35 percent by 2030. The food and beverage industry will grow by 6.6 percent annually.

U.S. exports of agricultural & related product to Chile totaled $1.1 billion in 2019 which represent a13 percent annual growth over 2018. Chile is the third largest market in South America for U.S. agricultural products and the second largest market in South America for consumer-oriented agricultural products. 

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 2019, Chile imported $3.7 billion worth of consumer-oriented agricultural products from the world and $755.5 million from the United States, a 18.5 percent increase over 2018, and the highest level of exports recorded so far. The top U.S. agricultural exports to Chile are beer, poultry, pork, dairy products, beef, condiments and sauces, and nuts. 

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 organic foods. 

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 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. Chile’s food retail sales reached $15.7 billion in 2019. 

There are five main retail groups in Chile: FalabellaCencosud, 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.

According to the National Institute of Statistics (INE), in 2018, 1,371 stores, including hypermarkets, supermarkets and other small food retail stores with a minimum of three checkouts composed the Chilean food retail sector and 50 percent of them are located in the Metropolitan region. Supermarkets have the largest market share for Chile’s food sales, holding 48.2 percent of total food sales, mid-sized supermarkets hold 12.1 percent of total sells and Grocery stores have a market share of 21.2 percent.   

Chile is becoming increasingly urbanized, not only in the Metropolitan region but also in other provincial or second-tier cities.  The retail industry has been adjusting to this trend especially grocery retailing that has been adopting a convenience model through chained convenience stores, forecourt retailers 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’ purchase decision is store location, followed by price, and promotional activity. 

The Chilean retail industry has been adapting to the online world both with electronic and mobile commerce. 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. 

For more information on the retail market see GAIN report.

Hotel, Restaurant and Tourist Industry 

Hotels, restaurants and institutions seek to reduce operational costs by buying processed foods and ready-made meals, which minimize labor costs. Consumers’ healthy lifestyle trends have changed not only restaurant and hotel operators, but also the institutional food services.  Healthy foods are a category of products that show huge potential for growth in the Chilean market, there is increasing concern for health issues among consumers and food processing companies that are trying to adapt to health regulations and consumers’ demand. Another category of products with high growth potential is gourmet food and beverages. 

Hotels, currently the biggest investment sector of the HRI market, will continue to thrive and this will provide export opportunities for U.S. producers. 

For further information on food services please see HRI GAIN report.

Business Recommendations and Import Procedures 

Conduct marketing research, not only in terms of typical market research, but also of appropriate business contacts and Chilean import regulations in order to successfully seize market opportunities and overcome market challenges.

If you have questions or need assistance exporting agricutural products to Chile, please contact the Foreign Agricultural Service (FAS) in Santiago, Chile. U.S. companies seeking to export food products to Chile are advised to do thorough research for a good understanding of the market. FAS GAIN reports are a good source of country specific information.

Work closely with U.S. Department of Agriculture Foreign Agriculture Service (FAS) Santiago Office to promote U.S. food products on Sabor USA Chile Facebook and Instagram to strengthen the U.S. food lovers’ community on social media. 

FAS Santiago recommends exhibiting at the USDA-endorsed show Espacio Food & Service 2020 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 serve to contact local distributors/sales agents, buyers, and businesspersons, and to become familiar with local competition. In the case of new-to-market companies, be prepared to provide support for in-store and media promotions to familiarize consumers with your products. Another option is state/regionally organized trade missions.

Adjust your product to local preferences, if required prepare promotional material in Spanish and assign a specific budget to promote your product locally.

Conduct background checks before entering into contractual agreements with potential importers.

Develop an appropriate marketing campaign that informs the consumer the origin of the brand. Slogans and marketing materials should be understood in Spanish. 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) 
  • Dairy products (cheese and ice cream) 
  • Sauces, mixed condiments and seasonings
  • Frozen meals 
  • Healthy foods (natural derived, with few food additives and preservatives) 
  • Healthy snacks; healthy beverages (natural ingredients, functional drinks)
  • Ready to eat foods.

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