Exchanging glances

One of the world’s great fortified wines, port is facing a number of challenges. Christian Davis reports


THE DOURO RIVER, which rises in Spain and slowly, serenely winds its way down through northern Portugal, emptying into the sea at Porto, epitomises and sums up its most famous product.

Port is not particularly accessible. The process of production is complex, expensive and long-winded. The majestic hillsides which make the Douro a World Heritage site are steep, making mechanised harvesting nigh-on impossible.

The Beneficio system under which the IVDP, the Port Wine Institute, controls the production of the grapes thus governing the quantity and quality of wine produced, is another hurdle or kink in the progress towards the finished product. And then there is the fluctuating price of the neutral alcohol used to stop the fermentation process (leaving port’s characteristic residual sugars and thus rich, full flavours).

Fully fortified, the wine then has to be shipped down the valley and put into barrels, or pipes, in the various company lodges in Vila Nova de Gaia opposite the city of Porto.

Along the way, on the tortuous journey to the retailer shelf, the producer must determine the style of port that will end up in the consumer’s glass.

Current challenges can be distilled into three. The most recent harvest was short, which is likely to mean higher prices going forward. Costs and pricing overall – any global business is at the mercy of fluctuating interest and exchange rates. The recent uncertainly in markets caused by the UK’s decision to leave the European Union (Brexit) and the imminent annointing of Donald Trump as the next US president.

Finally, there is the real burning question: who is going to drink port in the future and how are they going to drink it?

It is hardly surprising, therefore, that most of the major global drinks companies pulled out of port, bearing in mind the cost of production, leaving the specialists. Among those, there has been a move to diversify. The Fladgate Partnership has gone into hotels and now owns three in the region, while Symington Family Estates has gone into table wine with a partnership with Bordeaux producer Bruno Prats. Also conscious of the opportunities afforded by tourism, Symington’s visitor centre at its flagship Quinta do Bomfim, has just won a major international tourism award. Then there is the big Portuguese wine producer, Sogrape which, seeing an opportunity on its home turf, snapped up Sandeman. Blessed with good stocks, it is concentrating on its aged tawnies.


Adrian Bridge, chief executive of the Fladgate Partnership, fleshes out the issues for Drinks International: “We have just completed a good harvest, although it was complicated. Many farmers failed to do the treatments needed for disease control on the basis that the Beneficio system only allows them to sell 50% of their crop at a profit. The remainder, which is sold for table wine, is at about a third of the cost of production.

“Thus they took the logical decision that it was cheaper to lose half the crop than do the treatments. Nature is not so simple and many lost 80%-100%. Yet again, we see an example of a system that was set up with good intentions in 1933 but no longer serves a useful purpose but actually damages farmer interest,” he states.

“The good news is that we have produced some great ports this year. However, a tight harvest has pushed up prices that we see as rising by about 3% this year. Spirit prices are expected to rise in 2017.

“The UK market remains a challenge after Brexit, mainly because the value of sterling has fallen 15% and is making selling port unprofitable in the UK. Price increases for 2017 are inevitable given the number of factors that are influencing the industry,” says Bridge.

Paul Symington, of Symington Family Estates, is bullish. He says: “The transformation of port continues. Until the early 1970s it was characterised by large volumes of ruby port and small volumes of supreme quality vintage ports. Since then the premium category has gradually been replacing the large volumes of ruby ports.

“Since 2000, this process has been speeded up, encouraged by the ever-increasing costs of farming the steep and low-yielding Douro vineyards.

“In recent years the growth of Reserve, LBV and especially old tawny ports (10, 20, 30, 40-year-old and Colheita), has been excellent, aided by strong innovation from a few more enlightened port companies. The future is bright for those companies that have embraced and, to a great extent, led these changes,” says Symington.


On the bright side Bridge sees opportunities. “We are seeing the trend of using port in cocktails increasing in many markets. We developed Croft Pink for this market back in 2008 but now the trend encompasses many different styles of port. It is easy to see why, given that port has full, rich flavours and yet low alcohol, for the sort of body it can give a cocktail or punch. It is ‘low alcohol’ when compared to spirits and we are seeing many consumers pushing to have lower-alcohol cocktails on offer.

“Demand for our 50-year-old single harvest ports remain strong. We have had a successful year with 1996 and are now launching the 1967. Demand is strong as consumers are looking for something for a special occasion,” says Bridge.

French company La Martiniquaise is another major player in the Douro with its Porto Cruz brand. The company claims to have increased its sales by 41% between 2011 and 2015 (Source: IWSR Portugal 2016 Report).

Junior international brand manager, whiskies and aperitifs, Johanne Theveney, is very keen. He tells DI: “We are really enthusiastic for the years to come as the whole category has started to evolve, but it is true that the port category has been, and is still, facing some challenges.”

This year in its home market – Cruz’s first – the brand launched Cruz Fresco – claimed to be ‘a new way of consuming port’.

Theveney says: “We encourage people to drink their tawny port chilled, with a lot of ice and a slice of orange, as a refreshing drink. We know this use wouldn’t have been possible in Portugal, for instance, where consumers are more attached to traditions.”

Theveney claims the campaign performed well and has kept the French market growing (4.5% sales YTD – Source: IRI). “We think it’s a priority to show new aspects and new uses of the product like we did with our pink reference a few years ago.

“We do not fear to recommend to use our white and pink products fresh or mixed in cocktails so people can become familiar with the taste of port in a more common and modern way,” says Theveney.

He adds Porto Cruz wants to demonstrate that port can be as complex as wine, with broader uses. “Yet we are not excluding connoisseurs and we keep developing our premium range too, releasing unique and exceptional products such as vintages or Colheitas.”

On the other hand, Sogrape is ploughing a more traditional furrow, investing heavily in its aged tawnies.

In an effort to be ‘disruptive’ to the category, it commissioned major drinks packaging design specialist Stranger & Stranger to come up with a new look for its Sandeman Aged Tawnies range.

So out went the traditional cues for port. Clear glass was introduced instead of black to show off the maturation and colour change from the 10-year-old up to the 30 and 40-year-olds. There are embossed bottles, a roundle and beautiful labels to tell the story and convey the quality.

The one thing that remains is ‘The Don’. You can’t have Sandeman without the famous cloaked figure. It just wouldn’t taste the same.


Sogrape UK marketing manager Rupert Lovie tells Drinks International: “We see the aged tawnies category as having lots of potential. It is a revelation for people to try them if they have only been used to port with cheese at Christmas.”

According to Lovie, aged tawnies are tracking at 29.8% up in the UK on a MAT total from January to August. The sectors getting squeezed are the likes of reserve rubys and LBVs in the middle.

Inevitably, the cocktail boom is of interest to Lovie. He believes the rich, fruity characters make a fine base for cocktails. One of the company’s priorities is to break into the bartending world and make it aware of the quality and possible versatility of port for long drinks.


Bridge says: “The Fladgate Partnership continues to invest in its port business and has recently moved all its offices on to a single site. We have refurbished the Taylor’s visitors’ centre and we have further plans for investment in tourism-related activity.

“In 2016 we have refurbished and relaunched the Vintage House Hotel in Pinhao and bought the Hotel Infante Sagres in Porto. The Infante Sagres will undergo a refit over the next two years, which includes launching in April 2018 an innovative food and beverage offer with Vogue magazine. The intention is that once again the Infante Sagres will be the most glamorous place to eat, drink and be seen in Porto.

“We continue to develop other areas of our business and we remain positive about the future. We are looking forward to celebrating the Taylor’s Port 325th anniversary next year,” says Bridge.

Theveney says: “Producers have increased their efforts and have taken appropriate measures to promote the port category worldwide. We observe a wide phenomenon of premiumisation, with the release of numerous vintages ports or very limited editions, for instance.”

This strategy works well in some specific markets, such as Canada and the US. Consumers are ready to pay more than before for port and acknowledge that a good port is worth a good wine. Port also benefits from the rising reputation of Portuguese and Douro wines across the world.

“Porto Cruz assumes its role of category leader and wants to galvanise and grow the whole category, making port accessible to all consumers and rejuvenate consumption.

“The Porto Cruz brand invested a lot in colourful and attractive campaigns. Our iconic woman in black is a ‘living’ proof of the brand evolution over the years. We look towards more modernity but we stay true to our roots, proud of our Portuguese origins and port expertise. We claim ourselves as an authentic and traditional brand in a contemporary way. We want to help port become more fashionable,” concludes Porto Cruz’s Theveney.