“Foods from Chile, Source of Life”

A long sliver of a country in southwestern South America, Chile’s striking, diverse geography never
ceases to surprise. Its bountiful agricultural valleys lie at the foot of the imposing Andes Mountain
Range, looking down on the Pacific Ocean. This long, thin country captivates visitors with its warm,
efficient and enterprising people, as well as with its democratic institutions and stable economy.

A mere 180 km wide on average, Chile is 4,300 km long from the border with Peru on the north to the
Strait of Magellan on the south. Sheltered by the Andes on the east and the Pacific Ocean on the west,
Chile is all but impervious to foreign pests and disease.

Chile borders on Peru to the north, Bolivia and Argentina to the east, the South Pole to the south and
the Pacific Ocean to the west. The north is rich in mining and marine resources. Central Chile, home to
the nation’s capital, is a major agricultural and industrial hub. In the south, rich fisheries and forest
resources are managed under stringent conservation and environmental protection standards.

Due to this characteristic, Chile has comparatives and competitive advantages that allow it to produce
food whose quality stands out from its competitors. The potential of Chile in the food industry is so
important to our country, that the agency in charge of promoting the export from Chile in the world,
ProChile, came with the campaign “Foods from Chile, Source of Life” an advocacy campaign that aims to
position Chile as unique origin of food production for the final consumer and for retailers and importers.
The campaign “Foods from Chile, Source of Life”
In an early stage the campaign was focus mainly in United States and to final consumers, because this is
the main export market for Chilean food and drinks. Seafood, fresh fruit, juices and wines are part of the
Chilean supply that today can be found in supermarkets and restaurants around the country.
However, now, we want to expand the reach of the campaign to new markets and to everyone that
works in the supply chain, since importers, to final consumer.

In recent years, Chile has emerged as one of the most important stakeholders in the food industry
worldwide, hoping to be among the top 10 exporters in this sector by 2020 (currently 17th) and also to
establishing itself as one of the few countries in the world where food sector has a high share of GDP,
more than 10%, after New Zealand and Belgium.

All these achievements are due to the commitment of the Chilean public and private sectors that have
managed to position the country as a reliable supplier of safe and innocuous food that meet the
stringent standards required by international markets.

In addition, Chile stands out worldwide as the largest exporter of blueberries, grapes, plums, prunes,
dried apples, trout and Pacific salmon, second largest supplier of avocados, fresh cherries, frozen
raspberries, walnuts and Atlantic salmon, besides having a renowned position for our wines and other
products such as extra virgin olive oil, mineral water, pisco and dried fruits, among others, which make
up part of the wide diversity of our exports which also include functional foods.

To all this is added the efforts as a country in the development of new marketing channels such as
organic products, as well as promotion for specific consumer niches like Muslims and Jews by
developing Halal and Kosher certified supply, respectively.

Finally, in recent years Chile has focused on making brand-specific work for the food industry, such as
fresh fruit, dehydrated products, pisco, salmon, mussels and others, which have been very beneficial for
the promotion of the industry abroad.

Why Chile?
Chile has comparative and competitive advantages that allow it to produce
food whose quality stands out from its competitors.

Within the comparative advantages the following may be included:

geographic isolation of the country (desert in the north, the Pacific Ocean, the
Andes mountains and the Patagonian ice) that makes it an island from the
point of view of health, decreasing the incidence of pests and diseases, the
Mediterranean climate is beneficial to obtain optimal raw material and
production and in a counter-season and phased production.

As for the competitive advantages the following stand out: economic and
political stability of the country that encourages entrepreneurship, the
modern infrastructure and export logistics, use of technology for the
production and processing of various products and compliance with demanding international standards
and certifications, and an extensive network of free trade agreements. All these factors make Chile a
reliable supplier of safe and quality food.

The quality of the food supply produced in Chile has achieved remarkable recognition according to the
latest Global Food Security Index 2013 prepared by The Economist Intelligence Unit, which placed the
country as the leader in Latin America

Chile is currently developing new products with higher added value oriented to niche markets, among
which include gourmet products such as olive oil, seafood delicatessen, and flavored mineral waters,
jams, wine jellies, dehydrated berries and native potato, some types of honey, premium wines, pisco
and microbrews.

During 2013 the total food exports reached USD 15.2 billion. Our main destination markets on the same
period were the United States USD 3.6 billion, Japan USD 1.4 billion and China USD 1.0 million.

It should also be noted that among the most traditional products, Chilean companies are innovating to
add value to its exports, as in the case of the salmon, pork, poultry, beef and sheep industry.

Distance to distribution centers today is not a limitation, since the greenhouse gas emissions related to
the transport of our products is substantially lower than those found in goods produced and sold in
Europe, mainly because 90% of our export is done by sea, which is 3.2 times more efficient than land
transport used within Europe and the United States.

Therefore, the carbon footprint of Chilean products is in general lower than products made and
distributed in Europe or America. ProChile is encouraging companies to measure their carbon footprint,
develop mitigation strategies using that information in marketing plans, thus providing brand value.

Chile, a Food Powerhouse

The strategy of "Chile Food Powerhouse " focuses on productivity achieved through innovation and
incorporation of technology, sustainable use of natural resources, production chains ranging from small
farmers to modern agribusiness; deepening competitive positioning in international markets, concern
for plant and animal health, food safety, and alignment of public and private sector with the food
agenda.

Chilean food Shipments to the world

In 2013, Chilean food and beverage exports to the world reached USD 15.2 billon.

Main food exports destinations (USD billion)

Countries USD 2009 USD 2010 USD 2011USD 2012 USD 2013 Var. Var. %
'13/'09 13'/09
USA 2.609 2.732 3.120 3.160 3.653 40,0% 1.043
JAPAN 1.260 1.365 1.855 1.754 1.491 18,4% 231
CHINA 227 309 515 769 1.024 350,1% 796
BRAZIL 402 554 622 723 923 129,2% 520
HOLLAND 398 438 551 551 668 67,6% 269
RUSSIA 207 308 351 417 643 209,9% 435
UK 490 541 597 568 583 18,9% 92
MEXICO 448 480 577 513 554 23,5% 105
SOUTH KOREA 240 253 376 408 431 79,6% 191
PERU 238 287 311 302 365 53,3% 127
OTHER 3.761 385 4.747 4.610 4.894 30,1% 1.132
TOTAL 10.286 11.123 13.627 13.781 15.233 48,1% 4.947
Source: ProChile with figures of Chile’s Central Bank

Around the world now:

- 16.9 million people drink a glass of Chilean wine daily
- 8.6 million people drink a glass of Chilean juice each day
- 7.4 million people eat Chilean seafood each day
- 6 million people enjoy Chilean salmon a day

Chile in world export rankings

Preserved food and purées
Chile is
3rd in canned peaches exports
4th in preserved cranberries exports
5th in preserved cherries for industry exports
5th in non-citric pulp exports
6th in fruit and vegetable pulp exports
7th in preserved cherries exports
7th in tomato paste exports

Dehydrated, fruits and nuts

Chile is
1st in exports of dried prunes
1st in exports of dried apples
3rd in exports of shelled nuts
3rd in exports of raisins
3rd in exports of hazelnuts
4th in exports of nuts with shell
8th in exports of dried bell peppers
9º en exportaciones de Almendras
Frozen foods
Chile is
3rd in exports of frozen berries
3rd in exports of frozen raspberries
5thin exports of frozen fruit
9th in exports of frozen strawberries

Juices and concentrates

Chile is
5th in exports of concentrated grape juice
5th in exports of concentrated apple juice
7th in exports of cranberry juice
1th in exports of non-citric juices

The Chile Food Chain

Fruit Industry

In a single decade, Chilean fresh fruit earned a name for itself as a world-
class product. As a result, Chile stands now as the Southern Hemisphere’s
largest shipper of fruit products.

Chile is surrounded on all sides by formidable natural barriers effectively

shielding it from pest and disease. As a long country, Chile has practically all
climates, from the scorching deserts of the north to the cold expanses of the
south. The result is the ability to grow a wide range of quality products,
including grapes, apples, pears, lemons, clementines, oranges, avocados,
kiwifruit, peaches, nectarines, plums, cherries, raspberries, strawberries and
cranberries, on over 320,000 hectares stretching throughout the length of
the country.

The fruit sector, encompassing over 9,000 growers and exporters, ships to more than 70 markets, mainly
in the United States and Europe. Key products include apples and fresh grapes, which alone account for
over 52 percent of fresh fruit exports. Wide recognition of Chile as a fruit fly-free zone has greatly
expanded the range of export products to other items, notably berries and citrus fruits. The Chilean fruit
industry has invested vast amounts on technology ensuring stringent quality controls. The intent is to
guarantee a product meeting every health, color, flavor, firmness and aroma standard. Technological
improvements have enabled new varieties, earlier crops, and improved quality and shelf life -a critical
factor when products have to travel great distances.
As an exporter country, Chile meets all Good Agricultural Practices (GAP) standards required by world
markets, as certified by recognized international institutions.

Chilean fruit exports

(US$ million) 2009 2010 2011 2012 2013 % Var.
‘09/’12
United States 1.339 1.580 1.588 1.477 1.646 23%
China 40 74 175 364 533 1249%
Netherlands 253 273 340 363 453 79%
United Kingdom 156 183 210 201 218 39%
Brazil 50 72 89 124 148 198%
South Korea 49 72 90 116 144 197%
Russia 81 115 124 106 139 72%
Colombia 61 85 94 123 137 122%
Taiwan 74 103 113 109 113 53%
Canada 31 52 67 68 82 165%
Others 747 870 1.030 962 936 25%
TOTAL 2.880 3.478 3.918 4.013 4.549 58%
Source: ProChile with figures of Chile’s Central Bank

Olive Oil Industry

Chile is a veritable agricultural paradise producing acclaimed wines and fruit

–a roster joined in recent years by extra virgin olive oil. Noted for being
naturally sheltered from pest and disease, Chile is free from the dreaded
olive fruit fly. It also boasts climate and soil conditions closely matching
those of the Mediterranean Basin, cradle of the olive tree.

Olive plantations extend from the Azapa Valley on the north to Malleco on
the south. This vast expanse is noted for fertile soils, high degree of sunlight
exposure, and significant nighttime/daytime temperature differentials -
conditions highly conducive to olive cultivation.

In addition to leveraging a propitious geography, the olive oil industry has

brought in leading-edge technology and a selection of the best olive
varieties. The result is a final product of outstanding quality that holds its own against the best in the
world. About 60 percent of Chile’s olive groves produce only extra virgin oil in single variety, blend,
organic, or conventional formats. Because of their nutritional properties, these products are in much
demand abroad.

During 2013 exports of this product totalized USD 44 million and destination markets were mainly the
United States (USD 16 million), Venezuela (USD 4 million) and Brazil (USD 4 million).
Exports of Chilean olive oil

USD million 2009 2010 2011 2012 2013 % Var.

09/13
United States 3 5 9 16 17 471%
Brazil 1 1 2 4 12 1752%
Italy 2 3 7 3 4 176%
Colombia 0 0 1 1 3 1481%
Canada 0 1 1 2 2 2835%
Venezuela 5 0 1 4 2 -63%
Spain 2 1 2 2 1 -46%
Japan 0 0 0 1 1 1313%
China 0 0 0 0 1 474%
Portugal 0 0 0 1 0 -
Other 1 1 2 2 2 145%
TOTAL 133 12 24 36 44 242%
Source: ProChile with figures of Chile’s Central Bank

Wine Industry

Chile’s outstanding winemaking conditions have translated into world-class

wines that gain new followers every day. Although you’d be hard-pressed to
find more suitable wine country than in central Chile, our wine valleys
actually extend for over 1,200 km north to south and benefit from both a
Mediterranean climate and a vast range of soils. In addition, Chile stands
protected by the Andes Mountain Range on the east, while the soft Pacific
Ocean breeze on the west helps regulate temperatures.

These features impart Chilean wines their exceptional quality and

personality, including their fruity nature, intense color and delicate aromas.

While Chileans have been making wine for over 450 years, the export
industry took off only in recent decades. With 3.7 percent of the total, Chile
stands today as the world’s eighth-largest producer and is widely
recognized for the number of its wineries, and most importantly, for the quality of its products. In recent
years Chilean wines have earned numerous accolades at highly prestigious competitions, including the
Decanter World Wine Awards, and the recognition of influential trade publications such as Wine
Spectator.

Chief among factors explaining the remarkable success of the Chilean wine industry are government
policies encouraging investment by prominent domestic and foreign entrepreneurs, a highly trained
workforce, world-class enologists, and cutting-edge facilities.

Growing competition from other beverages and producer countries is the most crucial challenge facing
the industry. Intent on keeping and growing their share based on higher-valued products, in 2002
leading wineries set up Wines of Chile, a trade association charged with designing and implementing
initiatives helping meet this goal.

Chile is now a well-consolidated member of the world wine industry. International acclaim and a
presence throughout leading markets eloquently speak to the industry’s competitiveness and the
consistent quality of its products.

The Chilean wine industry has set an ambitious goal for the coming decade: to become the Number One
producer of sustainable and diverse premium wines from the New World, reaching exports of bottled
wine of US$3 billion by the year 2020.

Wine Exports

(USD million) 2009 2010 2011 2012 2013 % Var.

‘09/’13
United States 242 243 273 299 287 19%
United Kingdom 218 237 235 228 238 9%
Japan 65 81 101 127 157 140%
China 54 83 92 145 150 177%
Netherlands 72 81 98 95 93 49%
Brazil 63 71 90 95 93 49%
Canada 77 90 94 93 92 19%
Germany 65 73 72 63 78 21%
Denmark 62 61 61 53 59 -5%
Spain 3 4 3 27 49 1777%
Others 466 532 585 580 596 28%
TOTAL 1.387 1.558 1.705 1.806 1.897 37%
Source: ProChile with figures of Chile’s Central Bank
**Bottled, Bulk and Sparkling are included

Pisco industry

In the late '90s, ProChile started to work with the Pisco Producers
Association, in order to give organized support to the international
promotion. Although pisco does not have the export levels enjoyed
by other drinks, such as wine, it has gradually gained importance
and generated interest in the world. Pisco can take advantage of
the reputation gained by Chilean wines to promote this distilled
product of the same origin.

Pisco is a product that generates a high impact in terms of employment and economic activity, mainly in
the Coquimbo Region. Thus, there are over 3,000 producers of pisco grapes, of which 90% is associated
within cooperatives in this region. In terms of consumption, the production of pisco is intended mostly
for the domestic market, which added to the international trend, creates an opportunity for industry
growth through its position abroad.
The 2020 plan developed by the industry involves all aspects of the pisco industry business plan, going
from diversification of supply to priority market segmentation and strategies.

Pisco Exports

COUNTRIES US$ US$ US$ US$ US$ % Var. US$

2009 2010 2011 2012 2013 '13/'09 Dif
13'/09
USA 186.138 498.758 363.967 646.912 879.219 372,3% 693.081
ARGENTINA 164.671 180.186 192.480 336.803 458.300 178,3% 293.629
RUSSIA 0 22.314 160.212 222.723 327.444 - 327.444
GERMANY 88.530 62.113 163.380 184.185 252.240 184,9% 163.710
UK 23.492 21.248 17.157 22.542 178.380 659,3% 154.888
FRANCE 63.194 19.733 106.479 758.038 174.490 176,1% 111.297
BRAZIL 16.652 97.205 68.891 67.238 172.503 935,9% 155.851
SPAIN 22.804 112.444 51.276 88.820 147.075 545,0% 124.271
CANADA 46.564 61.776 83.755 77.765 120.285 158,3% 73.721
CZECH REP. 0 4.000 0 0 90.003 - 90.003
OTHER 335.304 610.121 507.633 491.616 485.525 44,8% 150.222
Total 947.349 1.689.899 1.715.232 2.896.642 3.285.465 246,8% 2.338.116
Source: ProChile with figures of Chile’s Central Bank

Dairy Industry

The Chilean dairy industry benefits from an exceptionally disease-free

natural environment and a large herd efficiently managed by producers of
long standing.

Fresh milk production and processing is concentrated in southern Chile,

notably Biobío, Araucanía, Los Ríos, and Los Lagos. These regions, whose
unique beauty draws thousands of visitors each year, are noted for their
vast, green grasslands and rainy weather -ideal conditions for dairy
production.

Industry products include powdered milk, ripened and fresh cheeses, fluid
milk, butter, yogurt, dulce de leche, cream, desserts, whey powder, and
condensed and evaporated milk.

Chile ships dairy products to over 36 countries, including Mexico, Venezuela, Peru, the United States,
Syria, Cuba, Costa Rica, Guatemala, South Korea, Ecuador, Honduras, and El Salvador.

During 2013, Chile exported USD 219 million in dairy products. The public-private Dairy Product
Exporters Association (ExporLac) helps coordinate efforts to open up new markets, consolidate those
where standing trading arrangements exist, and generally improve access for Chilean products.
The industry plans to keep on serving the domestic market as well as expand into new high-demand
markets such as Japan, Russia, and Algeria. The basis of such expansion is a varied line of quality
products, notably assorted cheeses and powdered, whole, skim and condensed milk especially produced
with health concerns in mind. Chilean dairy producers intend to keep on gaining market share and
serving consumers who value reliable, wholesome, highly nutritional products.

Exports of dairy products

(USD million) 2009 2010 2011 2012 2013 % Var.
09/13
Mexico 40 60 55 50 54 35%
United Arab
Emirates 0 1 5 33 -
China 2 5 9 5 26 1600%
Brazil 11 17 22 19 -
Peru 12 16 15 12 18 43%
United States 5 12 14 10 12 155%
Venezuela 61 29 31 30 11 -82%
Costa Rica 6 8 9 7 9 41%
South Korea 1 2 9 5 8 847%
Colombia 1 1 14 35 5 299%
Others 13 22 34 19 26 98%
TOTAL 140 166 205 200 219 56%
Source: ProChile with figures of Chile’s Central Bank

Meat Industry

Chile exports more than 130 lamb, beef and poultry products to over 44
countries. Meat exports reached USD 923 million in 2013.

The efficiency and genetic quality of the Chilean industry easily meet or
exceed First World standards. Chile’s location and geographical features, plus
the concerted efforts of its animal health officials and livestock professionals,
technicians and businesspeople, have helped it attain international
recognition.

The industry uses sophisticated technology to produce a wide range of

quality products. Its vast production experience, well-honed competition
skills, and capacity for innovation have been key in its efforts to regulate
health and quality standards and secure access to discriminating markets.

Chile is free from all animal diseases in List A of the World Organization for Animal Health (OIE),
including Bovine Spongiform Encephalopathy (BSE). It is also free from the avian flu and has stringent
barriers in place to keep out this and other diseases.

Chilean meat exports

(US$ million) 2009 2010 2011 2012 2013 % Var.
09/13
Japan 146 166 234 211 188 29%
South Korea 115 102 114 129 88 -24%
China 15 21 41 60 79 414%
Mexico 81 67 66 71 77 -6%
Russia 4 8 18 59 58 1373%
United States 28 49 39 52 57 102%
United Kingdom 57 65 81 67 55 -3%
Colombia 15 19 31 40 41 178%
Germany 51 48 72 50 38 -26%
Puerto Rico 1 2 15 23 30 2939%
Others 263 241 275 245 214 -19%
TOTAL 776 788 986 1.008 923 19%

Source: ProChile with figures of Chile’s Central Bank

Chile, a Fishing and Fish Farming Country

Chilean fisheries and aquaculture have grown exponentially in the last 30

years, resulting in strong production and international positioning. Chile is
known the world over for an extensive coastline, pure waters, and highly
nutritional marine resources. The temperate waters of central and northern
Chile and the cold seas of the south provide a wealth of resources for both
industrial and small-scale fishing.

In addition to natural advantages setting Chile apart as a fishing

powerhouse, industry efforts to increase quality have been key in helping
Chile gain market share.

During 2013 the seafood industry exported USD 4,717 million. Destination
markets were mainly the United States, Japan and Brazil.

In addition to an ongoing concern for quality, a key factor contributing to Chilean competitiveness is
private sector and regulator commitment to sustainability, quotas, and temporary bans. Chilean exports
use traceability systems from start to destination. Extensive research has made production growth,
resource diversification and new product creation possible.

Chile stands out for the vastness and variety of its marine resources. Three large fishing zones exist on
its extensive coastline.

Northern species include anchovies, mackerel, sardines and jack mackerel. South-central species include
common hake, shrimp, cuttlefish, and more recently, giant squid. Southern species include common
hake, pink cask-eel, Patagonian whip hake and Chilean croaker, as well as bottom-dwelling resources
such as sea urchins, clams, abalone, and razor clams.
Chilean Seafood products exports

(USD million) 2009 2010 2011 2012 2013 % Var.

09/13
United States 674 557 836 939 1.277 90%
Japan 956 1.016 1.392 1.264 993 4%
Brazil 194 256 294 326 498 157%
Russia 54 83 107 117 307 471%
China 106 112 176 161 215 102%
Spain 177 165 209 156 144 -19%
France 115 86 106 94 103 -11%
Germany 90 36 56 43 93 3%
South Korea 39 32 100 69 77 98%
Nigeria 55 16 53 95 935 46%
Others 639 582 779 729 935 46%
TOTAL 3.099 2.942 4.108 3.993 4.717 52%
Source: ProChile with figures of Chile’s Central Bank