Viña San Pedro

5711 Words Jan 3rd, 2012 23 Pages
Viña San Pedro
Viña San Pedro (VSP) was the third largest winery in Chile, with 1998 sales of 37 billion Chilean pesos (CP). Bonifacio Correa had planted the original vines with French stock in 1865 on the farm in Molina that the family had owned since 1701. For years, VSP wines enjoyed a reputation of being one of the finest in the country, and the vineyard remained in the Correa family until 1941. New owners expanded the vineyard so that by 1994, 1,150 hectares1 were in production, making it the largest single-site vineyard in the country. It was, however, barely profitable and survived primarily by producing inexpensive wines for the domestic market.
Compaña Cervecerias Unidas
In 1994, Compaña Cervecerias Unidas S.A. (CCU), a
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The balance of 24 million liters was sold domestically and was created from grapes purchased from independent growers.

CCU had also assumed responsibility for the distribution of VSP wines in all but the most remote areas of Chile and quintupled the number of customers to 30,000. Domestic sales increased by 29 percent between 1995 and 1996, although a 5.5 percent rise in the average price for a case of wine sold had contributed to this increase. In 1996, after three years of losses, VSP finally boasted a profit of CP 305 million. (See Exhibit 4 for VSP financial statements.)

In 1997, Matias Elton joined VSP as president. A graduate of Georgetown University and experienced in the U.S. fruit importing industry, he was charged with the task of growing domestic market share, increasing quality to capture higher margin sales, expanding export sales, and achieving further economies of scale.

During Elton’s first year, another CP 17.7 billion was invested to further increase capacity. New hectares of vineyards were acquired and planted, storage capacity increased to 36.3 million liters, and bottling capacity expanded from 22,600 to 25,100 bottles per hour. During the year, VSP’s total production grew to over 44 million liters of wine, 45 percent of which was from its
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