Value Chain Analyses for

Contents

•  History wine production

•  Tourism

•  Regions

•  Grapes

•  Exports

•  Quality

•  Corporate Social Responsibility (CSR)

•  Supply Chain

•  Stakeholders

•  Bottlenecks summary

•  Value Chain Map

•  Market opportunities

History

•  XV century start of viticulture with Spanish and Portugese traders

•  Cinti region in 1584, registered in Tarija in 1606, followed by 1618 in Samaipata

•  Through mining ‘Singani’ became popular against low winter temperatures

•  Priest Alejandro Corrado wine exported to Tucuman and Potosi in 1755

•  XXth century grape production > 1000ha

•  Increasing professionalism in production and distribution now reaching estimated 3000ha

•  Sector provides 5000 direct and 11000 indirect jobs

Tourism

•  Wine route started in Tarija 10 years ago

•  New project led by FAUTAPO include quality certification system for wine route, increasing tourism

Regions

•  in 2013 estimated increase to 2700ha (90% area in Tarija and Chuquisaca)

•  50 wineries active in Tarija, of which 33 registration SENASAG (health) and SIN (tax)

•  2200 small family growers in Tarija and Chuquisaca (0,5 - 1ha)

•  260 small size growers (1 - 5ha)

•  100 growers (>5ha)

Bottleneck - large local consumption of grapes and production of singani and artisanal Bottleneck - small economies of scale resulting in relative high cost prices

Grapes

•  Most planted varieties are Moscatel, Cabernet Sauvignon and Tannat. Moscatel is mainly used as base for Singani

•  International quality varieties as Cabernet Sauvignon, Chardonnay, Sauvignon Blanc, Merlot, Syrah, Malbec and Riesling account for only 22% of total grapes. This includes some local yet interesting varieties such as Tannat (Uruguay) and Torrontes (Argentina)

Type of wine" Grape Variety" Quintal (qq)" Percentage (%)"Table white wine" Moscatel de Alejandria" 28,960" 28.7"Table red wine" Black criolla grape" 10,231" 10.1"Varietal red wine" Favorita Diaz" 9,197" 9.1"Varietal red wine" Cabernet Sauvignon" 8,044" 8.0"Varietal red wine" Syrah" 5,523" 5.5"Table red wine" Grenach" 4,761" 4.7"Table red wine" Alfonso La Valle and/or Rivier" 4,296" 4.3"Varietal red wine" Malbec" 3,717" 3.7"Table red wine" Cariñena" 3,183" 3.2"Varietal white wine" Chenin" 2,742" 2.7"Varietal red wine" Merlot" 2,569" 2.5"Varietal red wine" Tempranillo" 2,237" 2.2"Varietal white wine" Ugni Blanc" 1,948" 1.9"Varietal white wine" Franc Colombard" 1,735" 1.7"Varietal red wine" Barbera de Asti" 1,702" 1.7"Table red wine" Cereza" 1,296" 1.3"Varietal white wine" Riesling" 1,087" 1.1"Varietal white wine" Sauvignon Blanc" 1,063" 1.1"Table red wine" Vischoqueña" 969" 1.0"

Others (includes 18 varieties) " 5,760" 5.5"TOTAL! 101,02! 100%!

Bottleneck - available grape varieties for exports

Grapes

•  in 2009 Cadastre registered 539ha table grapes, 689 wine grapes and 360ha singani

Bottleneck - local consumption of 10 million liters - limited interest for exports

Exports

•  Very limited exports, less then USD 50,000 per year (of which large proportion to China)

Bottleneck - limited knowledge and experience with exports Bottleneck - limited awareness of Bolivian wines in destination countries

Quality

•  No ISO registrations and limited quality assurance (HACCP)

•  Complicated quality registration process (SENASAG)

Bottleneck - no Certificate of Origin without quality registration

Corporate Social Responsibility (CSR)

•  Large proportion of family growers (limited social requirements)

•  Environmental standards are implemented scarcely

•  Required training and education to wineries and grape growers

•  Alcohol abuse (Singani)

Service to be delivered by Associations

Bottleneck - linking Singani with Wine brands might have negative effect on awareness and involvement of wine sector

Supply chain

•  No glass factory - limited local demand

•  Imports required for raw material such as glass and cork

•  Complicated and lengthy procedures for import

Bottleneck - dependency on import procedures

Stakeholders

Stakeholders

•  Wine Associations (ANIV, AMEVIT, ASOBOC, AVISA)

•  Limited budget, limited awareness, limited grapes, limited wineries

•  Co-operation, co-operation, co-operation

Bottleneck - co-ordination and sharing information between different associations

Stakeholders

•  Large institutional landscape with individual service providers (IBCE, FAUTAPO, CENAVIT, SENASAG, IBNORCA, CAINCO, CADEX, CANEB, FTE)

•  Some funds available for viticulture, export promotion (CBI, Dutch Embassy, BID)

Wine Sector Platform required to co-ordinate efforts

grape growers

dry goods suppliers

wineries

importers

retailers

consumers

supporting functions

rules & regulations

wine bso’s bso’s

ministry of agriculture

informing & communicating

quality control, taxes, permits

donor’s

Bottlenecks summary

•  large local consumption of grapes and production of singani and artisanal wines

•  small economies of scale resulting in relative high cost prices

•  available grape varieties for exports

•  local consumption of 10 million liters - limited interest for exports

•  certificate of origin without quality registration

•  linking Singani with Wine brands might have negative effect on awareness and involvement of wine sector

•  dependency on import procedures

•  co-ordination and sharing information between different associations

•  limited knowledge and experience with exports

•  limited awareness of Bolivian wines in destination countries

Market opportunities

•  There are a few EU markets that have potential

•  Open consumer opinion; markets that are open to new trends

(UK, Netherlands and to lesser extend Sweden, Denmark and Germany)

•  New wine markets; short wine drinking tradition, are open to try new things.

(Poland)

Market opportunities

Relative high production / export prices Relative small available export volumes

United Kingdom Netherlands Germany Denmark Sweden Poland

Bolivian wine focus on (Super) Premium category.

Specialist retail Horeca

Market opportunities - UK

•  Retail - 72,5% marketshare - nearly 1 billion liter

•  Specialist channel 8,3% market share - nearly 80 million liter

•  South American category 10% - approx. 8 million liter

•  Potential Bolivia 10% of South American category ?

Market opportunities - NL

•  Retail - 80% marketshare - 200 million liter

•  Big focus on wines below € 4,99 price point

•  South American category within Specialist channel 2,5 million liter

•  Potential Bolivia 10% of South American category ?

Market opportunities - DK

•  Retail - 80% marketshare

•  Large number of small importers with own specialist wine shops 27% of wines come from Developing Countries - 10 million liter

•  Potential Bolivia 5% of Developing Countries category

Market opportunities - Sweden

•  Retail - monopoly market (1 buyer) nearly 200 million liter

•  No specialist channel available

•  Small Horeca market

•  Potential Bolivia for a small tender with Systembolaget?

Market opportunities - Poland

•  New wine market - growing consumption, now estimated 50 million liter

•  Specialist channel - nearly 3 million liter

•  Potential Bolivia 1% of specialist wine sales ?

Market opportunities - Germany

•  Large market (50% own production/50% imports) nearly 2 billion liter

•  Only 3% of sales > € 5,00 - still nearly 70 million liter

•  Potential Bolivia 0,5% of premium category ?

Are we late?

•  In 2011 total Brazilian exports amounted to 705.000 liter

•  Brazilian exports to Netherlands started in 2011: 65.000 liter at $6,30 FOB

•  Largest quality international varieties planted:

•  Cabernet Sauvignon 1900ha

•  Merlot 1000ha

•  Moscat 775ha