PORTUGAL: Pure Port-ential

It has already proved itself to the trade, but Portuguese wine has yet to find favour among the public at large. With strong brands and a new marketing strategy, has this category’s time finally come? By Gabriel Savage.

Of the many uphill struggles faced by the trade, Portuguese wine must be one of the tougher callings. For decades now, the country has struggled to convert its positive image within the UK trade into consistent, healthy sales at the consumer end. In the past couple of years, however, a more focused generic marketing strategy combined with the emergence of some carefully thought-out brands and unwavering support from a converted core seems to be bearing some much deserved fruit.  

According to Nielsen figures for April 2009, Portugal has gained a 7% MAT volume increase in the UK off-trade, although its market share in this sector remains just under 1%. The country’s largest growth area came within the multiple retailers, where Portugal now sells just under 800,000 cases a year. This may be small beer compared with many other countries, and even individual brands, but then the market hardly needs another Australia.

So, at the risk of posing a perennial question, does Portugal finally stand a realistic chance of making a serious impact on the UK market this year? “I think so, and I think as a matter of fact we’re doing that already, especially in the on-trade with our Douro wines,” maintains José Leitao, sales director at D&F Wine Shippers, which deals exclusively with Portuguese wine. With marked improvements in both the product and its marketing, Leitao now believes: “Quality and price are both there.

We’ve been listening to people saying that Portugal’s the next big thing, but now is the time if there is one.” Nick Oakley, managing director of Oakley Wine Agencies, has invested many dispiriting years in trying to realise Portugal’s UK potential. Now, however, he is similarly upbeat about the country’s current position. “I think there is quite some momentum at the moment, and noticeably more players in the marketplace.”

Route to marketing

For Max Birch, winery manager and winemaker at Sir Cliff Richard’s estate, Adega do Cantor, the country’s success hangs on its ability to conquer fully its marketing demons. “I think Portugal is producing wines that have the potential to make a real impact on the UK market. Whether we as wine producers are willing or able to communicate this to the UK wine consumer is perhaps the major issue that we have to address in order to achieve this potential.”

Reassuringly, there is now a widespread consensus from various corners of the trade that ViniPortugal, coordinated in the UK by Judy Kendrick, managing director of JK Marketing, is now firmly on the right track. Outlining plans for this year, Kendrick explains: “We’re continuing our programme with the trade, which we’ve been building over the last few years, but this year there will be more consumer activity than ever before.” With 100 consumer tastings scheduled this year, in addition to ViniPortugal’s numerous trade-focused initiatives, Kendrick is certainly giving Portugal a formidable chance to inspire the UK with its wines.

As Portugal’s regions and varieties continue their battle for recognition among consumers, there are some in particular which seem to be making very respectable headway. Alan West, managing director of Oakhouse Wine Company, comments: “We’ve already been successful in Alentejo and I’m looking at the Douro next.” Leitao also highlights these two regions, observing: “The quality all across Portugal is extraordinary. The Douro has an advantage as the area where Port comes from, but Alentejo is also close behind.”

Indeed, for a while now many of the Port houses have been diversifying into the table wine business as a natural complement to their fortified offer. The Sogevinus Group, which produced 12.5 million bottles of Port and table wine altogether last year, is firmly focused on expanding this latter side of its business. Cátia Moura, the company’s communications manager, explains: “We are initiating a new business area oriented towards Douro DOC wines.
Currently, they represent 10% of our invoicing, but our short-term expectation is to double this value.”

The notable exception to this trend among the Port houses comes from The Fladgate Partnership. However, Adrian Bridge, the group’s managing director, justifies this resistance. “We’re often asked if we make table wine, but the reason we don’t is because I believe in focus. Typically every agent anywhere in the world already has red wine and they’re not looking to us for that.” By contrast, Paul Symington, joint managing director of Symington Family Estates, highlights the Douro’s obvious appeal for wine lovers and the commercial opportunities this presents. “If a region has produced world-class Ports for 300 years and proved what an exceptional terroir the Douro is, why can it not also produce world-class wines?” In a firm gesture of Symington’s commitment to its wine business, the company has just announced the outright purchase of highly-regarded Douro vineyard Quinta de Roriz, whose ownership it has shared with Joao Van Zeller since 1998. Symington confirms: “Quinta de Roriz will be used partly for its own wines, already on the market, and partly to support Chryseia, our joint venture with Bruno Prats.” In addition, Symington is currently developing its lower-priced Altano range, with some estate wines due to be introduced next year.

Brand call

Elsewhere, there are further signs of a growing vibrancy within the Portuguese wine sector. Following the success of Tagus Creek in the UK market, Oakley is now seeking to launch a second brand by the name of Foz. This tri-varietal wine is designed to bolster Portugal’s offer at the £4.99 mark, the same supermarket-friendly pricepoint being targeted by Latitude, a joint brand project developed between West and international wine consultant David Morrison. “Portugal badly needs some major brands and consistent marketing,” explains West, outlining his belief that, for the moment at least, “Anything which can improve the image of Portugal is a good thing. If that means going down the route of popular grape varieties which are pronounceable, then so be it.”

Despite the pricing focus for these two brands, there remains a widespread feeling that the key to Portugal’s future success does not lie at the bottom end of the market. “We cannot compete on price,” comments Symington, backed up by West, who notes, “I can find consistently cheaper wines in Spain.” Both agree, however, that this is a country with a truly unique offer, not just from its terroir, but also from its indigenous grape varieties. Kendrick sums up Portugal’s potential to appeal strongly to all corners of the UK trade. “Something like a Cabernet-Touriga blend is a really good approach for supermarkets, where people are just taking a bottle off the shelf. For the independents, where it’s much more of a hand-sell job, it’s great to have these different varieties to talk about.”

Keeping people talking about Portugal is certainly key if the country is at last to fulfil its potential in the UK. Despite the additional challenges posed by a difficult economy, it is clear that all concerned have continued to increase the pressure on the accelerator. There are no guarantees in this industry, especially in the current climate, but Portugal’s wine offer has never looked more enticing, broad and ready for success. As Oakley says, “It’s about time.”

Gabriel Savage, July 2009