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Agricultural Food Opportunities in Chile

Chile offers investors a wealth of investment opportunities, whether that be in mining, infrastructure or agriculture. The agricultural sector presents many opportunities with commercial policies that allow for the opening and diversification of the agricultural and food market. Chile is known for exporting wine, however other key exports include fruit, poultry, salmon and dairy. In 2021 24.4% of total Chilean exports were in this sector, making up around 9% of the total GDP. The US exports over $1.3 billion agricultural products to Chile, which increased by nearly 30% from 2020.

There are a number of reasons as to why Chile is advantageous for agricultural companies. One of which is due to Chile’s southern hemisphere location, which means the country is able to produce goods that may be unavailable in other parts of the world. The land, water and geographic positioning means pests and diseases are minimized, helping to keep costs low and increase prices. Chile also has trade agreements with over 90% of the world’s economy

The Retail Food Market

Retail food sales were $25.6 billion in 2021, which is an increase from the previous year. $14.4 billion worth of sales came from supermarket food sales, which represented 56.3% of total retail food sales. This increase can also be attributed to the impacts of the COVID pandemic, where consumers increased their online grocery and food service purchases.

The pandemic also resulted in many companies developing e-commerce platforms to help consumers get what they needed. E-commerce retailing increased by over 18%, which is expected to grow even more in the next 6 years. In Chile there are five main retail groups, Falabella, Cencosud, Walmart Chile, Ripley and La Polar.

When it comes to purchasing goods, consumers in Chile take into account the location, price and promotion of the products. Demonstrating they are well informed, which is ultimately driven by new technology and internet access, giving consumers a plethora of options, pushing them to use online shopping. With family sizes decreasing and more people living alone, consumers often make more frequent shopping trips near their homes and jobs, presenting opportunities for convenience stores and mini markets.

Tourism and the hotel industry

With tourism and hospitality on the rise in Chile, the food service industry is also growing. After impacts of the pandemic, in November 2021, the industry began to open up again, increasing opportunities for businesses. Consumers in Chile consider US food and beverage products to be high quality, meaning that US companies looking to expand exports to Chile have potential.

The processed food industry

Companies looking to expand into Chile have opportunities in the food processing industry, especially US companies with high value added products and high quality ingredients. The food processing industry represents the second largest economic export sector in Chile. The US is the second largest supplier of consumer-oriented products to the Chilean market, after Brazil. Many international companies use production plants in Chile to provide goods for customers in other parts of Latin America. Chilean companies will import products and ingredients if the products are not available domestically, if they are cheaper, and if they are better quality.

The Future

With consumers also becoming more health conscious, there are opportunities for companies in the healthier snack industry, however this does not mean that other companies are at a disadvantage with many people still wanting processed foods. With tourism and hospitality also on the rise, and unlikely to stop companies wanting to export their products can have success in this industry. Companies who can provide food products online to Chile will also be at an advantage, with more and more people converting to online shopping.

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