My recent trip to Portugal was eye-opening and will be the subject of Wine Economist columns for the next few weeks. I was invited to speak at a wine industry gathering held in association with a Portuguese wine festival called Essência Do Vinho at the historic Palacio dal Bolsa in Porto.  I will paste the program at the end of this post.

The conference was organized by ACIBEV (Associação dos Comerciantes e Industriais de Bebidas Espirituosas e Vinhos or Portugal’s Association of Traders and Producers of Spirits and Wine) which is an organization intended to help Portuguese producers work together on a wide range of issues of common interest.

Can Portugal Wine the Wine Wars?

The program was called “Pode Portugal Ganhar a Guerra do Vinho?”  or “Can Portugal Win the Wine Wars.”  My job was both easy and hard, Easy because I’ve spoken many times about Wine Wars, my 2011 book on the economic forces shaping the global wine industry.  But also difficult because I didn’t know very much about the Portuguese wine business when I agreed to give the talk and so I had to kick into student exam-cram mode.

I worked very hard to learn all I could before getting on the plane, but I knew that most of my education would be on-the-spot, talking with the people there.  I also needed to consider the rest of the program, particularly the speaker who would go before me,  Susana García Dolla, Vice Secretary General of Spanish Wine Federation (FEV) and a representative of the pan-European group Wine in Moderation. (Susana gave a fantastic talk!)

So I framed my remarks carefully and tried to leverage my fresh perspective on the wines of Portugal into something of value to the audience. There were a lot of messages, as Paul Symington noted in his commentary following my remarks, and I don’t think I pushed some them far enough in some cases (as he pointedly did because of his mastery of the issues in Portugal).  I thought you might be interested in one piece of the lecture that several people said they especially appreciated.

Wine Wars: Know Which War? Which Opponent?

The wine wars that I talk about in Wine Wars are the three economic forces that I see as shaping global wine: the push forces of globalization (the Curse of the Blue Nun) and the growing power of brands (the Miracle of Two Buck Chuck) and the push-back forces that seek to preserve and protect wine’s special place in life (the Revenge of the Terroirists).

Portugal is part of that war, I told my audience. The Portuguese practically invented globalization and are famous for global wine brands (Port is a powerhouse brand, for example, and Portuguese mass market branded wines such as Lancers and Mateus are famous). I could tell the whole Wine Wars story as a Portuguese story with very little effort. But that’s not the only wine war.

I quickly sketched several other wine wars that are important to understand. If you talk about a wine war to wine producers, they naturally think of the war in terms of the battle for sales and shelf space — the war that pits one winery against another. This seems like the critical battlefield, I think, because it is the most immediate one. But you can win in that arena and still lose the bigger contest if you ignore the other wars.

The Drinks War

Wine is also fighting what you might call the beverage war or the drinks war. In part because of globalization and the rise of branded wines and in part because of other factors (changing demographics prime among them), wine is increasingly seen as part of the “drinks” category of consumer goods that includes beer, cider and spirits.  You can see this as part of the democratization of wine (which is good) or a symptom that wine is losing its special place in the marketplace (not so good).

The fact of the drinks war changes things because now the real opponents are not other wine producers, they are the makers of other alcoholic and even some non-alcoholic beverages.  Your old enemy is now your best potential ally and the strategies that might have worked in wine vs wine battles are of little use. Wine vs beer, wine vs cider, wine vs spirits — those are the fights that matter now.

The new emphasis on innovation in wine (the topic of next week’s column) is driven in part by the drinks war and the need to confront innovative new challengers with new strategies.

The War Against Wine

The war against wine is part of the rising anti-alcohol movement in Europe and elsewhere around the world. We think of wine as the drink of moderation, but alcohol is alcohol to these activists, and so they seek to tax it, regulate it, restrict it, and generally discourage its sale, marketing and consumption.

We are familiar with the war against wine in the US because we lost it so tragically in the last century. The great experiment of Prohibition pretty much destroyed the US wine industry, which has still not fully recovered.

The war against wine is perhaps the most serious battle of them all, which is why Susana’s presentation was so important. She outlined the strategies and tactics that Wine in Moderation is employing in its efforts to present the positive case for wine and to counter anti-alcohol propaganda.

Can Portugal win the wine wars? Portuguese wines are attracting a lot of positive attention these days and I think it is about time that they were recognized. But it is a tough marketplace, with competition from every corner of the wine world. Portuguese producers need to work together (which is why ACIBEV’s efforts and the Wines in Moderation project are so important) in order to complete as individual wineries more effectively.

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Special thanks to George Sandeman, Eduardo Medeiros and Ana Isabel Alves of ACIBEV for their kindness and hospitality and to my discussants Paul Symington and Francisco Sousa Ferreira for their pertinent analysis.

Here is the program for the Porto event.

Can Portugal Win the Wine Wars?

10.00: Opening by Eduardo Medeiros, Administrator and Director of Bacalhôa ACIBEV Group

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10h10: Presentation of Manuel Novaes Cabral, President of the Port Wine Institute

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10.20: “Spain – A Promotion of Moderate Consumption” – Susana García Dolla, Vice Secretary General of Spanish Wine Federation (FEV)

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11h30: “Shifting Center, Rising Tide: Portugal in the Changing Global Wine Market” SPEAKER: Mike Veseth – Editor of The Wine Economist and Professor Emeritus, University of Puget Sound

Commentators: Paul Symington – Symington Family Estates Francisco Sousa Ferreira – Wine Ventures MODERATOR: Eduardo Medeiros – Bacalhôa Group, Director of ACIBEV

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12:45: Speech by George Sandeman, Director of Sogrape and President of ACIBEV