The changing structure of Chile's raisin industry

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The changing structure of Chile's raisin industry

Chile's raisin industry has witnessed significant growth over recent years, with export values rising from US$88 million in 2007 to US$168 million in 2011. Despite an excessive amount of links in the industry's supply chain, it has benefited from a favorable counterseasonal market and reduced production in the Northern Hemisphere. At, we speak with Chilealimentos raisin committee president Juan Eduardo Laso about the challenges ahead, and a need to approach the fruit in a different way.

Juan Eduardo Laso

The changes taking place in Chile's fresh grape sector are having a potent impact on the country's raisin production. With increased competition from the likes of California, Peru and Brazil, growers are looking at new ways to turn profits.

Laso says as the sector continues to be pressed it is likely that grape growers will be filtered into two categories: those who produce for fresh and those who produce for raisins.

"The fields growing the best grapes will continue growing for fresh fruit, but for fields with water problems or older plants that are not so apt for fresh grape production, markets have become more demanding," he says.

For the Northern Hemisphere industry this is quite a logical conclusion, but Laso highlights the birth of Chile's raisin industry has been very different to in other parts of the world.

"The genesis of our business was from discards, whereas the genesis for their (U.S., Turkey, Australia, South Africa) business was a choice; what we have been doing over the last five years is to fundamentally change the situation so that raisins are a business of choice, rather than from what's been cast aside.

"The business of raisins started absolutely as a sub-product. Grapes for raisins raisins were gifted to the farm administrators, and they sold to a third party trader, and this trader then sold to an exporter.

"Today something like this still exists. Now they are not gifted, but they do sell to traders who dry the raisins and sell to an exporter."

He says this system of passing the fruit through many hands adds time and cost to the industry's business model, which has led his company to push to narrow the gap.

"What I see is that we will as an exporting company, we will incentivize growers so they become raisin producers, so that directly we can buy raisins of them and export, because in both Turkey and the U.S. it is the grape growers who dry the raisins.

"The reason for that is that there is a high cost. In Chile, we take the grape from the grower, it’s cut, put up in the truck which might travel 200km – the raisin is dried and then sent to the exporter. It’s a brutal cost."

Laso doubts an association of growers will create a processing-exporting company, but does believe the industry can improve its focus.

"The first big change has been in the south, from Santiago to Rancagua, where there are growers that have left fresh grapes for raisins - we have some growers who have left fresh grapes 100% for raisins."

Jumbo growth

Chile has been lucky with the market showing a preference for jumbo raisins over the years

"When we started this business, having jumbo raisins was a thorn in your side, it was very difficult, because the world was used to medium-sized raisins.

"However, in recent years the snack market for raisins has come up and the jumbo has had an incredible entrance in the market; now people are paying more for the jumbos than for the mediums, which is the reverse of how it's been historically.

"But at the moment medium-sized raisins are being well-received, and what this means is that you need to be very alert to the changes in the market trends."

In terms of consumer demand, Laso highlights that markets the world over - both developed and emerging - are becoming more attracted to healthier food, which is an advantage for raisin exporters.

"Like other dried fruits it is extremely healthy, rich in antioxidants; why in Chile do we say raisins are good for memory? Not because of the folk tale, which it is, but because the root of that is that raisins have very high antioxidants, and that’s very good for memory.

"Emerging markets are all new markets for us, because people want natural fruit, healthy fruit, and there is a space to grow - serious work is needed to deliver good fruit to these markets, and I think it’s a good complement to fresh fruit."

Chile has raisins all year, but exports lower volumes during December, January, February and March due to the high level of shipments from the Northern Hemisphere. Its export volumes start to rise in March before hitting peak volumes in June, with volumes dropping off until December.

"The great advantage of dried fruit is that you can wait. It's not like fresh fruit where you have the biological timing of the fruit and you have to send very quickly.

"If you learn how to control some characteristics and some points in the processing chain of the fruit, raisins can sit for a year without problems; if you manage the critical points, you can easily manage when and where you would like to export."

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