Professional Internship Report Analysis and Trends of Colombian Wine Market

Professional Internship Report Analysis and trends of Colombian wine market

Harold Ramirez Salazar

Dissertation to obtain the degree of European Master of Science in Viticulture and Enology

Advisor: Prof. Francisco Gomes da Silva.

Jury:

PRESIDENT :PhD Jorge Manuel Rodrigues Ricardo da Silva, Full Professor at Instituto Superior de Agronomia, Universidade de Lisboa.

MEMBERS: PhD Luca Rossetto, Associate Professor at Università degli Studi di Padova; PhD Manuel José de Carvalho Pimenta Malfeito Ferreira, Assistant Professor with Habilitation at Instituto Superior de Agronomia, Universidade de Lisboa; PhD Francisco Ramos Lopes Gomes da Silva, Assistant Professor at Instituto Superior de Agronomia, Universidade de Lisboa.

2017 - 2019

1 ACKNOWLEDGEMENTS

I owe the success of this study to the availability of the different people who worked with me in different places in Colombia, all the professionals I has the opportinity to talked with and obviously M Jacques Pierre Lamat to whom my mission was attached.

They gave me technical details about how the different regions, category of people and kinf of markets I was studying about, their information was valuable when I had to go on the field , but also to better understand how to organize my time and prioritaze what is important and what is not. I would like to thank the entire team of the Sales Department for their welcome and their contribution to the smooth running of my internship.

More particularly, I would like to thank M. Marlon Giraldo, key Account sales Manager and the person in the company I worked longerto, for his warm welcome within the company, his supervision, his patience and his attention, throughout my thesis.

After these five months, I was able to appreciate the importance and richness of the teaching provided by the professors at “Montpellier SUPAGRO and Universidade de Lisboa as Carlos Lopes, Jorge Ricardo, Laurent Torregrosa, Sofia Catarino, among others excelent researchers.

They have enabled me to acquire the necessary know-how to face the demands of the business world, and thus more easily integrate an environment that was hitherto unknown to me: Internet commerce. In particular, I would like to thank M. Patrice Lallemand , Director of the Master's Degree.

In addition, the training I received during these years allowed me to be at the forefront in a labour market that is becoming increasingly complex following the various economic crises that the world has experienced in recent years. This undeniably influences the hiring policy of companies that are not only looking for a competent professional, butalso a person ready to give the best of themselves to accomplish all the tasks entrusted to them within the company.

2 I would also like to thank all the people with whom I have had the opportunity to learn and collaborate (sales team and technical team), for facilitating my integration into the team and for the many advices and explanations they have given me since my arrival.

Finally, I would like to thank Edwin Zuluaga for his review of this thesis and for helping me to clarify the expression of my thoughts as the help in order to achieve this work on time and all the requirements needed.

3 ABSTRACT

Colombia has an advantageous position in Latin America, in fact, having left the sea at two oceans Atlantic and Pacific, Colombia is a crossroads where several cultures mix, thanks to this geographical position Colombia has developed in recent years maritime routes in order to become a destination not to be missed not only by tourists but also by the routing of goods

Otherwise, in the southern cone countries (Argentina-Chile-Uruguay) Colombia is not a traditional wine-growing country, although in two regions of the country there is wine production, but this production remains very small from a volume and quality point of view, despite the efforts made in recent years by some winegrowers. Despite the increase in consumption in recent years, Colombia remains out of reach in terms of wine, with a culture that is not very interested in the pleasures of wine.

The purpose of this work is to show an in-depth overview of the current state of consumption and prospects for the coming years, detailing the strengths, weaknesses and opportunities of the market, to understand these economic analyses it is essential to take into account the social and political panorama that has been constantly changing in Colombia in recent years.

Despite Colombia's undeniable economic advantages, the migratory waves not only of Venezuelans but also of Colombians living in remote regions of the country will ensure that in the coming years the public authorities act consistently to avoid a collapse of large cities.

In order to understand this work as well as possible, it is essential to take into account that politics and economics are closely linked because one does not exist in the other and above all it is politics that shapes the way a country is conducted economically, which is why this book analyses amply all the aspects that are part of society.

Key words: Wine, market, education, policies, economy taxes

4 RESUMO

Colômbia tem uma posição vantajosa na América Latina, de facto, tendo ligacào com dois oceanos Atlânltico e Pacífico. É uma encruzilhada onde várias culturas se misturam. Graças a esta posição geográfica Colômbia tem desenvolvido nos últimos anos rotas marítimas para se tornar um destino a não ser pedido não só pelos turistas, mas também pelo roteamento de mercadorias.

Por outro lado, a Colômbia, diferente dos países do cone sul (Argentina-Chile-Uruguai), não é um país vinícola tradicional. Embora em duas regiões do país exista produção de vinho, esta produção continua a ser muito pequena do ponto de vista do volume e da qualidade, apesar dos esforços realizados nos últimos anos por alguns viticultores. Apesar do aumento do consumo nos últimos anos, a Colômbia continua fora de alcance em termos de vinho, com uma cultura pouco interessada nos prazeres do vinho.

O objetivo deste trabalho é mostrar uma visão profunda da situação atual do consumo e das perspectivas para os próximos anos, detalhando as forças, fraquezas e oportunidades do mercado. Para entender essas análises econòmicas é essencial ter em conta o panorama social e político que tem vindo a mudar constantemente na Colômbia nos últimos anos. Apesar das inegáveis vantagens económicas da Colômbia, as ondas migratórias, não só dos venezuelanos, mas também dos colombianos que vivem em regiões remotas do país, garantirão que nos próximos anos as autoridades públicas actuem de forma coerente para evitar um colapso das grandes cidades.

Para entender este trabalho o melhor possível, é essencial ter em conta que a política e a economia estão intimamente ligadas porque uma não existe na outra e, acima de tudo, é a política que molda a forma como um país é conduzido economicamente, razão pela qual esta pesquisa analisa amplamente todos os aspectos que fazem parte da sociedade.

5 RESUMO ALARGADO

Do ponto de vista demográfico, a Colômbia é a quarta maior potência da América Latina, depois do México, Brasil e Chile. Nos últimos anos a sua população aumentou a um ritmo constante de 4%, o que sugere uma população que está a ser renovada e, portanto, um mercado para o futuro, que pode ser explicado pela indústria vinícola. No entanto, para explorar plenamente este mercado, é estritamente necessário criar uma cultura autossuficiente de vinho e gastronomía. Apesar dos esforços feitos por alguns importadores nos últimos anos, os colombianos continuam a recorrer a outras bebidas, como cerveja, rum e até mesmo sumos de frutas, que na Colômbia podem ser considerados um produto substituto do vinho.

Certamente, nos últimos anos os colombianos têm consumido mais vinho, mas são os vinhos de baixa qualidade que inundaram completamente o mercado. O preço da garrafa custa em média o equivalente a 5 euros, razão pela qual é tão difícil importar vinhos do velho continente. O transporte e os impostos que lhes são impostos deixam estes produtos à sombra quando se trata de competir com vinhos chilenos e argentinos. Com o mercado de médio alcance sendo muito pequeno e pouco atomizado permanece um mercado restrito, disponível apenas para grandes importadores.

A Colômbia continua a ser um país muito instável do ponto de vista econômico e social, com uma renda per capita de 6999 dólares por ano, um salário mínimo que mal chega a 350 euros por mês, e uma taxa média de trabalho informal de 50% do salário. A população tem pouco tempo para descobrir e aprender coisas novas, além disso, com a recente crise, cerca de 2.000.000 de nossos vizinhos vivem em sua maioria ilegalmente no país, e a delinquência, a pobreza e a miséria só aumentarão nos próximos anos.

Além disso, o tratado de paz assinado há mais de dois anos pelo Estado colombiano está suspenso por causa de numerosos problemas de financiamento, mas também por causa dos compromissos de ambas as partes para alcançar a meta final de paz para o país. Um país que vive uma guerra devastadora de mais de 50 anos e que deixou mais de 8 milhões de pessoas deslocadas internamente nas últimas décadas. Nos últimos anos o

6 consumo de vinho na Colômbia estagnou, certamente entre 2006 e 2016 o crescimento foi exponencial, passando de dois copos por ano para 1,5 litros em 2016.

As últimas reformas fiscais aumentaram consideravelmente os impostos sobre as bebidas importadas, incluindo o vinho, pelo que o preço aumentou entre 25 e 40%, o que constitui uma das razões pelas quais o consumo não aumentou.

No entanto, nos últimos anos, graças ao boom turístico, os colombianos tiveram uma maior abertura às culturas estrangeiras, especialmente à cultura europeia Estes recém- chegados trouxeram a sua própria cultura, incluindo o vinho, e com isso, novos vinhos chegaram à Colômbia e a cultura do vinho está a começar a crescer.

Para aproveitar este novo impulso é muito importante apostar na educação de novos consumidores, promovendo o consumo responsável e ensinando aos consumidores de vinho os benefícios do consumo moderado e informado. O conhecido paradoxo francês pode desempenhar um papel muito importante na integração diária do consumo de vinho e assim desfrutar de uma população que é jovem e, portanto, tão bem educada, torná- los consumidores potenciais durante várias décadas.

A Colômbia não é um país produtor de vinhos, ao contrário de países como o Chile e a Argentina, onde o vinho faz parte da cultura. A cultura vitivinícola acaba de regressar à Colômbia há apenas dez anos, por isso continua muito jovem e, ao contrário dos países europeus, o consumo da bebida do Deus Dyonisios está difundido entre todas as classes sociais. Na Colômbia o vinho permanece um produto para as classes altas, intelectual e artística, embora nos últimos anos este consumo se tenha alargado à classe média, sendo ainda muito difícil substituir os hábitos de consumo. Na Colômbia as refeições são geralmente acompanhadas por sumos de fruta ou refrigerantes.

De acordo com as previsões mais otimistas, o consumo de vinho na Colômbia aumentará nos próximos anos, graças a uma conjuntura econômica favorável, mas os últimos indicadores sociais mostram um aumento da pobreza e da precariedade, especialmente nas cidades fronteiriças com a Venezuela e a capital colombiana, Bogotá.

7 Outro caminho de desenvolvimento que pode ser interessante explorar no futuro para o mercado vitivinícola colombiano é o enoturismo. Este é um fenômeno que está se tornando cada vez mais importante na Colômbia graças ao boom do turismo, mas que ainda não encontrou seu lugar. Também é muito raro para os comerciantes ou comerciantes de vinho se envolverem neste tipo de atividade.

No entanto, com uma classe média emergente, o consumo de vinho pode continuar a aumentar. A chave está na educação, pois é muito importante desenvolver o gosto pelo vinho nas gerações mais jovens, e assim fazer com que o consumo de vinho na Colômbia se torne parte da vida cotidiana.

O objetivo deste estudo é mostrar uma visão geral do mercado de vinho na Colômbia e as possíveis chances de estabelecer uma cadeia de distribuição de vinho europeu na Colômbia, além de revelar as preferências dos colombianos quando se trata de beber vinho.

O consumo de vinho na Colômbia continua muito baixo, mas com um forte potencial de desenvolvimento, pelo que é muito importante que os próximos anos sejam dedicados à consolidação de uma estratégia de marketing e comunicação, beneficiando assim de um mercado que pode tornar-se um dos mais importantes da América Latina. Para integrar o vinho na cultura do país, como se faz em países tipicamente produtores como a Argentina ou o Chile, seria necessário não só um investimento muito significativo em publicidade e comunicação, mas também que as autoridades públicas se envolvam para dar a conhecer os benefícios do vinho e difundi-los junto da população em geral.

A distribuição é um grande desafio para as empresas como adegas. Será cada vez mais assim no futuro, com o desenvolvimento da tecnologia, actividades online, e porque a Internet oferece possibilidades quase infinitas aos compradores mas também aos vendedores. Apenas aqueles jogadores que são capazes de se adaptar à mudança permanecerão no mercado, mesmo sendo o vinho considerado um bem tradicional. Os consumidores preferem comprá-lo em uma loja, e em poucos anos a internet poderia se tornar a maneira mais fácil de vender vinho não só para a geração mais jovem, mas para

8 todos os amantes do vinho

Finalmente, o que podemos concluir é que, apesar do entusiasmo dos últimos anos pela paz e consolidação econômica, a Colômbia continua sendo um país onde fazer um investimento de longo prazo (exceto matérias-primas e petróleo) é um grande risco porque a tributação não é estável e a taxa de corrupção é comparada à dos países da África Subsaariana. A qualquer momento o país pode voltar à guerra civil.

A Colômbia mantém alguns ativos, incluindo o boom do turismo e da abertura da população para países estrangeiros.

Keywords: Vinho, mercado, turismo, importaçoes, precios, política

9 TABLE OF CONTENTS

ACKNOWLEDGEMENTS 2 ABSTRACT I 4 RESUMO 8 1. INTRODUCTION 13 2. METHODOLOGY 19 3. A PROMISING BUSINESS IN A HOSTILE ENVIRONMENT 22 4. PEST ANALYSIS 24 4.1.POLITICAL FACTORS 24 4.2.ECONOMIC FACTORS 25 4.3.TECNOLOGICAL FACTORS 26 5. COLOMBIAN WINE MARKET, BIEW FROM A PESTEL ANALYSIS 28 5.1.COLOMBIA IN A VERY DIFFICULT MACRO-ENVIRONMENT 28 5.2.NUANCED BY THE MESO ENVIRONMENT 31 5.3.THE MICRO ENVIRONMENT MARKED BY VERY STRONG COMPETITION 33 6. SWOT ANALYSIS 37 6.1.STRENGHT 37 6.2.WEAKNESS 37 6.3.OPPORTUNITIES 38 6.4.THREATHNESS 38 7.IMPLEMENTATION OF A BUSINESS DEVELOPMENT STRATEGY 39 7.1.THE STEPS TAKEN TO INCREASE WINE CONSUMPTION IN COLOMBIA 40 7.2.COMMERCIAL PROSPECTING NECESSARY FOR THE SUCCESSFUL DEVELOPMENT OF TRADING 42 8.NEW CHALLENGES TO ENSURE THE SUSTAINABILITY OF THE WINE CONSUMPTION IN COLOMBIA 47 8.1.DISTRIBUTION CHANNELS TO BE ADDRESSED IN THE SHORT AND MEDIUM TERM 48

10 8.2.DEVELOPMENT OF AN EFFECTIVE ENVIROMENT TO BOOST WINE CONSUMPTION 54 8.3.CURRENT COMSUMPTION IN COLOMBIA, WHICH WINES ARE MORE CONSUMMED .. 56 9. PORTER'S FIVE FORCES 60 10 DIMENSIONS OF THE MARKET 64 10.1.CONSUMER PROFILE 65 10.2.SALES CHANNELS 69 10.3.SOME CHARACTERISTICS OF THESE DISTRIBUTION CHANNELS 73 11. PHYTOSANITARY REQUIREMENTS 76 CONCLUSION 78 BIBLIOGRAPHY 81 APPENDIX 84

11 LIST OF TABLES AND FIGURES

• Sociological-demographical profile of Colombia (Table I) • Taxe table in Colombia for alcoholic imported beverages (Table II) • Graphic N° 1: Climatic precipitations on Colombia 2018 • Graphic N°2: Wine market expectations by 2020 • Graphic N°3: Most important wine companies by sales for US$ dollars year 2017. • Graphic N°4: Consumption by varietal (% of total volume -2017) • Graphic N°5 Wine consumption in Colombia 2017 • Graphic N°6 Which Country produce de most quality wines • Graphic N°7 Price increase due to the new taxes applied in 2016 by the Colombian Gouvertment. • Graphic N°8 How much money are you willing to pay for a bottle of wine? • Graphic N°9 Where would you buy a bottle of wine?

12 1.INTRODUCTION

Before to get in to the essential topic of this thesis, I would like to give an overview of what is the panorama in Colombia to produce wine. Colombia it does not have the climatic conditions required to cultivate the vine, that’s why it does not have the capacity to produce wines with the same quality standards as others vine producers countries as Portugal, South Africa, New Zealand and so on, since those country have particular characteristics that allow them to produce a great variety of wines with unparalleled flavors.

The characteristics of soil and climate of Colombia define a great difficulty for the cultivation of the vine. That is why wine producing companies import grape must and ferment it, adding alcohol. The result is a wine of very poor quality and obviously very cheap, which is why consumers prefer imported wines.

Internally, Colombia does not have the appropriate climate for wine production, however, has some areas in the country that have certain climatic similarities required for the cultivation of vines. Boyaca This region of the country is particularly special for the cultivation of vines due to two essential factors, the altitude and the amount of rainfall.

There are projects for the cultivation and production of quality wines, as Aim Karim vineyard, which is located in the municipality of Sutamarchán-Boyaca 140 km north of Bogta the capital of Colombia. The highlands above 2100m are cultivated with Chardonnay, Cabernet Sauvignon and Sauvignon Blanc vines, brought from France,

The vineyard located in one of the dryer regions of the Cundiboyacense highlands, began to produce wines since 1998 and today “ has around 50 hectares of vine which produce around 150 hectoliters of wine” 1 each harvest. The vineyard has become an entire laboratory, where dozens of professionals develop their degree theses with the technological collaboration of several European countries.

1 Newspaper « El TIEMPO » 24 April 2017, appearing in the economics section of it 13 This region of the country is particularly special for the cultivation of vines due to two essential factors, the altitude and the amount of rainfall. With an approximate altitude of 2600 meters, these regions are in a situation at sea level similar to wine regions of France and Spain. “On the other hand, with consolidated rainfall ranging between 820 and 850 millimeters of rainfall per year, conditions achieve some similarity with French lands” 2

Graphic N°I: Climatic precipitations on Colombia 20183

This economic thesis trend to presents a review of the wine industry in Colombia, emphasizing the behavior of the consumers. In the same way, recognition of the main wine exporters worldwide, from Latin America, Europe Oceania and so on. After the wine importers analysis, strategies could be implemented in order to impulse and consolidate of the wine trade in Colombia.

The wine market is changing rapidly. Indeed, there are two opposing perspectives. The first, sees the wine sector with a pessimistic eye. If we look at the case of the wine traditional countries, where the consumption is stagned, many issues can be a source of concern.

2 Auby, J.F , La économia del vino,crisis y remedios, Edition Alfaguara, 2012, 173 pages 3 https://www2.sgc.gov.co/Noticias/Paginas/Comunicado-Nacional-de-las-Condiciones- Actuales-de-El-Ni%C3%B1o-La- Ni%C3%B1a---Marzo-2018.aspx 14 While the prices of the great wines have soared, especially for the last five vintages, making the most prestigious wines totally inaccessible to the population, the prices of the small wine states are constantly being pushed down so that it becomes very difficult for their owners to survive.

« Bankruptcies are increasing among the small importers are even the one which were already good stablished in the market. In the past years 24 wine importers have closed their companies, “La mesa de los señores “ the most iconic Brand of import wine in

Colombia wil not survive 2019”44

While supermarkets are playing an increasingly important role in the marketing of wines, accounting for nearly 90% of the distribution to be carried, including hard discount, it remains complicated for wine merchants to be able to respond, particularly in terms of price, since they cannot benefit from the power of super markets' purchasing centres. It is then necessary to adapt by playing the differentiation card (advice, original wines, tastings...) in order to face the large distribution.

Another major problem, which arises in new consumer countries and particularly in Colombia, is the increase of the taxes and the way they are being calculated, they are calculated by the consumer’s price and not the price of the importer, which arise the price exponentially.

Even if between 2006 to 2016 the consumption has increased rapidly. The past two years the consomption has stagned, that can be explained not just because of the taxes increase, but by the development of public health policy (Law one glass only restricting. advertising for example). Restricted road safety policies (limitation to 0.5 g/litre) but also by sociological changes : urbanisation, shorter lunch breaks, less traditional dinners than before and above all the crisis that has been going on since 2008, in the next figure you will see the wine wine consumption expectatives in the coming years.

4 Newspaper « El TIEMPO » 27 March 2019, written by Thierry Ways 15

Graphic N° II: Wine market expectations by 20205

All these factors contribute to the drop in wine consumption. In order to avoid it, we must react effectively, by adapting marketing. This is how wine tourism develops in order to educate consumers, it will be necessary to do prevention in order to promote its wines...

The second perspective of the wine market, on the other hand, is much more optimistic. Indeed, new opportunities are emerging. Whether it is at the level of technologies, with the Internet in particular, which allows a very rapid development of online sales. The Internet has become a real communication interface for wine professionals, allowing them to reach a very large number of consumers in a short period of time.

The development of smartphones can be a key factor in the coming years. Apart from the

4 5 Overview of Latin American and Colombia Wine MarketInfography : Mabel Flores B S 16 many applications dedicated to wine, these are increasingly used for purchases, and it is necessary to adapt to them now in order to be able to take advantage of them.

As we will see in more detail in this paper, various opportunities and threats weigh on the young colombian wine industry. That is risky but not unthinkable to develop a young business in Colombia. This is the ambition of the new young importers, they are opening wine rebars, this young business is booming in Colombia and especially in the regions of Bogota, Barranquilla and Medellin, the second largest city of the country.

The whole issue today depends on its commercial development. Whether at the level of customers, the distribution network, promotional operations, importers are implementing campaigns to increase the interest of wine. Meanwhile there is a problem entrusted to the implementation of a commercial development strategy at the colombian market.

As a fundamental part of the study, I would like to find the possible causes of the limited consumption of wine in Colombia, by means of an analysis of the current environment, as well as an approach to current statistics, and a review of the recent tariffs imposed on the product and its possible impact on the growth of the wine market.

An essential part of my work is consacrated to understand and be a part in the colombian wine industry participating in conferences, trading wine, making payed wine tastings, I want to explain the readers which is the process to import wine in Colombia, before consumers see a wine in the supermarket, at least 9 months of bureocratic procedures in Colombia have been passed, is an expensive process and very annoyed because there are many requirements to fill up, plus the slowly work of colombian public servants, corruption and so on is a unpleaseant work.

Oncethe Importing and legalizing procedure is done, you can start to distribute your wine, meanwhile you have to chose the región you want to sell your wine in, because each of the 32 differents regions have different policies, you just can sell the wine estamped in the región choosen. That makes very difficult to the importers to sell their stock they have to pay a lot of taxes to acces to the market, and since the highrodes in Colombia are very

17 deteriorated is more expensive to travel (Cartagena-Bogota 1200Km by truck) than (Shangai-Cartagena 7000km by boat)

Why the Colombian wine market has not taken off, despite all addverstising, investment made in the past years? Colombians consumme more wine but low quality wine that’s why europeans wines can not be democratizied in Colombia, the Price is discriminatory. Anyway is still posible to live from wine importing in Colombia, but to do so its is necessary to implemented many strategies that would be disscussed on this study.

In fact, the target of this study is to do a radiography of the colombian wine market , show its trends, and the possibilities to set up a wine importing company on the incoming years , in order to analyse the market many tolols were used, between them, reunions which the professionals of the vine secteur, as wine specialist, and y own personal experience.

18 2.METHODOLOGY

In order to analyze and develop my subject of study, I was pushed to meet profesionals on the wine secteur in Colombia, as visited different vineyards in Boyaca a department north of Bogota, thanks to my previous experience importing wine in Colombia I had the chance to get involved with all the bureocraric process to imported and sell wine in Colombia.

In two ocassions I met Roberto Pumarejo president of the grupo “ Exito Colombia” owned by Casino France, they sold more tan the half of the wines consumed in Colombia, he explained me how along the past years wine consumption in Colombia has certeanly increased exponentially, between 2007-2018, reaching nearly 3 liters per capita/ peryear, but very far away compare to other latino american countries as Argentina ore ven Peru.

Nevertheless, the past three years have been the hardest for wine importers, besides the devaluation of the Colombian peso nearly 30% compare 2015, the taxes decided by the colombian Goverment in order to finance the “ paix taitè” made increaase the Price of the bottle in the restaurants by 80%.

In order to properly address this issue, it is necessary to proceed in three steps. First, by studying the environment (micro, macro and meso) of the Colombian market, emerging at the moment, which will constitute the first part of this thesis.

Secondly, it is necessary to explain the implementation of this trade policy, reporting on the out and ins of the various missions I carried out among my expereince working as wine promoter in Colombia.

Finally, in a third part, we will see what recommendations can be made to increase this commercial development, how to include the new colombian inporters as new wines (organic wines) and obviously educating the new wine lovers in a country where beer is the king of alcohilic bevarages with a consumption around of 50 liters per capita per year.

19 Wine market is still in a new born mouvement, imported by the colombian elite as sign of recognition, the beginnings of the 2000 the wine started a gain interest between the intelectuals and the artist, thanks to the tourism boom started 8 yesr ago, new wines, new varieties get in to the wine palais of new colombian wine consumers, meanwhile wine remains unknown for the majority of the colombian population.

The axe of my analysis is based in different economic methodologies, as PESTEL, porter five porter, SWOT and so on, my target is to give the readers an aperçu not just based in theoric and rethorics economics, which in many ocassions do not take on count many varaible already present in the economy study. My experience not just as a wine importer but as a connaisseur the wine bussines in Colombia, especially in Bogota.

My experience as a co- partner of Pierre Jacques Lamat ltda, a company which has been present in the colombian market since 1970, serving throuhgt the years the best tables of the countries (Presidents- Ministeries- C.E.O of international companies) thanks to its experience and prestigy, M. Pierre Lamat has acces to the most reputaded clubs in Bogota, giving him an advantegous compare with its concurrents whom, might have good products but they do not have the market to spare their goods.

To conclude, I would like to clarify, that even if I tried to abord the subject as widely open as possible, including in the study the analysis of many different colombian regions, my focus is middle-high class clientèle, since the wines I was promoting were expensive wines to the colombian market. As I explained before europeans wines are enjoyed just for a small proportion of the colombian population (high- income- university educated and obviously living in the mainly cities).

Sociological-demographical profile of Colombia (1) Total Population 49.633.000 Average increase of the population per year 1,20% Life expectancy 75 years Natality rate for each 1000 people 18,2 Mortality rate for each 1000 people 5,9

20 Literacy rate between 15-24 years 98,20% Primary education rate 83.9% Secondary education rate 73,60% Education spending G.D.P % 4,40% Poverty rate 30,70% Extreme poverty rate 9,10% GINI Coefficient 0,54 GDP (Constant prices) 333.909 Millions USD Per capita GDP (Constant prices ) 6.999 USD Inflation rate 2% Unemployemenrate 10,60%

Table N°I Sociological-demografic profile Colombia Source: National profiles CEPAL 2017.

21 3.A PROMISING BUSINESS IN A HOSTILE ENVIRONMENT

First, before dealing with the problem previously identified, it is necessary to study the environment in which the Colombian market operates. In order to fully analyse it, we will proceed in three stages, focusing successively on the macro environment of the Colombian wine market, then on the meso environment and finally on the micro environment, all three of which are part of the Latin American trade. It should nevertheless be pointed out that adapting to the trade issue facing this young business, namely the implementation of a trade strategy, would carry out this study.

Political factors are inevitably link with Legal factors such as national employment laws, international trade regulations and restrictions, monopolies and mergers’ rules, and consumer protection.

The difference between Political and Legal factors is that Political talks to attitudes and approaches, whereas Legal factors are those which have become law and regulations, legal lis attached with the lwas applied on the country, Legal needs to be complied with whereas Political may represent influences, restrictions or opportunities, but they are not mandatory.

Economic factors : They represent the wider economy panorama so may include (economic growth rates, levels of employment and unemployment, costs of raw materials), interest rates and monetary policies, exchange rates and inflation rates.

Socio-cultural factors represent the culture (the way of living but too the quality of it) of the society that an organization operates within. They may include demographics, age distribution, population growth rates, level of education, distribution of wealth and social classes, living conditions and lifestyle.

Technological factors refer to the rate of new inventions and development, changes in information and mobile technology, changes in internet and e-commerce or even mobile commerce, and government spending on research.

There is often a tendency to focus Technological developments on digital and internet- related areas. Environmental impacts can include issues such as limited natural resources, waste disposal and recycling procedures.

23 4.PEST ANALYSIS

The PEST analysis is a useful and simple tool used to study the external panorama of an organization or entreprenurial ideas from four fundamental factors: Political, Economic, Social and Technological.

That is why this tool generates great contributions for the execution of proposals, strategy, positioning, management, and marketing, among others, of an organization. In order to do so, it is advisable to carry out this analysis before any internal analysis procedure that has the purpose of evaluating the condition in which an organization finds itself in a specific market.

4.1 POLITICAL FACTORS

With regard to the intention of building a culture around winemaking, there are elements at the political level that may limit it. The massive imports of wine into the country are an element that obstructs the diffusion and knowledge of national varieties, however, the fact that most of the consumption is registered in the capital of the country indicates a wide ignorance of the public.

On the other hand, there is a limited number of importers on the marke especially trading Chile and Argentina wine, which makes it difficult to new importers focus on European wines because the consumers prefer cheaper low quality wines.

It is important to analyze the environment and set measures as part of a strategic business plan, so that each of these forces is evaluated against the wine industry sector in Colombia. In the first instance is the rivalry between competitors, where there is a large predominance of imports led by Chilean and Argentine wines, which cover most of the market for this drink with its variety in brand and strain

On the other hand, the bargaining power of suppliers has significantly increased due to the high interest in the cultivation and production of quality wines in the national territory,

24 encouraging new projects with new methods and technologies in search of a greater production with quality.

Includes variables related to fiscal policy, the labor code, trade restrictions and environmental liability laws, that is, it refers to the intervention of the state in the economy, more specifically in a sector.

4.2 ECONOMIC FACTORS

The existing small wine producers in Colombia have a competitive advantage over external elements, since tourism and consumption activities are consolidated around cultivation, production, sale and consumption.

Refers to the different factors that influence the economic behaviour of a sector such as interest rates, exchange rates, inflation rates and level of investment. The economic policy taken by the Govertment is a very important factor because it will shape the wau the investisseurs will see the economic attractiviness of Colombia.

-Sectoral policies on consumption control in Economic development at sectoral level (wine production)

-Massive imports affecting the local product Tariffs on alcoholic beverages by degree of alcohol -Specific imports (reduced number of importers) -Price control

-Little state intervention for sector growth (mostly private investment)

-Increased local and regional investment in the creation of wine clusters)

-Use of the activity as a tourist attraction, added to the productive activity)

-Recognition of Colombian producers at international events

25 -Control of input inputs (grape varieties) Appearance of competition

4.3 TECNOLOGICAL FACTORS

Includes elements related to research and development of new technologies, implementation of new processes and innovation in a market. This factor allows there to be an improvement in the elaboration and delivery of products or services to the consumer.

Thanks to the analysis of the environment, a full exploration, monitoring and prognosis of the environment can be carried out, helping to detect key factors of the past, present and future of the market. Analyze. It is important to bear in mind that the PEST analysis varies according to the city or country in which the target market is determined.

It is advisable to monitor the environment, taking into account the factors chosen, making use of the sources of information that generate the most value and determining the frequency of evaluation of these, in order to always maintain a more accurate analysis and close to reality; in this way, the most appropriate strategies can be developed.

If we analise de colombian situation under this angle, we can define, the volatitly of the moment Colombia is on: Massive venezuelian migration, high corrupttion perception, social and political instability, just after two years for the world known “peace treatment” whic involved the Colombian state and the FARC, there are many of their army who have been not able to get back the the civil society, the employment rate it has reachen its higher point since 2009, after the financial crisis, day after day more people are losing their Jobs.

The wine education is incipient, meanwhile, there is a potential of development, but in order to achieve this operation with succes even the state must promote a healthy consumption of wine, and putting wine as a priority to develop culture and increase cultural interest between the young populations.

26 The increasing trend in wine consumption in Colombia reflects the potential of the market in the country. The study reveals indicators that show that wine is not only used in social events, but also as a table and drink companion in social events.

These factors, together with the wide range of prices and varieties, allow us to conclude that there are wide levels of acceptance, and that activities tending towards the consolidation of wine culture should focus on socialization and information about the benefits and goodness of wine.

The country's current wine supply is limited by the few parts of the national territory that have the right climate, however, the availability of grape varieties for wine is one of the main obstacles in the consolidation of national production.

However, given the level of specialization achieved in local production, it has been possible to consolidate its own procedures and techniques applicable to the particular case. For this reason, the research activities in the vineyards, in particular with the processes of elaboration and fermentation, allow to obtain results beyond the product in question.

-Changes in consumption habits (variations in per capita consumption) Government research expenditure

-Increase in the use of wine as an accompaniment totable Competitor development.

-Changes in alcoholic beverage preferences (21% of total alcoholic beverage sales, ranked second)

-Availability of temperature control elements, cultivation and harvesting of the vine. -Some vineyards vineyard has become an entire laboratory, where Perception of product quality in any of its dozens of professionals develop their degree thesis with the Presentations (national or international) technological collaboration of several European countries.

27 5.COLOMBIAN WINE MARKET, BIEW FROM A PESTEL ANALYSIS

In order to have a better analyse of these factors, noted from 1 to 5, to understand the viability of the opportinuty (5 beign the highest notation) .We start with the Political forces. First of all, political factors refer to the stability of the political environment and the attitudes of political parties or movements. This may manifest in government influence on tax policies, or government involvement in trading agreements.

5.1 COLOMBIA IN A VERY DIFFICULT MACRO-ENVIRONMENT

First, the macro environment will report on the opportunities and threats of the Colombian wine market, the aim is to take stock of all the major trends in society, whether political, economic, social or cultural.

Regarding opportunities, four appear in short and medium term:

The development of emerging 4 wine lovers specially from the generations call the Millenians between 25 to 34 years old, with all the new migrants to the big cities as Bogota- Medellin-Cali all these cities represent potential future markets for internal development The development of online 3.5 sales: it has grown at a rapid pace, by 30% per year since 2013, with a market of nearly US 2 billion in 2017 worldwide,

28 resulting in opportunities to develop very important distribution channels The recent decline of 2 dollar compare with the colombian pesos, which has been established of the day this report was written at US 1 = 2.900 COP, restoring competitiveness to the colombian devise, which also helps the nationals to get imported products at a better Price, is for the moment an opportunity, but it remains ephemeral The ageing of the 2,5 population in Colombia: the oldest people often have a higher purchasing power (more credit, inheritance received...) and will therefore consume more wine, this will be true in the high income population but also the middle class, meanwhile to enjoy completely this fact, wine education is essential

29 As far as threaths are conderned:

The stagnation in wine 5 consumption from a socio- cultural point of view: it has fallen by 10% the past 3 years in Colombia, and is expected to decline further in 2019, with the increases of the taxes, which directly affects the wine market. This decline affects both on-trade and off-trade consumption, with only latin-amaerican consumption expected to increase slightly in 2019. The urbanization of the 3,5 population: indeed, households have less space to store wines, lunch breaks are shorter and shorter so that people buy a sandwich, more and more people consume wine in rural areas The development of public 5 health policies: these include the One glass law, which restricts advertising, but also various messages such as alcohol abuse is dangerous to health, to be consumed in moderation or the fight

30 against road safety (limitation to 0.5 g/l)

Average threats 4.6

In summary, with a score of -1.6, the Colombian Market has an unfavourable macro environment, particularly due to very serious threats to the entire wine market.

5.2 NUANCED BY THE MESO ENVIRONMENT

Now, the meso environment will focus on all the actors who will interact on the wine sector; here again we will study the Colombian market, which is also part of the Latin Aerican wine trade.

In terms of opportunities, only two are emerging:

The development of actions 2 to promote imported wines, such as those carried out by the supermarkets and the HORECA’S (Hotel- Restaurants-Cafes )as well as the existence of numerous professional associations. The latter are true ambassadors, make it possible to improve the image of the wine or to increase awareness, thus they can have a positive impact on sales

31 The "French paradox" of 3 showing that the French are among the worlds biggest wine drinkers, and at the same time have the second longest life expectancy. This makes it possible to thwart the traditional image of wine, associated with a poor lifestyle, a dangerous product, and to show the virtues of moderate consumption. This will be particularly appreciated abroad Average opportunities 2,5

As for the threats, we can also distinguish two major ones:

The ever stricter Colombia 2 regulations: for example, many certifications are required because wine is a food product, very demanding on terms of traceability as example The “INVIMA” Colombian agency of phisionatary register, an agency where corruption a inefficiency are a daily matter, in 2016 it was noted as the worst

32 state colombian agency by the citizens. Besides all this facts, just to get the authorization to import wine is a slow and expensive procedure,; the total cost of the procedure could reach 2.700 euros The poor wine eduation in 2,5 Colombia: in order to overcome it.Many measures have been put in place, such as grubbing- up premiums or conversion aid. The prices of small wines are pushed down, there are just the big supermarkets which are allowed to import big quantities of wine at good Price, they mainly buy the wine from wine traders and not small vinegrowers Average threats 2,25

. Thus, the meso environment with a score of 0.25 is very slightly favourable, particularly thanks to good opportunities abroad.

5.3 THE MICRO ENVIRONMENT MARKED BY VERY STRONG COMPETITION

Finally, in order to complete the environmental analysis of the Colombian wine trade, we will study its microenvironment, i.e. the intensity of competition within the country between

33 big supermarkets, importers and wine cellars. You will find in the page 44 the different scoring elements permiting you to establish a ranking between Porter's different forces. The rivalry of direct competitors is the essential element, which is one of the main threats to the Colombian market. While there are more tan 100 traders in Colombia, it remains increasingly complicated to establish oneself, whether at the level of distribution networks (HORECA’S for example), whether at the level of the price war limiting margins ever more, but also at the level of the need to anticipate and differentiate oneself from the others.

Thus, building exclusivities seems to be one of the only ways to be able to set its prices, as all the other wines can be found among competitors, on Internet, meanwhile to get this kind of exclusivites either you bay thousand of bottles ot once or, make a contract arrangement with the winery and you compromiso to buy a certain amount of botlle annually forseveral years.

This very strong rivalry is the main limit to the commercial development of the new wine importers: it means that we must align themselves with the prices of the competition, and that they do not have the right to make mistakes under penalty of losing the market given the low change costs for the final customer.

The second element, which is essential, is the threat of newcomers. Indeed, it is very simple and fast to launch your own business, so you can create many new ones every year.

While it is true that reaching a critical size is already much more complicated (allocation of grand crus, storage costs, cash flow, renown...) starting in the sector is within reach of a large number of people, who will compete, even in a ¿significant way, with existing businesses.

For example, many Chinese traders have settled in Bogota, which will limit access to the market for smaller importers, because they have a dominant position thanks to the liqiudity they do dispose. All this, is of course a real and serious threat to the new Colombian importers, because just the big importers might survive to the chiness investers as it had

34 happened in many other secteurs of the economy.

Thirdly, we find the bargaining power of big surfacers to be quite strong. If we look only at European wines, this power will of course be low, or even non-existent, unless they buy thousand of bottles of wine as they do with Chilean and Argentinian wines.

On the other hand, the small structures, restaurants and neighborhood supermarkets are concerned, it is very difficult to have a favourable balance of power as the sector is totally fragmented: customers, if they do not win their cases, will go elsewhere and make competition work.

The balance of power is therefore to their advantage; wine consumption in Colombia is stagned the past years. At the same time, the water supply is increasing. Here, water is therefore a substitute. We can also mention strong alcohols or beer, which are widely consumed in the evening, in bars, instead of wine, for instance. Sodas, cocktails... are as many other possible substitutes.

It is therefore necessary to take care of the image of wine, to educate consumers, hence the importance of the various promotional actions. Nevertheless, it should be noted that a true wine lover will find it difficult to consume anything else during a good meal or for a special occasion, which makes it possible to qualify this analysis on substitute products.

Finally, we find the bargaining power of suppliers to be medium to low. While big supermarkets as “ Carulla, Éxito”, particularly through the allocation system, which allows each of them to have a certain number of crates, small stores, new importers have more difficulties in establishing themselves.

Every day there are more and more useless rules, laws and filling up forms to import legally wine in the country, all tis bureocracy only reduces the numbers of people interested in put more wines inthe market, therefore, the wine suppliers never ,ind top ut good quality products in the market, and just left for years the same products on the market, not giving the opportunity to the average colombian to know and drink good wine.

35 To conclude the analysis of the macro, meso and microenvironment, The main threat is of course this strong competition between the big and small structures, and the lack of wine education, but others also weight heavily, affecting wine consumption and spreading wine around others city of the country. We shall note that low national awareness can also be problematic.

On the other hand, some opportunities seem to be emerging and clarify the picture, particularly with a view to development ways of getting people interested about wine.We easily understand that in order to implement a commercial development policy within the colombian market , it will be fundamental to stand out, by offering different products, a unique commercial approach, by rigorously selecting markets and distribution channels.

This will be the subject of the following section, which will detail the approach taken to ensure commercial development.

36 6.SWOT ANALYSIS

In order to complete the analysis of the company in its environment, we will draw up a summary table in the form of a SWOT analysis, highlighting the strengths and weaknesses of the Colombian market

6.1 STRENGHT

- Favorable taxe change Colombian pesos COP- US Dollar, allowing people to get more products with the same amount of money - Diversity of wines to propose, different prices, varieties, tastes, the wine is entirely open since Colombians do not have any edcuation about wine. - In Colombia 80% of the population is between “20-60 years old “ ¿??makes a big potencial to develop a new market - Colombia is very well situated, having direct connections with two oceans, Pacific and Atlantic, it makes an open to gate to the new products.

6.2 WEAKNESS

- The wine education is incipent, besides the gouverment effort to promote wine growing; there is not any organisation in Colombia, which is specialized in wine.

- The national income is low to acquiererd high quality wines, Colombia does not produce quality wines, people prefer to consume fruit juices or sodas, which are way cheaper than, wine.

- The lack of wine enthousiast for the Colombian people is because they are not interested in paying more for a better product, they preffer to buy cheap quality in order to save money

37 6.3. OPPORTUNITIES

- New wine market, it can develop easily if people educated and get curious themselves about wine.

- We can use the tourism boomed the past years in Colombia to introduce wine in differents regions of Colombia.

- Art- gastronomy- music; the diversity of the regions in Colombia helps to créate different maridajes (wine-food), the artistic scene in Colombia is incresing, this kind of events are the best to sell wine.

6.4. THREATHNESS

-Economic and Political instability.

-Fiscal instability, the taxes could increase at any moment.

-Poverty, by “Cepal the poverty in is increasing due to tte massive arrival of around 2’000.

000 venenzualiens the past three years in Colombia”6

- Insecurity, eight countries in the world with most murders in 2016.

By looking at the strengths of the Colombian market, we can highlight two of its key success factors, which will allow it to stand out. The first concerns market exclusivities, which are a real asset since they give great freedom, particularly in terms of sales prices. The second key success factor is represented by the pottential of the market, in order to develop it the actions have to take place which include the many events, tastings and other highlights of the wines to which we will return later6

6 Sudy based in statistics given by the DANE, written by Daniel Samper, April 2018. « Dinero », Colombian economic magazine 38 7.IMPLEMENTATION OF A BUSINESS DEVELOPMENT STRATEGY

The colombian wine market has many key factors pottential but few factor which it may pay attention: “The past 15 years the wine consumption has increased exponentially” meanwhile the past 2 years have been stagning, meanwhile it has still full expansion, the most important is to find good wine distributors, develop build customer loyalty, first at the regional level, then at the national level.

In terms of litres, the import market is 12.3 million litres. The supply of fractionated wines is strongly concentrated in Chile, which represents 58% of sales volume. Argentina is the second largest supplier with sales of 21% of total volume in 2016. Both suppliers, although very strong, have registered dissimilar behaviors in the period 2007- 2016. In the next figure we can see the most important wine companies by sales in 2017.

7 Graphic Nº 3. Most important wine companies by sales for US$ dollars year 2017.

“While Chile has always been above 45% and has managed in recent years to consolidate its market share at a value close to 60%, Argentina's performance has been poor and has lost market share”8

7 Most important wine companies by sales for us$ dollars year 2017. Source: SUNAT- consulting company 8 El TIEMPO, Carlos Irragori, pag, 28, economic section, 24 March 2019 39 “Spain has also lost market share and in 2013 it represented half of the market share reached in Argentina. 2015 represented only 2%). The United States, on the other hand,

has achieved a very pronounced quota increase (from 3% in 2009 to 11% in 2017). Italy, on the other hand, has maintained between 1 and 2 per cent of the quota throughout the period”9.

“Bottled wine imports in 2016 amounted to $59 million, a growth of 354% since 2010. The supply of wines is concentrated in Chile and Argentina who represented 55% and 22% of the total value in 2013. Spain is the third largest supplier and has registered stable values in the period 2000-2013. On the other hand, France has seen its share vary negatively to only represent 4% of the value total imports (compared with 10% in 2000 and 16% in 2012”10

In terms of average price, there is a clear difference in positioning and strategy between New World suppliers and Old World suppliers. While the former Old World suppliers position themselves in the high-price segment.

In order to ensure the implementation of a relevant and effective trade policy, various actions must been carried out, taking into account budgetary and organisational constraints. They most be carried out in several stages, in a thoughtful manner. The aim was to increase the reputation and image of wine and gastronomical culture in Colombia in parallel with a major prospecting mission in the region. Finally, I’ll detailed the steps to carried out a succesful strategy

7.1. THE STEPS TAKEN TO INCREASE WINE CONSUMPTION IN COLOMBIA

The generalization of a regular distribution of flyers has to be introd how much money are you willing to pay for a bottle of wine in a supermarket, wine cellar and so on. Since the

9 Pierre Lamat, conférencière and wine importer, « overview of colombian wine” statistics given by eurostat and colombian commerce ministery 10 Mtimet, N., & Albisu, L. (2006). Spanish wine consumer behavior: A choice of Experiment approach. Agribuiness, vol 22 , 343-362 40 wine in these áreas and is essentially limited to the perimeter of the district, it is the latter that was naturally chosen as the place of distribution, although it slightly exceeds it.

In order to benefit from maximum visibility, this strategy must be not just both in the mailboxes; windscreens of the cars were chosen. But via mail doing monthly newsletters these distributions should take place in two stages: first, a neutral prospectus without an offer, in order to simply make the people aware about wine (with different varieties, producers countries and facts then afterwards, a second flyer or newsletter, with a commercial offer.

In order to attract as many people as possible, this one should of course include a discount, to the bottle or cardboard, a time limit, as well as to take into account a certain seasonality, by proposing a rosé for example as good time approached.

Even if the returns on this type of action are quite low, in the order of 1 to 2 percent, this makes it possibleto get known wine better. Some people simply come to see the products following prospectuses received previously, this is part of the indirect benefits; they have been numerous and often successful.

Moreover, many mailing actions can be carried out, taking care to make a selection beforehand. From the potential customer file, many potential targets were selected for a commercial offer; the latter was in addition to the distribution of flyers. This made it possible both to boost sales and to ensure that the wine remained in the minds of customers, even if they did not buy as a result of the offer. It is an effective and inexpensive way to strengthen the wine education in Colombia.

On the other hand, still with the aim of making the wine consumtption in Colombia bigger, partnerships should be established with different structures as galleries restaurants bars’s Indeed, this type of actions, are very popular in Colombia allows users to enjoy deals in terms of restaurants, leisure, well-being.

The objective was therefore to offer Living social users a deal, including a tasting of two

41 wines, as well as a short introduction to oenology coupled with an explanation of the wine lasting approximately one and a half hours, all for (50.000 COP=15€) for two people. This operation will make possible to gain a lot of visibility,

7.2. COMMERCIAL PROSPECTING NECESSARY FOR THE SUCCESSFUL DEVELOPMENT OF TRADING

Establishing and carrying out an effective and relevant business development policy naturally required extensive prospecting. This was going to bear fruit in a more direct way, in fact wine importer’s, vine growers should hather together and créate and association in order make more visible campaigns.

This prospecting thus constituted the core of the response to the problem identified (lack of education), and it was therefore necessary to devote all the means to its implementation. To do this, various questions had to be studied beforehand, such as the choice of distribution channels, geographical areas or type of clientele.

First, regarding the choice of distribution channel, it is mainly the HORECA’S that has been chosen. On the one hand, the latter makes it possible to achieve high margins; it is a very promising channel in terms of image (unlike mass distribution, for example) and the multitude of existing restaurants obviously offers many opportunities. This channel also ensures good visibility of the wines in different districts and types of establishments.

Thus most of the prospecting must focus on the HORECA’S, taking care to select the rights places:Those that enjoy both good attendance, in order to get important orders, those that have a good image, which will generate a positive feeling for the wines, by excluding all those that have a bad reputation (bad payers, bad reception...).

Different approaches have to be use to gain custumers, which could range from making telephone contact to meeting unexpectedly in the restaurant. A catalogue of products defined upstream had to be presented: it contained a large number of wines to meet a significant demand for this type of wine from the HORECA’S. Tastings of certain

42 references could then be organised to trigger orders.

Concerning the prospecting sites, several rules had to be defined following the first conclusive results: first of all, avoid "scattering" throughout the Transmilenio (Bogota transportation system), due to the long travel times required for prospecting and then for deliveries. It was indeed more sensible to focus on a few kilometres, around the city centre, given the number of potential wine lovers, while allowing prospects and deliveries to be grouped and rounds optimised.

Secondly, to address both large institutions and some smaller ones: while the former generally allow large volumes to be sold unlike the latter, they are more difficult to address and will require more effort in terms of negotiation and prices. Smaller ones are more affordable, and it may sometimes be more advantageous to have several small ones than one large one. It also avoids the risk of dependence on a customer, and strengthens the company's negotiating power.

In addition, prospects with a limited number of references should be the main focus: if a restaurant has more than two hundred references to its menu, it will then be difficult for it to order large volumes for each wine (costs and storage space), it was then more relevant to target those with more limited menus.

As we can see on the graphic below, colombians have preference for cabernet sauvignon, the mainly variety of chilean and Bordeaux wine, but they buy chilean wine becese of the Price, four times cheaper than a french wine.

43 Consumption by varietal ‐% of total volume ‐2017

Sauvignon

Malbec

11Graphic N°4 Consumption by varietal (% of total volume -2017) The results of prospecting proved to be up to expectations. If we analyse the impact seen in other kind of campaings promotting other products, The HORECA’S are the key to develop The second step is implementing a commercial policy to ensure that all these potential wine lovers would buy wine again and not just in specail occasions.

This should be seen as an original way to promote wines. The idea was to offer a tasting to the people present in the establishment who can then buy wine, by the bottle or by the glass. In a way, it is a sales aid offered to restaurateurs, who do not always have the time to promote their new products or make them discover them.

That's why they are always very enthusiastic about this kind of animation, which allows them to get other orders by following. Here again, it should be kept in mind that wine lovers loyalty is essential, and that it is necessary to provide a "plus" for the launch of new products.

In order to increase and strengthen the implementation of trade policy, other types of prospects should be approached in parallel. Two examples as follows:

As for Young wine importers in Colombia dealing with wine and spirits wholesalers is a daily matter, who themselves distribute to the regional HORECA’S in their region. This

44 distribution network, which is more difficult to penetrate, particularly in terms of negotiation, requires very significant efforts regarding prices and requires relatively low margins. In return, it makes it possible to sell large volumes, and to avoid the heavy task of contacting countless restaurants in each región

“The wine market in Colombia is constantly changing. According to information provided by the president of Grupo Éxito, Carlos Mario Giraldo, per capita wine consumption in Colombia has increased from 400 to 750 milliliters in the last 5 years”11.

To develop the wine industry, therefore the wine consumption is necessary to target the type of establishments: i the large and fairly high-end restaurants, bars and brasseries that selected: this ensured good visibility for wine and to attrack visitors and a good image. Once again, to avoid any risk of competition between customers, granting “mini exclusivities” over an entire street or area could prospect not all HORECA’S, in particular.

The method which should be used once a week, commercial tours with prior appointments, punctuated by tastings which, must be organised in order to keep the fidelity of the HORECA’S.

Then, as orders and therefore deliveries arrive, is very important to optimize the time, chossing an área where is the target to deliver and avoid traffic jumps. then new surveys have to be undertaken, which made it possible to get it know exactly what arethe customers are looking for.

The main difficulty could be to face the presence and very strong competition from other alcools and beer for wine is still a very low consumer demand. To do this, tastings should be systematically set up, accompanied by a major marketing effort to promote wine: distribution of slate, ice bags and promotional glasses, , to each new customer. In addition, wine tasting evening bars should be organized, with a focus on products, and once again.

11 https://www.larepublica.co/empresas/exito-es-el-mayor-vendedor-de-vino2523377Martinez, D., & Milla, A. (2012). 45 The objective being to promote and develop the wine consumption, different references should be placed with the HORECA’s throughout the major cities. The results of this action letting know wine, should take over a year, since many wine amateurs want to really get it known the product, tasting different varities, getting know more about the culture of wine, history and so on.

Thanks to this good type of campaigns, all that remains is to develop the wine consumption in a thoughtful way, always taking care to select the right places, maintaining marketing efforts, so that wines gradually takes the place in the daily life and asserts itself as an essential beverages in consumers' minds.

In short, the implementation of a commercial development policy within in order to increase wine consumption must involved extensive prospecting. The latter involved the region's HORECA’s, wholesalers and cellars, could result of very encouraging results and a well-developed customer portfolio.

Now, it is time to give a new impetus to the wine, naturally go deeper about the knowledge of this milenial beverage and with the aim of increasing potential markets.

Many opportunities remain to be seized, and the development of the wine consumption in the country is a good illustration. In order to truly implement a very profitable and sustainable commercial policy for the wine consumption, let's look at the new challenges facing the company.

1. 2. 3. 4. 5.

46 6. 8.NEW CHALLENGES TO ENSURE THE SUSTAINABILITY OF THE WINE CONSUMPTION IN COLOMBIA

While the Colombian people are a young and growing, some opportunities seem to be emerging on different scales. In order to increase its wine consumption and consequently its turnover, it will be necessary to think about new ways of development. In particular, it is the trading part in particular that must receive all the necessary attention since it allows large volumes to be sold. In the long term, this part should represent more than 90% of turnover; in fact the key of the wine developtment in Colombia is the retail market.

Talking to the people making them eager to consume and know more about wine, compared to barely 10% whole saler part, whose activity remains very moderate and delicate to develop. In this way, it will able to make various recommendations, quantified, and study the issues to be addressed in order to truly "sit" an effective trade policy, by perpetuating and promoting wine consumption in Colombia.

The graphic below shows the share of the different types of wines in the colombian market on 2018.

Recent wine consumption 2017

Graphic N°5 Wine consumption in Colombia 2017

47 8.1 DISTRIBUTION CHANNELS TO BE ADDRESSED IN THE SHORT AND MEDIUM TERM

A strategy for expanding the wine lovers portfolio or market penetration must be defined in advance. If the aim is to boost sales considerably, by winning large orders, some distribution channels will be preferred while others will have to be neglected. This choice of channels is indeed essential: it will determine the future orientations in terms of image, strategy, organization…We will define them in the short and medium term, i.e. within a horizon of one to five years.

First of all, the important prospecting with the HORECA’s already chosen shoul d be keep it on, meanwhile It will then be more appropriate to focus on larger establishments in the future in order to increase volumes, and to avoid wasting time on very small orders. Even if this network should not represent the core of the future strategy, current customers must be retained and constantly expanded, without however giving it too many resources, especially human resources.

The wealthy Bogota’s neighboorhood perimeter must be preserved, again to avoid spreading too much around and thus facilitate the work (reminders, deliveries...). Given the very satisfactory results obtained and the many existing opportunities, the other larger cities of the country sector will also have to be further developed, in particular thanks to the many contacts made during the prospection campaign In addition, it will be necessary to increase the number of references for each client, with the aim of making the most of them in the near future, almost exclusively by means of reminders, which will guarantee a certain turnover.

The HORECA’S network, even if it requires considerable effort, guarantees good margins and makes it possible to offer a good image to wines. It is also a way of making consumers aware of the products, a virtuous circle in a way, hence the importance of maintaining a presence in big Supermarkets, small centers and so on.

48 A strategy for expanding the wine lovers portfolio or market penetration must be defined in advance. If the aim is to boost sales considerably, by winning large orders, some distribution channels will be preferred while others will have to be neglected. This choice of channels is indeed essential: it will determine the future orientations in terms of image, strategy, organization…We will define them in the short and medium term, i.e. within a horizon of one to five years.

49 strategy, organization…We will define them in the short and medium term, i.e. within a horizon of one to five years.

Wholesalers of wines and spirits must be at the heart of the future commercial strategy of the Young wine importers. They allow part of the work to be delegated, they are intermediaries between the trader and the HORECA’s They have the advantage of ordering in large quantities in order to optimize their purchase cost, they are therefore guarantors of beautiful orders.

Tours must be regularly organised in all resturants zones in Bogota, chose a resturants and wine cellars, elect a wine región to make discover the wine lovers, do expositions,

50 wine tasting paring food and wine and talk about the history of the vine-growing in the regions, in order to reach as wide a range of prospects as possible.

Within each region, exclusivity may be granted on certain products to avoid any risk of competition between customers. Both very large and smaller wholesalers should be contacted, to diversify risks, offer different wines and balance margins.

Sudáfrica

GRAPHIC N°6 Which Country produce de most quality wines12

The third essential point of the increasing wine consumption in Colombia commercial strategy is mass distribution. It is a rather delicate channel to exploit, both in terms of image and price. Most of the exclusive products of that are now available in Colombia are distributed in specialize stores; it can be very dangerous to find these same products in mass distribution. In order to overcome the problem, exclusive ranges for this distribution network must be developed.

They can be either the same wines with different labels, or even different brands, but also wines marketed especially for mass distribution. The latter would thus not be sold either

12 Own elaboration graphic, information coming from ANDI (Asociacion Nacional de Industriales -2017) 51 to HORECA’s or wholesalers, they would mainly be low-priced wines or less high- end Bag in box, since the average price of a bottle sold in supermarkets is around 4 euros.

Thanks to this channel, very large volumes can be produced, and by highlighting other products, any concern for image is eliminated, especially since” two thirds of the wines sold in Colombia are sold in supermarkets”13.

First of all, it is advisable to address self-employed people such as Carulla and Exito, since they do not only go through central purchasing offices, and are therefore more open to discussions. Given the cost and time required to set up special brands and ranges, it will be necessary to extend prospecting to the whole country, by grouping them with wholesale tours.

Moreover, some important avenues remain to be explored to ensure the sustainability of the wine consumption in Colombia less conventional than traditional networks, it may be relevant to conduct a survey with actors such as works councils, caterers, business school BDEs.

These are directly concerned by the sale of wine at weddings, congresses, parties or banquets and they generally order large quantities. In addition, all these actors usually operate in networks, which can lead to the opening of new outlets for the company.

In addition, a stronger presence in hotels and cruises should be envisagedin the short term. Even if this should not be at the heart of the commercail developping concerns, given the many opportunities to be exploited in the north coast of Colombia thanks to the tourism boom of the past years. The idea would rather be to seize some opportunities at the beginning.

This channel requires a very tedious work: from the establishment of importer listings to the sending of samples, including making contact, studying the most promising countries,

13 Ricardo Alarcon « Nuevos metodos de consumo » Editorial Alfaguara pag : 108, 2015 52 and so on. A whole implementation process must follow, particularly at the level of the company's structuration, and will require reorganization. In return, this network will considerably boost sales once a solid customer base is established and prospecting costs are amortized.

Finally, a last distribution network not mentioned is that of online sales. It is a booming market in Colombia. Consumers are increasingly inclined to exchange opinions, to be able to learn about wines, to have tasting comments, and above all to be able to compare prices from one site to another, very quickly.

The challenge of this channel, unlike previous distribution networks, is to be able to reach a private customer base at higher rates. Nevertheless, online sales present certain risks. It is indeed more relevant to offer essentially for sale the exclusivities of the partership associated in order to remain in control of its prices. If it is to work properly, the prices displayed must be identical to the cellar prices, at the risk of not having any e- buyer, who will prefer to come and buy directly on site or buy from other sites.

In addition, care must be taken not to compete with one's own customers: if they apply high margins, their consumers will instead buy from the website. For example, we could take as an example a delicatessen in Medellin that would resell Baron de Lestac for twice the price displayed in the many shops in Bogota and on the Internet.

This is why the pricing policy is quite complicated to define, as is the selection of products upstream. Given that the new Colombians wine importers must nevertheless seize this opportunity, in order to boost the "private" turnover, which will strengthen thecellar part, a rigorous selection will have to be established and a well studied price policy.

In short, these various new distribution networks will bring about profound changes within the wine Colombian market. This is essentially a change in the organization in order to be able to cope with the increase in activity: order processing, customer follow- up, prospecting of the various markets... To do this, it is important now to see what recommendations I can make in order to optimize the operation of the increasing wine

53 consumption in Colombia and to take maximum advantage of the implementation of the commercial policy.

8.2.DEVELOPMENT OF AN EFFECTIVE ENVIROMENT TO BOOST WINE CONSUMPTION

This new structure will be the result of the steps taken previously, the successes of future prospecting and those undertaken in recent months for some wine merchants. To ensure the sustainability of the wine consumption in Colombia, as we have seen, it is necessary to considerably increase its activity by diversifying its distribution channels. However, this requires major structural changes.

First of all, it is important to focus on the changes inherent in the political’s stability in the very short term. It seems very appropriate top ay attention to all the changes of the Venezuelain situation since as i mentionated before there around three millions venezualians in the contry due to the huge crisis going on there, this social stability could generate more internal (social and economic) problems in Colombia.

Leaving behind this political problem, and focusing strictly on the wine market prospecting and developing the customer portfolio, particularly through tours throughout different wine cellars is essentail to boost wine consumption . As the wine market is still very Young is only really effective and productive after a few years of work , the time to get to known more wine varieties and ways to make wine.

It is preferable to recruit a special teams for long periods, from 8 to 14 months.they generally benefit from previous experience and more extensive knowledge than the younger ones. The use of work-study of previous teams can also be considered: in addition if the teams who are working on this wine promotion have a good wine knowledge and essential communication skills and must known the market inside out.

Their mission will be to maintain relationships with all HORECA’s clients in the regions the are stablished, while continuing to increase their number. It will also be a question of

54 developing the prospecting of major accounts in Colombia as cruises and wine bars. These people would have the status of HORECA’s account manager, busines development manager. Above, a position of commercial director will be created; the latter will take charge of them, give directives and supervise commercial relations. As colombian wine market expands, both in supermerkets and HORECA’s, new people will have to be recruited and will complete the sales promote team so that it remains in optimal working order.

This means that it is useless to create expenses for nothing, for example to avoid a hiring new people that would not really serve, and at the same time, each market and each opportunity must be exploited, the young wine importer’s must be able to enjoy a sufficient number of people willing to work on the wine field to be able to properly process each prospect, each customer and each order. Theses structures should be implemented in the coming months, and will evolve each year according to the turnover achieved.

However, as we have seen previously, the recruitment of more prospecting people may be entirely appropriate and sufficient for its operation, if at all. Moreover, it would also mean that the wine young importers would deprive itself of part of its profits, since young wine importers need a cash flow to maintain its structures in the market while the bif importers specially the big supermarkets allow it to benefit from high margins

Is important to develop the wine tasting culture. That mean that the location would be essential to attrack new people changed since it suffers from a glaring lack of visibility, it seems very complicated to be able to increase activity as it stands. It would then be appropriate to open more annex on a busy street to call more customers, which would be very expensive.

Developing this idea considerably while keeping the current location seems difficult and above all not very profitable, considerable efforts would have to be made which would be harmful to the trading party. Therefore, this hypothesis should also be discarded since it seems rather unprofitable and resource-intensive.

55 The second hypothesis logically seems to be the most appropriate. The main thing is of course to keep the wine promotion, to take advantage of the existing customers who ensure a certain part of the turnover (whose percentage will increase relatively over the years) and to exploit the actions undertaken in order to gain notoriety. However, the idea is not to do everything to increase the activity insofar as it would encroach on the business, only one person must be in charge of it and ensure its functioning.

It also serves as a showcase, a storage place and generates a positive image from which the business can benefit. For all these reasons, this is the second solution that can be recommended in order to increase the wine consumption in Colombia, namely that the wine bars should keep its current momentum and dynamism without devoting too many resources to developing it. The emphasis is obviously on the trading part, which will considerably boost sales.

Due to all these opportunities, the wine market in Colombia, which will have to implement strategic axes. Understanding these issues has a cost that must be understood in order to verify the relevance of the recommendations, their profitability and the points on which to focus.

8.3CURRENT COMSUMPTION IN COLOMBIA, WHICH WINES ARE MORE CONSUMMED

The Past years Chile has been working hard in order to regain the world market, in it strategy Colombia has been an important axe in South America besides that chilean wines have many climatic characteristcs which are highlighting:”the influence of the Pacific Ocean on its coastal areas where, together with the Humboldt current, marine breezes are generated, causing freshness in the coastal vineyards”14

In addition to this, the Andes Mountains also have a great influence on Chilean viticulture as it is considered a temperature regulator due to its diversity of soils and climatic

14 Wines of Chile, Non profit organisation, charge of the development of chileans wines. 56 conditions. “These distinctive aspects are reflected in Chile's characteristic Mediterranean climate as it is the only non-Mediterranean country to have this climate.”15

However, these geographical aspects are not the only reason why Chilean wine is one of the most recognized in the world wine industry. In addition to this, the country has put its effort into working with modern methods, encouraging innovation and development in the sector, creating brand strategies and promotion due to the high competitiveness of the sector worldwide.

In the case of Colombia, the director of the commercial office of exports affirmed that the country has a great potential of development, since it consumes an average of 1 to 1,5 liters of wine, very below the average of the world (23 liters). According to official figures, in 2016 “Chile exported more than US$1.407 billion of bottled wine. According to the latest report by the International Organisation of Vine and Wine, Chile once again ranked fourth in the world after Italy, France and Spain”16.

According to the OIV (International Organization of Vine and Wine) Chile and Argentina ranked seventh and ninth in the world ranking of wine producers in 2016, respectively, demonstrating their good positioning in the foreign market.

The Colombian market has found in them its main source of imports, since "45 percent of imported wines consumed in Colombia are Chilean, while Argentines reach 22 percent"17

Despite recent tariffs on alcoholic beverages, the wine market in Colombia has continued to expand and grow. "Wine consumption in the country has grown by an average of 7% in the last five years and by 10% in 2016. The income years the goal is above 10%, despite the new taxes for alcoholic beverages. According to these data, the growth outlook of the wine consumption line is in good figures.”18

15 http://www.oiv.int, Charles Dupere « the Charming Andes chain Mountain » 2016 16 Lopez, A., & Martínez, G. (2016). Edicion Exernado de Colombia, Estudio de los Habitos de consumo de vino enBogotá. Universidad de los Andes 17 Dinero. (2017). Consumo de vino sigue creciendo, pese a más impuestos y desaceleración. From Revista Dinero: 18 Portafolio Newspaper, Pedro Martinez, 15 April 2017, Bussines section, page 24 57

Graphic N°7 Price increase due to the new taxes applied in 2016 by the Colombian Gouvertment

The sectorization of consumption in the capital city indicates a great heterogeneity in the culture of consumption of alcoholic beverages in other regions of the country, which requires specific market research regarding the incursion of wine in new cities. Currently,

"a Colombian consumes 51.4 liters of alcoholic beverages a year and allocates $196.7 dollars for it, about 560,000 Colombian pesos”.19

Within this consolidated is wine, a segment in which "there has been an increase in consumption thanks to the gastronomy and the diversity of the countries from which they come, as these not only come from Chile and Argentina, but are the Europeans."20

As in a number of Latin American non-wine producing countries, an incipient wine culture is observed in Colombia. However, consumers only purchase wine to consume on special occasions because it is not perceived as a daily consumption product or accompanying meals. The 15 million liters of wine imported in 2017 for a value of 51 million were heavily concentrated in the holiday months of November and December.

19 El Heraldo » newspaper, Hector Abad, 30 July 2018, page 22, economic section 20 El Heraldo » newspaper, Hector Abad, 30 July 2018, page 22, economic section 58 “During the period 2000-2013 high growth rates were recorded, both in terms of value and volume. Imported litres grew by an average of 8% per annum and dollars by 12% per annum.”21 The largest increases were those recorded between 2003-2005 and then between 2011-2012, reaching rates of 33% annual increase in value.

21 Lopez, A., & Martínez, G. (2016). Estudio de los Habitos de consumo de vino en Bogotá. Universidad de los Andes: Tesis Magister en Administración, 59 9.PORTER'S FIVE FORCES

Michael E. Porter is an economist who has focused several of his research on economic development and business strategy. Therefore, it is important to emphasize the model of The five forces since from these concepts the Colombian wine industry will be analyzed with the objective of establishing determining aspects for the proposal of improvement of the sector.

“Porter considers that there are five competitive forces that interact among them. This theory explains that the attraction of an industrial sector and the competitive potential of its actors is determined by five competitive forces”22

1. Suppliers' bargaining power: this force refers to a higher level of bargaining power on the part of suppliers. Suppliers' power refers to their ability to impose conditions and prices. This power is due to a high concentration of suppliers, the characteristics of their inputs, the effects of their products or services on industry, etc.

There are different cases in which a higher power of a group of suppliers may arise: High concentration of suppliers: In the case where there are many buyers and few suppliers, a clear example is oligopolies.

The sector does not have a great influence on the income of suppliers: When suppliers supply many sectors it is easier to generate high profitability from them, but when a sector is very important for suppliers, they make an effort to invest in improvements for the sector.

Costs assumed by changes of supplier: At this point the power of the supplier increases if a company must incur high costs by changing the supplier; an example is given when companies invest significantly in the equipment of their supplier. Another case is evidenced if the company has chosen to locate its factories close to those of the supplier.

22 Porter, M. (2008). Las cinco fuerzas competitivas que le dan forma a la estrategia. From Harvard Business Review America Latina 60

Differentiation in products: It occurs when a supplier offers products differentiated from the others offered by the competition, that is, its products have special and additional characteristics that generate greater competitiveness, giving them a level of power.

There are no substitutes: When a group of suppliers has no substitutes, their power increases. The groups of pilots being suppliers to the airlines exert power because no other qualified pilot can be found to handle the aircraft. An example against

2. The intensity of rivalry between competitors: rivalry in a sector can occur in different ways, either through discounts, advertising battles, variety of products, among others. It is important to bear in mind that profitability may be affected according to the degree of rivalry for which there are certain characteristics that determine a high degree of rivalry between competitors such as:

The existence of several competitors, similarity on size and technical capacity. Slow growth of the sector High exit barriers, the existence of rivals projected to be leaders of the sector with not only economic purposes.

To increase the profitability of a sector it is necessary for competitors to meet the needs of different segments by offering a wide variety of products, prices, services, and brands, among others, for the purpose of a positive sum in relation to the rivalry of the sector.

3 Buyers' bargaining power: it is the opposite of suppliers' bargaining power and unlike this, when buyers are the ones who have the bargaining power, they manage to create a confrontation between competitors within the sector, turning into a price war, since buyers' objective is focused on obtaining a reduction in prices, but with better service and better quality, which leads to the sector having a breakdown in profitability.

4. The pressure of substitute products or services: this force refers to products or services that satisfy the same or a similar need in a specific sector. However, it is common for the consumer not to perceive the existence of such substitutes because they may appear very

61 different from the product or service to be replaced. Therefore, it is important that companies focus their efforts on improving the performance of their products or services, advertising strategies, high quality standards, among others, in order not to affect their profitability because of the threats of substitutes.

5. The threat of entry of new competitors: the entry of new competitors in a sector tends to generate some pressure on three fundamental factors: price, cost and investment index. This is because new entrants seek to gain market share from strategies focused on those factors and new capabilities. This is why established competitors have an obligation to increase investment or keep prices low in order to face new competition and thus not affect the profitability of the sector. The degree of threat from new entrants depends mainly on the level of entry barriers and the perceived resistance of new entrants.

Combinations resulting from the interaction of these forces make it possible to establish the current performance and movement of a specific sector, as well as the favourability of the conditions for entering it.

The existence of substitute products in the national market is relevant due to the great variety of alcoholic beverages, among which are beer, rum, brandy, whiskey, vodka, tequila, but on the other hand the consumption of wine in the country has grown by an average of 7% in recent years/

Due to this increase in wine consumption, the market must be segmented in an optimal way, since consumer behavior in certain parts of the country is different. “In addition, it isextremely important to understand that, despite increases in taxes and wine prices, more 23 and more new competitors emerge motivated to explore this sector” .

While there is no wine culture in Colombia, there are signs of change. It is currently not limited to the higher income classes of society or to higher category hotels and

25 El Espectador. (2017). El vino en Colombia, un mercado en reserva. From El Espectador: https://www.elespectador.com/economia/el-vino-en-colombia-un-mercado-en-reserva- articulo-70655. 62 restaurants. Wine is becoming more and more popular, appreciated and consumed by everyone. In a decade, consumption has gone frombe one cup per inhabitant per year at1.5 litres.The wine market in Colombia has been afffected

Consumer preferences, together with the promotion efforts of the different actors to propagate the wine culture have transformed the scenario. Companies are trying to encourage wine consumption by giving more space in their establishments to wine products, in order to give customers a wide assortment by category accompanied by expert advisors to recommend and clarify doubt.

According to the spokesperson of the wine category for Grupo Éxito, Colombians for years were accustomed to consuming appetizers over traditional table wines, however, this trend has already been reversed. Today, 95% of the wines acquired in the market are red, white, sparkling and rosé varieties.

“Among the large cities, Bogota accounts for 80% of total wine sales in the country of imported wines, with the remaining 20% distributed among the other large Colombian cities.”24

24 Méndez, R. (2015). Formulación y Evaluacion de Proyectos, 5a Ed. Bogotá: ICONTEC Interancional 63 10.DIMENSIONS OF THE MARKET

“In Colombia the demand for wines has increased 6% in volume and 8% in value in 2017 compared to 2016, reaching a turnover of 674 billion Colombian pesos (337 million dollars) and 21 million liters. Average growth rates between 2008/2016 are 9% and 6% in volume and value respectively.”25 This growth was similar to the 2015 (7% in volume), among other factors due to the large influx of imported products and the new INVIMA import regulations.

The rate of growth in volume in 2017 was slower than the previous period, given that sales inflows in 2013, 2014 and 2016 were very high, many importers decided to enter the wine market, which led to a price war that lowered profits, making the business less attractive.

Colombian wines had a significant increase in consumption during 2013, the channels are of low quality and are characterized by lower prices than imported. A better performance of the national wines is expected in the coming years, as they are offered at affordable prices, improve their quality and the promotions of the Strategic Plan at the country level, which seeks to support this growth.

In the alcoholic beverages market, strong competition is expected for the coming years, with strong pricing strategies and brands, especially premium brands that will seek to attract consumers.

In 2013, sparkling wines had their strongest growth, 12% in terms of volume and 4% in terms of value. Among others, the American (Gallo) and Argentine (Chandon) led the sparkling wine market. The most popular cavas are Freixenet and Codorniu.

The national manufacturers with the highest market share were Bodega del Rhin with 22% of total sales volume in the market, Enalia with 10%, Vinos de la Corte with 7% and Casa Grajales with 4%. Bodegas Rhin increased its participation by having a variety of popular

25 Oczkowski, E. (2016). Hedonic price function and measurement error. The Economic Record, vol 77 , 374-382 64 Chilean, Spanish and Argentine wines in its portfolio. The importer with the highest percentage is Dislicores with 3% of the volume, as it imports the country's best- selling wine, Gato Negro. In 2013, Cabernet Sauvignon accounted for 52.4% of total sales volume, while Malbec accounted for 13.7%, Pinot Noir 12.1%, Merlot 10.1% and Shiraz/Syrah 3.7%, among others.

Red wines grew between 2012 and 2013 by 4.2% in volume and 8.8% in value; and grew on average at a CAGR rate of 4.8% in volume and only 1.6% in value between 2012 and 2013.2008 and 2013 to reach 5 million litres.

Whites have seen their consumption increase, with new brand launches, varietals and improvements in distribution, facilitating acquisition and providing more options available for the different tastes and incomes of consumers. It should be noted that its consumption has not been emphasized as a refreshing, mild and young alternative; following what is done in other countries.

Colombian women for reasons of health and aesthetics prefer them. Sauvignon Blanc leads the white wine market in volume with sales of 55.4%, followed by Chardonnay (21.2%).

Rosés are not very chosen in Colombia, representing 3% of total wine consumption. During the 2008/2013 period its consumption increased by 250.2% of total volume, recording an average annual growth of 28.5%. Cabernet Sauvignon Rosé accounts for 52.5% of rosé wine consumption, Zinfandel for 19%, Merlot Rosé for 15.3%, while the rest is very divided between the other varieties, but none of them shows a significant participation within the category.

10.1 CONSUMER PROFILE

The geographical and climatic characteristics of Colombia, make it suitable for the production of numerous varieties of fruit but not the vine, which requires for its cultivation special conditions. For this reason, it does not have a strong tradition in the production of

65 wine and is not a preferred drink at the time of consumption of alcoholic beverages.

“The main alcoholic beverage in Colombia is beer, followed by spirits and then wine. In terms of volume, consumption of alcoholic beverages increased by an average of 5% between 2008/2017. By type of beverage, the best performance was wine, with a CAGR of 9%; 80% higher than the average increase for alcoholic beverages as a whole, demonstrating a rapid average growth of the category within Colombian consumption.”29

As for beer, the CAGR was 5.3%, increasing its consumption a little more than the market average for alcoholic beverages. As for wine, traditionally in Colombia sweet wine has been consumed, so older people identify it to special occasions, consuming daily other beverages such as beer, brandy and rum.

“Sparkling wine consumption between 2005 and 2017 increased by 54.8% of the total volume at the end of 2005. An average rate of 9.1%. Sparkling wines are strongly associated withspecial celebrations, for which its consumption has a great seasonal component”26.

Women are an important segment of wine consumption, they prefer white wines, not only because of their taste, but also because in general they are less alcoholic and have fewer calories, although their consumption of red wines is increasing. They tend to drink wine regardless of the occasion, while men prefer them to accompany meals.

In Colombia, the average consumption pattern of alcoholic beverages (consumers only) shows a consumption frequency of 1.7 days a week; 12 drinks per week, 7 drinks per occasion of consumption.

The consumption of wine is associated as a companion to meals and family celebrations, while beer has a consumption socially accepted to accompany meals and for its health benefits. The largest consumption is on weekends with peaks on Saturdays; preferably at

26 Mtimet, N., & Albisu, L. (2017). Spanish wine consumer behavior: A choice of experiment approach. Agribuiness, vol 22 , 343-362 66 home or with friends/family. The consumption of wine is associated as a companion to meals and family celebrations, while beer has a consumption socially accepted to accompany meals and for its health benefits. The largest consumption is on weekends with peaks on Saturdays; preferably at home or with friends/family.

The incidence of consumption of alcoholic beverages varies according to age, educational level and economic stratum. The average wine consumer is between 30/55 years old and has a high economic level.

The wine promotion actions carried out by large wineries and wine associations in countries such as Argentina, Chile and the United States focus on the target population: 30/55 years, university education and a high economic level. These organizations seek to create a taste for wine, generating curiosity and trying to create a wine culture that was incipient in Colombia until now. Promotional actions seek to incorporate lower income groups into consumption.

This is how the concept of LOWXURY (LOW PRICE AND LUXURY) has become fashionable, gourmet products at low prices. Supermarkets Carrefour and Carulla, have popularized some imported wines, allowing Colombians to enjoy the wine and buy it.In recent years consumers have expanded their knowledge, showing great interest in varietals such as Argentine Malbec, Cabernet and Pinot Noir.

How much money would you be willing to pay for a bottle of wine?

(COP)

GRAPHIC 8 How much money are you willing to pay for a bottle of wine?27

27 Own elaboration graphic, information coming from ANDI (Asociacion Nacional de Industriales -2017) 67 Price is the main variable that influences wine consumption. The rest of the factors that condition purchasing decisions (quality, organoleptic qualities, image, prestige, etc.) do not play a determining role for Colombians.

“The consumption of alcoholic beverages in general is mainly at home. private individuals or relatives and friends (47%) followed by bars, discotheques and neighbourhood shops (32.10%).”28The average consumer prefers glass bottles because they preserve the properties of the product better, even though they buy other containers because they are cheaper. This is changing as wines are introduced to the market in low-priced glass bottles.

In Colombia, the average consumption pattern of alcoholic beverages (consumers only) shows a consumption frequency of 1.7 days a week; 12 drinks per week, 7 drinks per occasion of consumption.

In 2017, the total volume of champagne sales increased by 10%, as a result of the strong promotion of champagne in bars and restaurants. Their prices fell as a consequence of the reduction in tariffs, due to the Free Trade Agreement that was signed with the European Union, which has generated very positive results. Global Wine & Spirits developed a strategy to encourage businessmen between the ages of 27 and 40 to consume sparkling wines and champagne at any time, and not only in special

28 http://www.guiadelvinocolombia.com 68 celebrations.

Fortified and vermouth wines also experienced a price reduction of around 30%, with a very favourable response from consumers, resulting in a 6% volume increase in their total sales. “66.5% of sparkling wine sales in 2017 were recorded in the Super Premium wine price segment, above COP 25,000 (USD 12.50), 27.5% in the segment from COP 13,000- 24,999 (USD 6.50-12.49) and only 6% were recorded for lower prices.to COPs 12,999 (USD 6.49)”29.

“Sixty-eight percent of red wine sales were made at prices below COP 20,000 (USD 10) in 2015. 31% of sales are recorded at prices above COP 20,000 (USD 10) and are mainly concentrated between COP 20,000-24,999 (USD 10-12.49)”30. Almost 71% of rosé wine sales occurred in the price range between COP 8,000 to 18,999 (USD 4 to USD 9.49) in 2013, 10% at lower prices and 19% at prices above COP.

19,000 (USD 9.50). It can be seen that sales are concentrated in the popular Premium and Premium price segments.

10.2 SALES CHANNELS

Colombia has traditionally had a highly competitive retail trade resulting in much of the geographic segmentation that is presented in its interior. Although the advance of supermarkets and hypermarkets has been great in recent years, the traditional distribution channel (neighborhood stores) still captures 50% of the market. This situation tends to change as the presence of multinational chains increases and they gain market shares.

As for the wine market in Colombia, distribution takes place mainly through the off-trade channel, through chains of hypermarkets, supermarkets and delicatessens. Unlike other products, there is a small residual percentage that is sold in neighborhood stores in large

29 Parra, A., & Saavedra, L. (2013). Comportamiento del Consumidor y Posicionamiento de los Medios de Comunicación Impresos. Marketing Visionario 30 Parra, A., & Saavedra, L. (2013). Comportamiento del Consumidor y Posicionamiento de los Medios de Comunicación Impresos. Marketing Visionario 69 cities and towns, but the volume of sales is really small.

The consumption of wine in Colombia is common at home, during dinner with family or friends, so the weight of the off-trade channel, reaching 88% of sales volume and 57% in value.

According to Nielsen studies, the participation of Grupo Éxito exceeds 65% among the large chains, with Carulla being the leading chain with a market share of 36.8% and Éxito with 27.7%. Grupo Éxito estimates that it has 500,000 customers who consume frequently in this category. The average consumption of a successful client is $27,000 per visit while a Carulla client exceeds $47,000 per visit.

If you decide to buy a bottle of wine, where would you buy it?

GRAPHIC N° 9 Where would you buy a bottle of wine?31

Customers carry almost two bottles per visit. For this reason, expert communities have also been created for wines such as Éxito and Carulla, ViveVinos.com, where they can access discounts, invitations and exclusive launches. According to figures from Grupo Éxito, Colombians prefer red wine at a lower price.

31 Own elaboration graphic, information coming from ANDI (Asociacion Nacional de Industriales -2017 70 59%, followed by whites 15%, sparkling wines 12% and rosés 8%. “Grupo Éxito sells $1.7 billion a year in sweet wines and $1.2 billion in Brandy. These products are widely used in Colombia's cocktail bar.Importers and distributors try to educate and create a wine culture in Colombia in order to increase wine consumption.”32

Changes in the policies of Cencosud, who bought the Carrefour supermarket chain in 2014, also affected the wine market. Cencosud decided in 2016 to import wines directly and did not sell as much as Carrefour usually did, with 2017 being a transition period in which they had to get to know the Colombian market and its consumers. Supermarkets are incorporating a greater variety of wine products and offer expert services in order to advise consumers and answer their questions.

These establishments have increased the physical space available for the wine section, especially in cities such as Bogota, Cali and Medellin?“On-trade consumption has also strengthened with a 6% increase in volume in 2016 compared to 2014, as new generations learn about wine, its pairing and restaurants/hotels promote their consumption.”33

Wine distribution channels in Colombia have undergone an important change in recent years. In the beginning, large distribution chains bought wine from distributors, importers who brought it from other countries.The more direct or short channels, allow to eliminate the commercial margin of the intermediaries with the objective to reduce the prices to the consumer or to increase the commercial margin of the retailer.

The distribution format of hypermarkets and supermarkets is growing; there are many openings of establishments. The importer's relationship with supermarkets is similar to that seen in other countries and includes, for example, a "confidential" discount ranging from 15% to 20%, along with support in promotional activities, in which the discount on products is assumed on the one hand by the supermarket and, on the other, by the

32 Dinero magazine – September 2016, written by Alfonso Castrillon page 27 33 Dinero. (2017). Consumo de vino sigue creciendo, pese a más impuestos y desaceleración. From Revista Dinero: http://www.dinero.com/empresas/articulo/consumo-de-vino-en- colombia-expovinos-2017/247344 71 importer.

In Colombia transport costs are quite high due to the high cost of air transport and the very poor land infrastructure due to the complicated orography of the country.

The main actors in the distribution of wines in Colombia are the importers. Three types can be identified:

Major importers: Total imports greater than 500 thousand dollars. They are characterized by maintaining a strong presence and tradition in the market. They have national coverage, manage in their portfolio wines of different origins and represent several vineyards. They have the financial support to carry out, together with the exporter, constant marketing activities at a national level. In general, they have a strong relationship with the wineries that supply them and have been working for several years positioning their wines, which diminishes the possibility of representing new brands.

Medium importers: Imports between 100 and 499 thousand dollars: As in the case of the big ones, they have a long tradition in the market. These types of companies are characterized by having a smaller wine offer than the segment described above and represent at least one winery. Their financial capacity is lower compared to larger importing companies, but they can carry out brand positioning activities in a timely manner and targeted at specific audiences.

Small Importers: Imports of less than $100,000: Relatively new companies in the market, in most cases their distribution is local and serves channels such as restaurants and those that import in a targeted manner. Sporadic. In general, they represent a single vineyard, so their supply is less than 22 dimension.

The exporter can introduce his products through supermarkets or importers. The former sell to the final consumer, while the latter supply supermarkets (self-service supermarkets whose sales area varies between 80 and 1600 m2) and distributors/wholesalers. The

72 superetes supply end consumers, hotels and clubs. The distributors/wholesalers distribute between the shops and the HORECA channel.

10.3.SOME CHARACTERISTICS OF THESE DISTRIBUTION CHANNELS

-The distribution channel occupied by the chain of specialized wine stores is a long channel, given its route from the vineyards to the importer and from the importer to the final consumer.

It should be noted that there is an additional marketing channel, which has the characteristic of being informal. It distributes products that have left the supermarkets at lower prices and even distributes smuggled goods.

The most purchased products are Computer/Electronics, Fashion and Leisure. Purchases are closely linked in fixed devices (laptop or computers).It is very minority that made from mobile devices. 76% have used the Internet to find out about products they have finally bought offline.

Its strength as an information channel is especially relevant for Electronics/Computer Science, Fashion, Food and Beverages. It must be borne in mind that the online buyer corresponds to an age profile between 25/34 years and clearly linked to upper/middle income classes.

The consumption of wine in Colombia is common at home, during dinner with family or friends, so the weight of the off-trade channel, reaching 88% of sales volume and 57% in value.

As for Internet shopping, a study conducted in Colombia found that “52% of Colombian intensive Internet users have purchased at least one product or service online by 2016 (47% if entertainment and travel are excluded).”34

34 https://www.larepublica.co/empresas/exito-es-el-mayor-vendedor-de-vino2523377Martinez, D., & Milla, A. (2012). Analisis del entorno 73 According to Nielsen studies, the participation of Grupo Éxito exceeds 65% among the large chains, with Carulla being the leading chain with a market share of 36.8% and Éxito with 27.7%. Grupo Éxito estimates that it has 500,000 customers who consume frequently in this category. The average consumption of a successful client is $27,000 per visit while a Carulla client exceeds $47,000 per visit.

Grupo Éxito sells $1.7 billion a year in sweet wines and $1.2 billion in Brandy. These products are widely used in Colombia's cocktail bar. Importers and distributors try to educate and create a wine culture in Colombia in order to increase wine consumption.

The importer must pay this tax when the product enters the Colombian customs territory. In order to determine the value to be paid, the alcoholic strength of the product must be taken into account, as established below:

-For products up to 35 degrees of alcohol content, two hundred and seventy-two pesos (Col $ 272.00) for each alcoholic degree. This value corresponds to US$0.16

For products with more than 35 degrees of alcohol content, four hundred and forty. pesos (Col $ 446.00) for each alcoholic strength. This value corresponds to US$0.26. 24

Approximately 35% of the value that is paid for Consumption Tax, corresponds to the VAT. below,shows the colombian taxe table for the wines and other kind of beverages coming from America and overseas. The codes are the easiest way to differenciated the ítems and allow the importers to fill up the bureocratic papers.

Tabla N° 2 Tax table in Colombia for alcoholic imported beverages.35

35 Lopez, A., & Martínez, G. (2016). Estudio de los Habitos de consumo de vino en Bogotá. Universidad de los Andes: Tesis Magister en Administración 75 11.PHYTOSANITARY REQUIREMENTS

In order to import this product, the sanitary registry must be filed with the Institute for the Surveillance of Medicines and Foods (Instituto para la Vigilancia de Medicamentos y Alimentos INVIMA), whose requirements are established in Decree 3075 of 1997.

Additionally, Food Regulations under resolutions 1528 of 2002, Res. 20020078 of 2002, Res. 243711 of 1999 and Res. 243710 of 1999 govern alcoholic beverages.1999, in addition to which are of great importance for theProduct Labelling.

Before start all the process to get approved the importation of wine it’s essential to keep in mind the steps in order to fill up correctly all the forms need it and therefore put a new product in the market. I would mentioned above what is is important to realise this process succesfully. Classify your products through the Nice International Classification.

This is a classification in which you must select one or more classes to specify which products and services you want to protect through the trademark application. consult through the website by clicking on the horizontal property tab, look for the button MGS Manager of products and services WIPO.

Thanks to the agreements signed by Colombia, all wines from MERCOSUR (Argentina, Brazil, Uruguay and Paraguay) and the Andean Community (Bolivia, Ecuador, Peru and Venezuela) are exempt from import duties. The European Union, on the other hand, must pay a tariff of 15%. Upon entry into force of the Trade Agreement negotiated between Colombia and the European Union and following ratification the import of wine from the European Union will be exempt from tariffs.

As you will see in the Annexe I’ll add a a form and alll the papers it is necesary in order to import, legalize and get the autorization from Colombian authorities to sell the product in Colombian terrotory, to get done all the paper work you need at least two months toget all the bureocratic hierarchy to accepted your demand, to launch a new product in the market.

76 Besides the time which is very long, you must pay around 1.800 euros, in order to have the opportunity to get your file (product) analyse by the INVIMA which is the gouvernamental agency which is in charge to allow a new product to be in the market., when you get the aithorization you get 10 years of exclusivity to import and distribued the good. (Annexe 1)

Labels must contain the following information:

1. Name and brand of the product.

2. Name and address of manufacturer / warehouse 3.Name and address of importer 4. Health Registration Number INVIMA

5. Alcoholmeter content expressed as % by volume

6. Net content expressed in units of the International System

7. Mandatory legends:

"THE EXCESS OF ALCOHOL IS HARMFUL FOR HEALTH" (Law 30 of 1986) that

must occupy at least one tenth of the label. "PROHIBIT THE Spreading of EMBRIAGANT DRINKS AT MINORS OF AGE" (Law 124/1994°).

77 CONCLUSION

Even if the Colombian wine market is still a young and is part of a hostile environment (notably because of very fierce competition), many opportunities remain and it seems destined for a bright future. The challenge now is to grasp it correctly, by adapting and introducing wine culture, without frying the steps. For example, it would be unconscious to get focus in a región different tan the capital Bogota, to, given the scale of the task to be performed, and the results that would take a long time to arrive at a huge cost.

Due to its fragile financial resources, it is first necessary to focus on the major cities in Colombia, with an emphasis on large accounts, and food fair trades organaize during the year. Then, afterwards, start developing other cities, in a very thoughtful way, optimizing spending as little as possible. In addition, in a few years' time, it will be necessary to rethink an effective strategy for the norht coast in Colombia.

Another development path that may be interesting to exploit in the future for the colombian wine market is wine tourism. This is a phenomenon that is becoming more and more important in Colombia thank’s to the tourism boom, but which has not yet fully found its place. It is also quite rare for merchants or wine merchants to engage in this type of activity.

Wine tourism could be a way to distinguish itself for the Young wine importers to diversify, by offering an additional service. This would also strengthen sales in other channels as Internet and in wine cellars. This is a possibility that should be explored in the short or medium term, when it will be necessary to rethink the organisation of the way the costumer is approach. Even if this activity requires substantial financial and human resources (organisation of visits, tastings, reservations, promotion) it can be very profitable, which is why it is important to anticipate possible opportunities in this field as soon as possible. Nowadays, online commerce is taking an increasingly important part in retail trade. All products can be found on the internet, from the most prestigeous Chateaux as “Mouton Rotschild) laffite, Romanée Conti to organic wines. Marketplaces generate several tens of millions of visitors, as many potential buyers.

78 Today, the wine colombian market, thought the Young wine importers could make additional sales, which allow te consumers to know different kind of wines.Given the potential of Young buyers, we can imagine that in the long run manufacturers will decide to create new products specific to the Young people .

If, for the time being, manufacturers' sales on the Internet, through the marketplaces, are limited to destocking, we can hypothesize a reversal of the trend: merchants will increasingly sell products in range via the Internet, in order to attrack younger consumers whom are interested in discover new products, since wine is still unknown for many consumers this way of promoting could not just boost the sales but allow more people to get in touch with wine and it’s characteristics.

Distribution is a major challenge for companies as wineries. It will be increasingly so in the future, with the development of technology, online activities, and because the Internet offers almost infinite possibilities to buyers but also to sellers. Only those players who are able to adapt to change will remain on the market, even if wine is consider a traditional good and the consumers prefer to buy it in a store in few years internet could become the easiest way to sell wine no just to the youngest generation but to al the wine lovers.

For this reason, more and more merchants are engaging in online sales directly. In this way, they hope to reach end customers directly and better control their distribution chain in order to maximize their profit.

However, the fact that a manufacturer launches out on the Internet can create animosities on the part of its physical distribution network. At this momento of the market, where is sorely increasing Internet would be a very effective tool to spread wine culture We have seen the reasons for this, they essentially come from a difference in objective between the manufacturer and the distributors.

The former way was based in increase its margin while reducing intermediate distribution costs, and the latter want to increase the cost borne by the end customer in order to increase their distribution gains. A distribution conflict also arises when one channel, such

79 as the Internet, serves the same customer segment as another channel, physical stores. Even if the colombian wine is still a young, barely expanding and is part of a hostile environment (notably because of very fierce competition, economical and social situation), many opportunities remain and it seems destined for a bright future. The challenge now is to grasp it correctly, by adapting to the market, without frying the steps.

For instance, it would be unconscious to have more than 6 references if you are not longer than 10 years in the market (bureocratic papers, taxes and goverment fees) would make very difficult to survive. Due to its fragile situation colombian wine market is important to start developing not just in the big cities but too in the medim small., in a very thoughtful way, optimizing spending as much as possible. In addition, in a few years' time, it will be necessary to rethink an effective strategy to promove wine by the oenptourism as well. As mentioed above another development path that may be interesting to exploit in the future for is wine tourism. This is a phenomenon that is becoming more and more important worlwide, but which has not yet fully found its place. It is also quite rare for merchants or wine merchants to engage in this type of activity. Wine tourism could be a way to distinguish itself again the concurrents and to diversify, by offering an additional service. This would also strengthen sales of the wines promoted and make it possible to establish close links with the vineyards in Sout America (possibility of establishing exclusivity for the sale of wines, allocations for futures...).

Even if this activity requires substantial financial and human resources (organisation of visits, tastings, reservations, promotion) it can be very profitable, which is why it is important to anticipate possible opportunities in this field as soon as possible.

80 BIBLIOGRAPHY

-Chapman, A. (2004). Análisis PEST. From Análisis DOFA y análisis PEST: http://www. degerencia. com/articulos. php.Definicion.de. Definición de cepa. From https://definicion.de/cepa/

-Dinero. (2015). Bogotanos son los que más consumen vino. From Revista Dinero: http://www.dinero.com/negocios/tecnologia/articulo/bogotanos- mas-consumen- vino/153060 -Dinero. (2017). Consumo de vino sigue creciendo, pese a más impuestos y desaceleración.

-From Revista Dinero: http://www.dinero.com/empresas/articulo/consumo-de-vino-en- colombia-expovinos-2017/247344

-El Espectador. (2017). El vino en Colombia, un mercado en reserva. From El Espectador: https://www.elespectador.com/economia/el-vino-en-colombia-un- mercado-en-reserva- articulo-706551

-El Heraldo. (2017). Un colombiano toma en promedio 51,4 litros de licor al año. From El Heraldo: https://www.elheraldo.co/economia/un-colombiano-toma-en- promedio-514- litros-de-licor-al-ano-328237

-Gennari,A.,& Estrella, J. (2015). Análisis del mercado del vino en países de Latinoamérica.Colombia, Villegas Editores -Guevara, L. M. (2017). Grupo Éxito lidera venta de vino con 59%, de un negocio que suma US$351 millones. From Diario la República: https://www.larepublica.co/empresas/exito-es-el-mayor-vendedor-de- vino- 2523377 -Exploring strategy O9 Edition, published by the Financial Times/ Prentice Hall,Copyright Simon& Schuster Europe Limited 1998 Pearson Eductation 2002,2011.

81 -Newspaper « El TIEMPO » 24 April 2017, appearing in the economics section of it, writting by Pedro Espiniza -Dinero magazine – September 2016, written by Alfonso Castrillon page 27 “consumo de vino sigue creciendo en Colombia” : http://www.dinero.com/empresas/articulo/consumo-de-vino-en- colombia- expovinos-2017/247344 -Parra, A., & Saavedra, L. (2013). Comportamiento del Consumidor y Posicionamiento de los Medios de Comunicación Impresos. Marketing Visionario.

-Lopez, A., & Martínez, G. (2016). Edicion Exernado de Colombia, Estudio de los Habitos de consumo de vino enBogotá. Universidad de los Andes.

-Dinero magazine – September 2016, written by Alfonso Castrillon page 27, revue number edition 1.234

-http://www.dinero.com/empresas/articulo/consumo-de-vino-en- colombia- expovinos-2017/247344

-Méndez, R. (2015). Formulación y Evaluacion de Proyectos, 5a Ed. Bogotá: ICONTEC Interancional.

-Oczkowski, E. (2016). Hedonic price function and measurement error. The Economic Record, vol 77 , 374-382.

-Porter, M. (2008). Las cinco fuerzas competitivas que le dan forma a la estrategia. From Harvard Business Review America Latina .

-Lopez, A., & Martínez, G. (2016). Estudio de los Habitos de consumo de vino en Bogotá. Universidad de los Andes: Tesis Magister en Administración, .

-National –profiles anual review CEPAL 2017.

82 -Ricardo Alarcon « Nuevos metodos de consumo » Editorial Alfaguara pag : 108, 2015

-Wines of Chile, Non profit organisation, charge of the development of chileans wines. Charles Dupere « the Charming Andes chain Mountain » 2016

83 APPENDIX

1. Importatation form, explaining the lote number; the name of cases, the provenance of the wine as the total liquid content.

2. Banking bill form, payed to the INVIMA (Sanitary agency) in order to get the authorisation to import a wine bottle.

3.* (4,5) fill form to filled up to expose your product at the INVIMA, very rigorous etape.

4.*(7,8) Packaging of the bag in box asn the description of the product and the place of provenance, alcohol content, and compulsory advertissements.

jeudi 22 novembre 2018

INTERPRETACION NUMERO LOTE

Estimados señores,

En las cajas de 3 litros de Bailloux Rival, está impreso el número de lote siguiente en la contra etiqueta, por ejemplo:

Para el vino rojo: L: número de lote BR: Bailloux Rival B: B1B3 l = caja de 3L 1S el 15: ano es decir 2015 01: el número de embotellado

Para el vino rosado : L: número de lote BR: Bailloux Rival BR: B1B3 L = caja de 3L rosado 17: ano es decir 2017 01: el número de embotellado

Para el vino blanco: L: número de lote BR: Bailloux Rival BB: B1B3 L = caja de 3L blanco 17: ano es decir 2017 01: el número de embotellado.

NfT 8b0.03

Professional Internship Report Analysis and trends of Colombian wine market

Harold Ramirez Salazar

Dissertation to obtain the degree of European Master of Science in Viticulture and Enology

Advisor: Prof. Francisco Gomes da Silva.

Jury: PRESIDENT :PhD Jorge Manuel Rodrigues Ricardo da Silva, Full Professor at Instituto Superior de Agronomia, Universidade de Lisboa.

MEMBERS:

PhD Luca Rossetto, Associate Professor at Università degli Studi di Padova; FORMATO ÚNICO PARA PRESENTACIÓN DE SOLICITUDES DE EXPEDICIÓNPhD O Manuel José de Carvalho Pimenta Malfeito Ferreira, Assistant Professor RENOVACIÓN DE REGISTRO SANITARIO PARA BEBIDAS ALCOHOLICAS with Habilitation at Instituto Superior de Agronomia, Universidade de Lisboa; PhD Francisco Ramos Lopes Gomes da Silva, Assistant Professor at Instituto "Los datos personales suministrados en el presente formulario serán tratados conforme a la "política de tratamiento y protección de datos personales GDI-DIE-PL018" Superior de Agronomia, Universidade de Lisboa. 1. INFORMACION GENERAL (Debe ser diligenciada en su totalidad y como sea soportado en el certificado de existencia y representación legal o

1.1 DATOS GENERALES DEL TITULAR ' Nombre o Razón Social PIERRE JACQUES AijAT Dirección: Calle 35 No. 5 - 59 Ofic. 501 Domicilio: Bogotá Pais: Colombia 2017 - 2019 Representante Legal X Apoderado Nombre: PIERRE JACQUES LAMAT e .e. No. I e.E. No.: CE No. 109.610 T.P. No.: Dirección de Notificación: Calle 35 No. 5 - 59 Oflc. 501 Domicilio: Bogotá e-mail ( CLARO Y LEGIBLE oierrelamat1®nmail.com Teléfono: 2 455152 - 2 850084 ACKNOWLEDGEMENTS

Nombre: PIERRE JACQUES LAMAT NIT:

2 455152 - 2 850084

2365352 - 04

2017

EXPEDICIÓN DE REGISTRO SANITARIO O RENOVACIÓN

CERTIFICACIÓN CON O SIN REGISTRO SANITARIO

AUTORIZACIÓN CON O SIN REGISTRO SANITARIO DESGLOSE

CANCELACIÓN (PÉRDIDA DE FUERZA EJECUTORIA)

Señor(a) Usuario(a):

CHATEAD BAILLOUX RIVAL ROSE 2017 Apellation Bordeaux Superieur controlée Mis en bouteille par Earl André Bassette a Landerrouat Gironde - France FABRICANTE Earl André Bassette a Landerrouat Gironde - France

IMPORTADO Y DISTRIBUIDO POR PIERRE J. LAMAT Calle 35 No. 5-59 ofic. 501 Bogotá D.C. Email: [email protected] REGISTRO SANITARIO INVIMA Consérvese entre 8° C y18° C de temperatura

FeWa de mm• de abierto

FeWa de mm• de abierto 13 % VOL. 5 LITRES Lot NºLBRB1601 EL EXCESO DE LCOHOL ES PERJUDICIAL PARA LASALUD Prolúbase el expendio de bebidas embriagantes a menoresfef