Market Overview – Chile

March 2019

Market snapshot

Chile is a small but affluent market with a population of 18.1 million people, expected to increase to approximately 19.1 million by 2025. The poverty rate has declined from 26.0% to 7.9% between 2000 and 2015, however, the country has one of the most unequal income distribution level throughout the world.

Chile had a total gross domestic product (GDP) valued at US$277.4 billion in 2017, a 10.8% increase from US$250.3 billion in 2016.

Chile is a net exporter of agri-food and seafood products with total exports of US$16.1 billion (total imports of US$6.5 billion) in 2017, an increase of 0.2% from 2016.

An ageing and more health conscious population are increasingly demanding food with easy-to-use packaging and more nutritional foods. This will lead to growth in health and wellness and packaged foods.

Packaged food sales were valued at US$14.8 billion in 2017 and are anticipated to reach US$20.5 billion by 2022.

The top packaged food company in Chile in 2017 was Nestlé Chile SA with a 10.6% retail value share, followed by Soprole SA (6.1%) and Watt's SA (6.1%).

Chile's annual household expenditures per capita reached US$15,059.5 in December 2017 and are expected to increase by 2.9% in real terms in 2018.

Chilean consumers have become more health conscious in recent years as a result of a recent labelling legislation to indicate the nutrition of the foods and drinks they consume. Canadian exporters may find good opportunities if their products contain healthy ingredients, nutritional benefits, low fat, sugar or salt content, or have convenient packaging.

Production

Of Chile's top 10 crops, only sugar beets, corn and peaches and nectarines decreased in production over the 2012 to 2016 period.

Among the top 10 production crops, oats saw the most significant increase in 2016, growing by 26.6% over the volume recorded in 2015. Wheat was the fastest-growing production crop across the whole 2012-2016 period, with a compound annual growth rate (CAGR) of 9.3%. Despite the growth in domestic wheat production, there has been a substantial niche demand for Canadian wheat in which a large portion of the baking industry (and the mills that supply them) recognize the superior value of Canadian wheat for their products.

Crop production in Chile 2012-2016
Top 10 crops (tonnes) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Grapes 2,304,953 2,325,921 2,398,096 2,414,784 2,473,588 1.8
Apples 1,622,620 1,729,358 1,751,991 1,736,153 1,759,421 2.0
Wheat 1,213,101 1,474,663 1,358,128 1,482,310 1,731,935 9.3
Sugar beet 1,824,001 1,885,621 1,732,032 2,069,874 1,646,680 −2.5
Corn 1,493,292 1,518,545 1,186,127 1,538,755 1,174,487 −5.8
Potatoes 1,093,462 1,158,922 1,061,324 960,502 1,166,024 1.6
Tomatoes 739,115 836,264 909,025 967,714 997,174 7.8
Oats 450,798 680,382 609,926 421,048 533,080 4.3
Dry onions 344,952 339,551 324,580 311,994 346,778 0.1
Peaches and nectarines 365,466 369,595 354,100 333,928 337,402 −2.0

Source: FAOSTAT, 2018

*CAGR: Compound Annual Growth Rate

Meat production in Chile 2012-2016
Meat (tonnes) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Chicken 566,261 577,503 567,004 607,182 627,755 2.1
Pork 583,671 550,033 520,074 523,831 507,740 −2.0
Cattle 197,459 206,200 224,112 225,261 215,266 1.1
Turkey 103,087 98,094 96,802 103,581 112,768 3.5

Source: FAOSTAT, 2018

*CAGR: Compound Annual Growth Rate

Livestock production in Chile 2012-2016
Livestock (head) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Chickens 48,002,000 47,558,000 97,929,000 103,259,000 107,108,000 22.2
Cattle 3,750,000 3,007,883 3,000,000 2,735,857 2,836,523 −6.7
Pigs 3,325,481 2,798,868 2,431,449 2,696,765 2,614,670 −5.8
Sheep 3,650,000 3,401,700 3,300,000 2,185,449 2,000,000 −14.0

Source: FAOSTAT, 2018

*CAGR: Compound Annual Growth Rate

Trade

Chile is a net exporter of agri-food and seafood products. In 2017, Chile's agri-food and seafood trade surplus was US$9.6 billion with imports valued at US$6.5 billion, and exports of US$16.1 billion. Chile's agri-food and seafood imports grew at a CAGR of 0.3% between 2013 and 2017.

Chile's top agri-food and seafood imports in 2017 were fresh boneless beef, non-durum wheat, corn, oil cake and malt beer. Key supplying countries were the United States, Brazil, Paraguay, China and Canada. Canada was Chile's fifth-largest supplier of total agri-food and seafood products in 2017, with a 3.4% share.

Chile's top agri-food and seafood imports from the world, 2017
Commodity Import value US$ millions Top suppliers and market share % Canada's share %
1 2 3
Fresh boneless beef 900.2 Paraguay: 46.3 Brazil: 27.8 Argentina: 17.9 0.0
Non-durum wheat 305.0 Argentina: 55.6 United States: 23.9 Canada: 20.5 20.5
Corn 287.1 Argentina: 78.2 United States: 15.7 Paraguay: 6.0 0.0
Oil cake 282.7 Paraguay: 45.4 Argentina: 32.8 Bolivia: 14.0 0.0
Malt beer 186.4 United States: 47.0 Mexico: 29.4 Germany: 7.1 0.0
Animal food 167.3 Argentina: 26.5 Brazil: 13.2 Netherlands: 11.7 0.0
Frozen chicken meat 165.6 United States: 47.2 Brazil: 45.5 Argentina: 7.3 0.0
Frozen pork 161.5 United States: 45.0 Brazi: 31.5 Canada: 13.9 13.9
Cane or beet sugar 146.1 Guatemala: 35.5 Argentina: 34.5 Colombia: 26.6 0.0
Food preparations, NES* 140.2 United States: 27.9 Netherlands: 12.7 Argentina: 7.1 1.2

Source: Global Trade Tracker, 2018

*NES: Not Elsewhere Specified

Chile's processed food and beverage imports were valued at US$5.3 billion in 2017, with Canada accounting for 2.4%. Argentina, the US, Brazil, Paraguay, and Peru were the largest suppliers of processed food and beverages to Chile in 2017, accounting for 64.3% of the market. Chile's processed food and beverage imports increased by a CAGR of 0.9% between 2013 and 2017.

Canada's agri-food and seafood exports to Chile were valued at US$215.3 million in 2017. Top exports were non-durum wheat, rape or colza oil, frozen pork and dried, shelled lentils. In 2017, Canada registered an agri-food and seafood trade deficit of US$329.4 million with Chile (Canada imported US$544.7 million worth of agri-food and seafood from Chile in 2017).

Retail sales

Chile's packaged food market is robust with growth, which is expected to continue in the forecasted period. Retail sales were valued at US$14.8 billion in 2017, with a CAGR of 7.2% from 2013 to 2017. By the year 2022, retail sales are expected to reach US$20.5 billion, registering a growth of 6.7%.

Savoury snacks, baby food, and ready meals are expected to grow the fastest within the packaged food sector over the 2018-2022 forecast period. The most popular consumer trends and distribution channels utilized in this subsector are for prepared foods sold at supermarkets, takeout meals sold at specialty store chain operators, and various ready-made foods sold at convenience and department stores. Manufacturers are focusing on developing premium food products that are becoming increasingly more popular among consumers. New legislation in the country has forced manufacturers to provide nutritional labelling details on their products, leading many producers to reformulate and add more fortified functional health ingredients to their existing or newly launched products. By adding value to their products, manufacturers can appeal to the more health conscious consumers.

Packaged food retail sales in Chile – historic in US$ millions, fixed 2017 exchange rates
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Packaged food 11,164.4 12,120.4 12,908.4 13,814.4 14,768.7 7.2
Baby food 166.3 180.2 193.2 203.0 216.6 6.8
Baked goods 2,626.4 2,854.3 2,959.8 3,140.2 3,249.5 5.5
Breakfast cereals 144.7 150.2 155.3 169.6 169.6 4.0
Dairy 3,015.7 3,287.2 3,472.0 3,772.0 4,119.9 8.1
Edible oils 409.1 411.5 421.0 454.6 472.8 3.7
Processed fruit and vegetables 518.0 573.8 628.6 691.4 760.4 10.1
Processed meat and seafood 759.8 807.5 879.9 950.6 1,034.6 8.0
Ready meals 52.6 65.8 72.3 79.4 86.6 13.3
Rice, pasta and noodles 463.7 486.1 517.3 535.1 547.5 4.2
Sauces, dressings and condiments 363.1 378.7 392.4 416.9 446.2 5.3
Soup 35.7 34.7 35.4 36.3 38.1 1.6
Spreads 68.3 75.7 89.0 95.5 101.9 10.5
Confectionery 786.1 877.7 976.2 955.6 1,059.2 7.7
Ice cream and frozen desserts 704.2 755.5 830.6 906.9 958.6 8.0
Savoury snacks 554.9 613.9 670.9 748.2 817.7 10.2
Sweet biscuits, snack bars and fruit snacks 495.8 567.6 614.5 659.2 689.4 8.6

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Packaged food retail sales in Chile – forecast in US$ millions, fixed 2017 exchange rates
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Packaged food 15,859.1 17,000.0 18,134.7 19,297.6 20,540.9 6.7
Baby food 238.0 262.5 288.4 316.0 345.1 9.7
Baked goods 3,412.1 3,580.8 3,741.6 3,905.0 4,076.0 4.5
Breakfast cereals 182.2 195.6 210.0 225.6 242.5 7.4
Dairy 4,463.3 4,843.3 5,208.7 5,580.3 6,000.3 7.7
Edible oils 494.7 516.8 539.9 565.4 587.6 4.4
Processed fruit and vegetables 833.7 906.8 982.3 1,059.6 1,138.9 8.1
Processed meat and seafood 1,123.5 1,215.9 1,311.6 1,409.9 1,511.2 7.7
Ready meals 96.3 105.9 115.9 126.8 138.2 9.5
Rice, pasta and noodles 582.2 618.0 656.2 692.8 730.4 5.8
Sauces, dressings and condiments 478.9 512.7 547.5 583.0 619.5 6.6
Soup 39.1 40.2 41.6 43.2 44.8 3.5
Spreads 109.2 116.9 124.9 133.3 142.0 6.8
Confectionery 1,174.2 1,275.6 1,365.2 1,445.1 1,517.4 6.6
Ice cream and frozen desserts 1,013.1 1,068.5 1,125.3 1,183.4 1,242.7 5.2
Savoury snacks 895.9 983.2 1,082.6 1,198.3 1,336.0 10.5
Sweet biscuits, snack bars and fruit snacks 722.7 757.4 793.1 830.0 868.4 4.7

Source: Euromonitor International, 2018

*CAGR:Compound Annual Growth Rate

Health and wellness food products

The health and wellness sector grew by a CAGR of 10.5% from 2013 to 2017 and is expected to grow by a CAGR of 9.0% over the 2018-2022 period. The increase in health consciousness of the average Chile consumer will benefit this sector.

All health and wellness categories showed growth throughout the 2013-2017 period. Each is expected to continue growing in the next 5 years, albeit at a slightly slower pace.

Health and wellness food product retail sales in Chile – historic in US$ millions, fixed 2018 exchange rates
Category 2013 2014 2015 2016 2017 CAGR* % 2013-17
Health and wellness by type 2,154.7 2,381.2 2,657.4 2,940.0 3,214.6 10.5
Better for you (BFY) 694.4 763.1 849.4 965.2 1,068.7 11.4
Fortified/functional (FF) 731.1 823.1 923.2 1,002.9 1,063.4 9.8
Free from 86.1 97.1 109.2 114.4 127.6 10.3
Naturally healthy (NH) 643.1 697.9 775.6 857.6 954.8 10.4
Organic N/A N/A N/A N/A N/A N/A

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

N/A: Not Applicable

Health and wellness food product retail sales in Chile – forecast in US$ millions, fixed 2018 exchange rates
Category 2018 2019 2020 2021 2022 CAGR* % 2018-22
Health and wellness by type 3,523.4 3,858.4 4,205.1 4,573.6 4,968.8 9.0
Better for you (BFY) 1,173.9 1,284.9 1,402.4 1,531.1 1,675.2 9.3
Fortified/functional (FF) 1,156.8 1,268.7 1,380.9 1,495.1 1,613.3 8.7
Free from 137.7 151.6 165.6 179.7 195.5 9.2
Naturally healthy (NH) 1,055.0 1,153.2 1,256.2 1,367.7 1,484.8 8.9
Organic N/A N/A N/A N/A N/A N/A

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

N/A: Not Applicable

Opportunities for Canada

On March 8, 2018, Canada signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 10 countries: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. CPTPP represents a significant step toward closer trade and investment between Canada and Chile. Significant gains are possible for Canadian producers, who could gain market share in economies such as Chile. The CPTPP provides Canada with greater market access to CPTPP countries with the same level of tariffs as major regional competitors like Australia and New Zealand for key sectors, including beef, pork, seafood, cereal and many others. To obtain more information on specific Chile tariff reductions under this agreement see Tariff schedule of Chile (HS2012) (PDF).

From Chile's processed food and beverage imports valued at US$5.3 billion in 2017, Canada's trade share was 2.4%. With the new CPTPP free trade agreement, it will provide preferential access for Canadian agri-food exporters to key Latin American markets. This agreement has the potential to increase current opportunities with Chile in commodities such as non-durum wheat, canola, rape or colza oil, frozen porc, poultry and dried, shelled lentils. Also, Canadian cattle farmers could enter more strongly within Chile's beef industry, which is Chile's top import commodity sector throughout the world. For more information on what the CPTPP will mean for Canada's agriculture and agri-food sector visit the CPTPP for Agri-Food Exporters page.

The CPTPP Agreement, along with the Canada-United States-Mexico agreement (CUSMA) and free trade agreements with the European Union (CETA) and South Korea (CKFTA), will make Canada the only G7 nation with free trade access to the Americas, Europe and the Asia-Pacific region. All Canadian provinces and territories are expected to benefit from the CPTPP.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Resources

Market Overview – Chile
Global Analysis Report

Prepared by: Jonathan Inada, Market Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2019).

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