Chile as a Fruit Producer

Since the 1980s, the Chilean fruit industry has experienced dramatic growth due to the implementation of a successful internationalization strategy based on open and free tradei, as well as its comparative advantages – counter-season production, our mild Mediterranean-style climate, coupled with natural phytosanitary protection and high regulatory standards, which have made it one of the global leaders in the production and export of fresh fruit around the world.

Chile is not only producing high quality fruit that is in line with an international trend towards healthy eating, but also fruit of the type and condition to withstand ocean transport to the rest of the world.

As a result the Chilean fruit industry has gained global importance, especially in the sub-sectors of production of fresh non-tropical fruits (table grapes, apples, plums, peaches, avocados, kiwis, raspberries, cherries, etc), canned fruit, dehydrated fruits, wine and seeds.

Although the relative size of the Chilean market is small compared to other countries, it's many trade agreements open new markets around the world, making Chile an attractive investment platform in this industry.

Increasing Demand for the Finest Fruit

The Chilean Food and Drink exporting sector has gradually become one of the cornerstones of Chile's economic development, making up 16% of all exportations in 2011. The industry is valued at US$12.495 billion (FOB) in 2011, with fresh fruit and dried fruit composing 23% and 2%, respectively, of this total.ii

The main fruit export markets are United States (28%), Asia (28%), European Union (24%), South America (18%) and Africa (2%).iii

Notably, in the wake of the signing of the Free Trade Agreement with China, fruit exportations to China have increased eightfold in the last 5 years.iv

Year 2005 2006 2007 2008 2009 To August 2010
US$ (000) 4,257 8,248 15,934 25,220 21,794 34,471

As the world's largest consumer of fruits and vegetables, with a growing appetite for high quality produce, China is an expanding export market for Chile.

Notwithstanding the huge potential for growth in the exportations of fruit, Chile has a strong internal demand for fruit that will allow for sustainable production in all economic cycles.

Opportunities and Potential for Growth

Improving competitiveness is the major challenge for the Chilean fruit agribusiness. To meet the proposed challenge, there are opportunities for investment in different areas, such as:

  • Improved management of the fruit industry investment portfolio: increasing the share of premium and high-value varieties, such as organic products, cherries, red apples, Red Globe grapes and avocados.
  • Diversification of Fruit Species: introduction and development of new premium and high-value varieties through offshoring, biotechnology, royalties and nurseries, etc. A prime example is the golden-fleshed kiwifruit now known as ZESPRI® GOLD Kiwifruit, which was developed in New Zealand and marketed successfully in Asia.
  • Branding: it is critical to create awareness in the importing country's market if a fruit exporter wants to become a powerful presence. In China, most people don't even know where Chile is. One way to advance in this sense is to create collaborative strategies at an industry level . In Chile, there are a large number of small or medium size producers trapped in low-value, undiversified and saturated markets. As companies focus on the ever-increasingly lucrative Chinese market, they will benefit from an opening to both foreign and local capital injections, which will allow them to focus on marketing, branding and onsite commercial representation.
  • Achieving enhanced quality in the final product by introducing greater value added processes to the value chain: irrigation technology, traceability, biosafety, biofertilizers, conservation equipment, environmental and quality control equipment and systems, processing plants for dehydrated and frozen products, pulp, juices, concentrates and canned fruits, packaging, waste treatment, etc.

Michael Grasty is a principal and founding partner of Grasty Quintana Majlis & Cía. www.gqmc.cl

His multinational background has allowed him to develop a successful professional career in the area of corporate law, advising national and international clients in diverse areas, such as agribusiness, energy, retail and international arbitration, among other. In relation to agribusiness, Michael has been involved in different projects, including Procarne, the first Chilean company that classified the quality of beef, Berries La Unión S.A., the company that introduced the production of berries in Southern Chile, B.P. Nutrition in their purchase of what today is the largest Chilean salmon producer, Bucalemu Berries, a local producer of berries and he is currently President of the Board of Directors of David del Curto S.A., one of the main Chilean fruit export companies.

Contact Details:

mgrasty@grasty.cl

Tel: 56-2-499 0403.


i Chile is party to 25 Free Trade Agreements, including a Free Trade Agreement signed with China that entered into force on 1 October 2006. All Chilean fruit will enjoy a zero tariff, but for most fruits this tariff will be phased in over 10 years through to 2015. Cherries and plums already enjoy a zero tariff, and comprise 21% and 10.8% of the exportations to China, respectively.
ii Elaborated by the Chilean Export Association (ASOEX) from statistics originating from the Central Bank of Chile and ProChile, 2011.
iii Ibid (i).
iv Elaborated by ASOEX from statistics originating in Prochile, 2011.

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Michael Grasty C.

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