Portugese still wines and Port post-pandemic revival driven by innovation

Cocktail hour: younger drinkers enjoy Port and tonic apéritifsAsia, however, has been “very tricky”, Forbes acknowledges, as mainland China and Hong Kong have been hit by renewed lockdowns, with Japan only gradually starting to reopen. In this rather gloomy scenario, the “boom” in Port sales in South Korea has been a welcome bright spot.

‘Last year, we also rereleased a small quantity of Dow’s, Graham’s and Warre’s 1994 vintage Ports from our own cellars, which proved popular, particularly in the on-trade’

Bridge attributes this to a Samsung global conference held in Porto in January 2018, when the company booked up The Yeatman Hotel for a month. As a direct result, Porto began to see increasing numbers of South Korean visitors, and interest in Port rose in the country. “That essentially put Porto on the map,” he says. “I believe that has been an important catalyst for awareness – there is an interest that can be capitalised on to drive sales.” For Harry Symington, communications and vintage Port manager at Symington Family Estates (SFE), 2021 was characterised by continued difficulties for the on-trade, but more soaring demand in retail, with markets including Portugal, UK, France, Germany and the US all showing significant value and volume growth.

As on-trade sales continue to recover in 2022, this is bringing renewed momentum for premium Port sales – everything from Graham’s aged tawnies to reserve rubies such as Cockburn’s Special Reserve in the UK, Graham’s Six Grapes in the US, and Graham’s LBV globally.

Symington also highlights “huge growth” in the UK for single-quinta vintages, such as Graham’s Quinta dos Malvedos, Dow’s Quinta do Bomfim and Warre’s Quinta da Cavadinha. He adds: “Last year, we also rereleased a small quantity of Dow’s, Graham’s and Warre’s 1994 vintage Ports from our own cellars, which proved popular, particularly in the on-trade.”

The premiumisation trend is even taking root in France, a country traditionally awash with cheap commodity Port sipped as an apéritif. Here, Fladgate’s distribution arrangement with Champagne Philipponnat is bearing fruit, says Forbes, while Bridge describes a generational shift in which younger consumers are rediscovering Port – but LBVs and reserve rubies and tawnies, rather than the cheaper liquid enjoyed by their grandparents.

PREMIUM PORT

Both Fladgate and SFE are squarely focused on premium Port, but producers with a greater emphasis on the commodity markets of continental Europe are also seeing an uptick for their higher-priced products.

“We have observed this with our Cruz 10yo reference, and we have also seen it recently with the launch of our Decanter Colheita 2011 at the end of last year in Portugal,” says Constance Descamps, international marketing manager for Porto Cruz at La Martiniquaise.

Similarly, António Saraiva, winemaker and general manager at Vranken Pommery-owned Porto Rozès, reports positive trends in Denmark, Portugal, and Belgium, but disappointing sales in France, one of the company’s biggest markets. “One fantastic thing about Port is the premium categories, and we are facing an unexpected growth in the aged tawnies, and some less volume in the ruby categories, especially in vintage and LBVs,” Saraiva says.

In all price segments, Port’s everexpanding diversity is a key factor in modernising its appeal among consumers. Beyond the traditional ruby and tawny categories – although these too have seen their fair share of innovation with high-end aged tawnies and singlequinta vintages – there is white Port, pink Port, and, most recently, Portonic RTDs – a mixture of Port and tonic.

‘One fantastic thing about Port is the premium categories, and we are facing an unexpected growth in the aged tawnies, and some less volume in the ruby categories, especially in vintage and LBVs’

Over the rooftops: Porto

“The category is developing, innovating and resisting the tumult of time and of the market, as shown by the innovations of Pink or Portonic, which have the will to seduce younger audiences through modern consumption methods,” says Descamps, highlighting Porto Cruz’s summer Cruz Fresco campaign in Portugal, France, and Belgium, which champions the Port-and-tonic serve. The company has also partnered with tonic maker Schweppes in the three countries for outdoor advertising, in-store displays and promotions.

“Fifty years ago, the Port market used to be just ruby and vintage,” says Bridge. Since then, the innovation stream has been more or less constant, from LBV to reserve rubies, pinks and RTDs.

“You’re able to capture the attention of different age groups of consumers,” Bridge adds.

“It’s an inherent strength of Port, that it has the capacity to innovate.”

‘The category is developing, innovating and resisting the tumult of time and of the market, as shown by the innovations of Pink or Portonic’

Port is also still a dominant feature of Portugal’s presence in the fine wine sphere, accounting for 98% of Portugal’s trade by value, and 94% of the number of Portuguese wines traded, in 2021, according to Liv-ex figures. While last year the Port 50 index was more or less flat, some wines recorded double-digit price increases, with Dow’s and Graham’s the best performers (rising by 44.5% and 44.1% respectively).

Innovations: Porto Cruz is adding new tastes to its range

But could Port’s dominance be challenged? Some merchants, such as Justerini & Brooks, have recently made an effort recently to expand their Portuguese wine offerings. “We have seen a burgeoning demand for small family estates and indigenous varieties from Spain in particular over recent years,” explains J&B buyer Mark Dearing. “Portugal seemed to me a natural next step.”

Dearing acknowledges that Portugal’s diversity and complexity is at once both attractive and difficult to communicate, with plenty of interest beyond the Douro.

‘Mountainous old vineyards in the Dão region have huge appeal. Field blends, granitic soils, high elevations, no need for excessive gloss or oak ageing; authentic wines’

“Mountainous old vineyards in the Dão region have huge appeal,” he says. “Field blends, granitic soils, high elevations, no need for excessive gloss or oak ageing; authentic wines. I’d also highlight a refinement and more quality approach being taken in Bairrada with regard to Baga – traditionally a bit rustic, but in the right hands a hugely characterful grape variety. Vinho Verde, defying expectations, has great potential when it comes to fresh whites, provided yields are controlled and the fruit is given a chance to show at its best.”

Even so, the Douro remains the shining star of Portuguese wine, giving the valley’s wines – in Saraiva’s words – “immediate legitimacy” because of the associations with Port. Saraiva outlines growth for Rozès’ Terras do Grifo, especially at Reserva and Grand Reserva level, but also positive trends for Douro whites and rosés, sourced from high-altitude vineyards. “There are not so many wine regions in Europe with this capacity,” he points out.

Meanwhile, Descamps reports continued double-digit growth for La Martiniquaise’s Douro wines, singling out Belgium, the US, Switzerland, and the UK as particular highlights. Whites and rosés are outstripping reds in growth terms, she says, echoing Saraiva’s words on Reserva and Grande Reserva reds – with sales rising at five times the rate of standard wines.

ESTATE WINES

While still firmly rooted in the Douro Valley, Symington Family Estates is rolling out wines from the company’s Alentejo estate, Quinta da Fonte Souto: an Alfrocheiro as its first single-varietal red, launched this year, following last year ’s unveiling of a rosé, made with Aragonez.

In the Douro, the company continues its mission to, in Harry Symington’s words, “produce the most elegant expression of a Douro DOC” with the Chryseia Prats + Symington joint venture, established in 2000. “Over the past two decades, we believe this wine has significantly contributed to the development of Portugal’s fine wine category and the growing interest in Portuguese wine that we see today,” Symington says.

River view: the Douro flowing through Porto

‘Over the past three years, we have refocused our portfolio, launching new wines, and increasing our efforts on communications with the help and commitment of our local partners’

Portuguese wine is increasingly seeing an enhanced premium focus that is driving value growth in the markets, as well as changing perceptions among trade and consumers alike. “Over the past three years, we have refocused our portfolio, launching new wines, and increasing our efforts on communications with the help and commitment of our local partners and teams that have been a great support to build our brands in their markets during these challenging times,” says Nuno Cabral, chief marketing and sales officer at Esporão. The result for the company was sales growth of 15% in 2021, its strongest year to date, with even better performances from estate wines Herdade do Esporão in the Alentejo, Quinta dos Murças in the Douro, and Quinta do Ameal in Vinho Verde.

In Port and unfortified wine – reds, whites and rosés, and at all price points – one factor is key to driving increased awareness, appreciation and sales of Portuguese wines: tourism. As this begins to open up again after the pandemic, it’s not only boosting sales in Portugal’s bars and restaurants, but also embedding a positive lifestyle image of the country in the hearts and minds of its visitors.

However, there is also tension, thanks to the supply-chain crisis, rising costs and the impact on consumers’ disposable incomes. Producers that postponed price hikes during the pandemic are now facing a difficult choice. “We need to raise prices in certain areas,” says Bridge, “and we’ve probably needed to do that for a while. The average age of a Taylor ’s Port is seven years, so it takes a bit of time for increased costs to feed through the system, and we also need to respect the consumer, because they are being squeezed on the other side. After all, we are a discretionary luxury item, so we need to be responsible and stay affordable for our customers.”