Get Porty: How Port is attracting the next generation

Of all the wines, from all the regions in the world, Port is perhaps the most intriguing. Not because of its vast history, diversity and charm, but why people don’t drink more of it.

It is one of the best-value, complex and historic wines out there, oozing craft appeal and a heritage that brims with colonial battles fought over one of the most beautiful wine regions in the world. It has endured throughout the centuries as one of Britain’s most quintessential beverages. Yet its growth in the UK has, for the most part, remained reliably steady rather than stratospheric. It would be easy to blame Port’s proclivity towards winter nights and formal toasts, or its stereotype as an old-fashioned, formal tipple for restraining its appeal.

But this would be too simplistic, unfairly pigeonholing Port lovers. In truth, Port is a far more dynamic and evolving category than it is given credit for, and, unlike other fortified wines, is not in decline.

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The quality end

Consumption of fortified wines in the UK has almost halved in the past decade from 61 million litres in 2005 to 26m litres in 2015 – a drop of 50 million bottles in 10 years, according to the Wine and Spirit Trade Association (WSTA). In addition, UK alcohol duty on fortified wines has increased by 53% since 2007, adding £1 to every bottle of Port and Sherry sold in the UK. Duty on fortified wines is 33.3% higher than for still, and 4% more than sparkling wine.

But while Sherry and vermouth have seen volumes plunge, Port has remained robust at best, steady at worst. In 2016, almost 12.3 million bottles of Port were sold in the UK on- and off-trade, up by 0.3% on 2015, according to the WSTA, continuing an upward trend that has been in place since 2014. Furthermore, Port increased its share of the UK fortified market to 46%, maintaining its volumes, while Sherry saw its volumes decline by 4%, taking its market share to 52%. While modest, in the context of the UK’s beleaguered fortified category, Port stands out.

“We have quite a challenge because the fortified category generally has had some torrid years,” says Paul Symington, head of Symington Family Estates, whose brands include Graham’s, Dow’s, Warre’s and Cockburn’s. “Port is doing reasonably well, but a lot of the big-volume buyers lump us in with the whole category, so we have to spend quite a lot of time explaining that Port is doing very well.”

Likewise, Adrian Bridge, CEO of The Fladgate Partnership, whose brands include Taylor’s, Croft, Fonseca and Krohn, bemoans how the fortified category, and, by extension, Port, is so frequently written off as being in terminal decline.

He says: “Everyone has been trying to kill Port in the media since I have been in the industry: ‘Fortified drinks are in decline’. Yes, it is true that Sherry is in decline and some others, but you have to look beyond the headline and actually understand what’s happening.”

What’s happening is similar to trends being seen in other drinks categories, with volume sales broadly in decline, while value sales increase. According to Nielsen, which measures total off-trade sales at major grocers and impulse retailers, but excludes discounters and wholesalers, value sales of Port in the UK dropped by 2% in 2016, while volumes decreased by 3%. However, over a nine-year period, value sales have broadly risen by just over 7% to £77,230,292 in 2016, while volume sales have dropped by 20% over the same period to 6,295,300 litres, indicating growing strength in the category’s premium sector.

“If you look at any drinks category you will see that the volume or commodity end has declined and the value part has grown, and that is true of fortified,” says Bridge. “Because Port has always been positioned at the quality end, we have continued to do well while other fortified wines have seen the commodity element of their business decline. In all drinks categories you are seeing this shift from measuring your industry by volume to measuring it by value, which is the most important, because that provides the margin to reinvest.”

Similarly, over the past seven years, exports of standard Ports to the UK have dropped from 419,819 nine-litre cases in 2010, totalling €12.8 million (£11.3m) in value, to 375,068 and €11.8m respectively in 2016, according to the Port Wine Institute (IVDP), which records exports to individual markets but not consumer sales. Conversely, exports of premium Ports have increased from 559,083 nine-litre cases totalling €29.2 in 2010, to 588,038 and €35.2m in 2016. ‘Standard’ refers to all basic ruby, tawny, rosé and white Ports, with ‘premium’ encompassing everything else, namely aged tawnies, Colheitas, reserve ruby Ports, LBV and vintage Ports. In line with this trend, Symington acknowledges that sales of standard ruby and tawny Ports were “not crowing”, with modest declines of these categories occurring in Europe, which he said was a “long-term factor” that the industry had to accept. However, the outlook is very different at the premium end of the market.

According to Symington, global exports of aged tawnies, including 10, 20, 30, 40 and vintage-dated Colheitas, increased in value from €56.4m in 2010 to €75.3m in 2016, referencing statistics from the IVDP, an increase of €18m in five years.

“That’s phenomenal for what’s considered a very traditional side of the international wine trade,” says Symington. “It’s a huge credit to the various Port companies in innovating strongly in this category.”

Symington also highlighted that for the first time in 20 years, there had been a “significant and sustained” appreciation in the value of vintage Port, giving its Dow’s 2011 as an example of a vintage expression that has seen its value triple. According to Liv-ex, the market price of Dow’s 2011 (as of June 2017) is currently valued at £1,215 for a 12-bottle case, down from a high of £1,800 in 2015, but up from £450 when it was released in 2013.

“Over the past 15 years or so there hasn’t been much uplift in the vintage Port price in the secondary market,” says Symington. “But Dow’s 2011 has almost tripled in value in the secondary market. That has been the biggest hike in vintage Port prices since the early 1980s. We are proud for Dow’s, but more important is that people are now finding vintage Port exciting again. It’s a matter of fact that the great wines are traded through the houses, and the price reflects the worldwide opinion of the wines. You can’t get a more objective view.”

Marketing battle

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Port might be faring better than its fortified counterparts, but as a category it still suffers from a certain ‘lack of cool’, particularly among younger consumers – a challenge that its marketing teams have long battled to overcome.

“You can’t go to your older consumers that represent half of your base and say you’re doing it wrong, you should be drinking Port with tonic at a barbecue,” says Bridge. “They would say: ‘What are you talking about?’ Likewise, tell a youngster that Port is only for formal occasions and they would say: ‘That’s not how we live our lives. I’ll do things the way I want, I’m an individual.’ That’s the challenge we have, intergenerational consumption.”

Indeed, the gap between Port’s traditional pomp and ceremony and modern innovation is wider than in most categories, making a one-size-fits-all approach to marketing problematic. Protecting its traditions and maintaining its popularity among the ‘old guard’, while appealing to a fresh generation of younger consumers, whose lifestyles are at odds with the way in which Port has traditionally been consumed, is at the centre of Port’s marketing mission.

“We have that exact dilemma,” agrees Symington, “to preserve the best of the traditions but also appeal to the young. It’s not easy. If the Queen serves great Port at state dinners inevitably we are categorised with these great old traditions, and it can be very positive. Many regions would give their right arm to have that prestige. The reverse of that is that we can be seen as ‘uncool’.”

Indeed, the stereotypical view of Port is that of an ‘old fashioned’ drink consumed by suited men in private members’ clubs after a formal dinner. While this remains a large part of Port’s appeal and consumer base, it is a false representation of the category,” says Bridge.

Consumption moments

“Research we were doing 20 or 25 years ago showed that a little over 50% of Port consumers were male, which meant 46%-48% were female, and then about as many people over the age of 40 were Port drinkers as under. If we were just consumed by old men in clubs it would be simple to market, as you would have a distinct consumer. But we have men, women, old, young, and lots of different moments of consumption.”

For Bridge, consumers’ increasing knowledge of wine, and millennials’ taste for the authentic and unique has been significant in transforming consumption habits, which has been a boon for Port.

“Previous generations drank what they were told to drink by advertisers,” he says. “With less drinks advertising happening now, people are more exploratory and non-conformist. People worry less about being seen to do the right thing and are happier to express themselves. When I was living in London 30 years ago if you went to the pub and asked for a pink and tonic people would have said: ‘You’re a chap, why aren’t you having beer?’ If a lady asked for a pint of Best, people would say: ‘You should be having Babycham.’

“We didn’t have the level of confidence that this generation has. They are able to make informed choices because they have access to information and are much more individualistic. That’s good for Port. In a category that has such a wide range of styles, there is a style for everybody, and if they explore they will find it.”

This shift has helped clear a path for Port-based cocktails, and also opened up the market for younger-vintage Ports and chilled Tawnies, trends that rail against a traditional approach to Port.

“Consuming vintage Port young – 30 years ago people would say: ‘How dare you – this is infanticide! Of course, it isn’t,” says Bridge. “If you like big, fresh, fantastically fruity wines with real depth and flavour, young vintage Port is an obvious place to go.”

In terms of cocktails, Quinta do Noval was among the first to launch a Port made for mixing in 2010 with its Noval Black. In 2006, Fladgate launched Croft Pink, Portugal’s first rosé Port, and in doing so created the Pink and Tonic cocktail. However, it is white Port that is most strongly driving a trend for Port-based cocktails. The White Port and Tonic, garnished with mint and served with plenty of ice, was recently declared the ‘drink of the summer’ by the Evening Standard, with exports of this style to the UK growing by 38% last year, according to the IVDP.

Tania Oliveira, PR and communication director for Sogevinus, which owns Kopke Port, believes white Port could be a “real game changer” for Port, opening up the category to new moments of consumption. “So often there is a preconception about Port as an old-fashioned drink that aunt Betty drags out each Christmas,” she says. “In fact, the wines are vibrant and suited to a modern lifestyle. We have worked with mixologists to show that Port is a hero ingredient for cocktails.”

Sleeping giant

Alex Down, brand manager at Fells, Symington’s UK importer, also believes in the power of white Port to transform the drink’s fortunes, describing it as a “sleeping giant”.

“While it should be remembered that white Port represents a very small segment of the overall market, it’s nevertheless exciting to see a non-traditional category emerging like this,” says Down, who adds: “Kids today coming out of university in their early 20s are seduced by craft beer and vermouth. Port isn’t even on their radar. Unless we do something to show them that Port is relevant, in 20-30 years from now the market won’t be in a very happy place.”

For Symington, aged tawnies and Colheitas are proving instrumental in the battle to take Port “outside of the traditional golf and livery clubs”, enticing younger consumers to the category by encouraging less formality, while also driving sales at the premium end of the market. “Your average Brit sees Port as pretty traditional – reserve and LBV,” says Symington. “Tawnies are the opposite. They are pale and delicate. They don’t need to be decanted and can be served chilled from the bottle. It’s a really exciting area. We have had phenomenal success in London restaurants. It’s better for the sommelier; the wines keep well after opening, so it ticks all the boxes.”

In the 12 months to 25 March 2017, fortified, driven by Port, was the only wine category besides sparkling to grow in the UK on-trade, according to the WSTA’s Q2 Market Report, rising 5% by volume and 4% by value. Alternative formats have played a part in rejuvenating the tawny category, says Symington, particularly in the on-trade. Last year Graham’s launched a range of aged tawnies, including a 1952 and 1972 vintage Colheitas, in 4.5 litre bottles, and at the other end of the scale, 20cl miniatures for its 10, 20 and 30 year old tawnies in an effort to broaden its appeal and make the category more accessible.

“We have so much right but we have a lot of baggage and we have to use the best of our baggage to overcome the idea that ‘Port is what my Dad used to drink so I would prefer not to’. Our biggest challenge is to stay relevant to younger people. We can’t live in the past.”

In an otherwise subdued fortified wine market, Port offers a glimmer of hope. It might not be leaping ahead in double digits, but its success in raising its value to ride out a drop in volumes, while other fortified wines have simply seen their volumes decline, is a victory.

Its challenge will be maintaining the momentum it has built among a younger set of consumers, who it will need to carry the Port flag forward, in whatever guise that might take. db