Sue and I are in historic Évora, Portugal where I am speaking at the 10th Alentejo Vine and Wine Symposium. This visit has given me an excuse to learn more about Portugal’s wine export markets and it is eye-opening to see how the economic landscape is changing.

Australia Plays the China Card

International wine trade patterns are changing rapidly and in surprising ways for Portugal and other wine-producing nations. I have many friends who still are not convinced that China is now or ever will be an important factor in global wine trade beyond high end Burgundy and Bordeaux, for example. They just can’t imagine China as a wine power.

They will be surprised at the news from Australia that exports to China now exceed sales to the big U.K. market, putting China #2 after the U.S.for Australian producers  And if you combine exports to China with those to Hong Kong, this market rises to #1 on the Australian wine export league table, surpassing both the US and UK. Imagine that!

This dramatic change, which Kym Anderson predicted a few years ago, is the result of rising Chinese interest in wines in the middle market — not just cheap bulk imports and not just high end trophy wines. Australia is benefiting from this movement and earning a return on their determined investment in the Chinese market in terms of branding and reputation.

Here in Portugal, the currents are shifting, too, and China is part of the story. Consider the latest international trade data provided by “Wine by Numbers,” a project of Il Corriere Vinicola and the Unione Italiana Vini, an association of Italian wine producers.

Portugal Plays the Angola Card

The first table shows total Portuguese bottled wine exports (including both table wine and Port) for 2015 and it is fascinating to see the huge shifts that are taking place. Note strong gains in both volume and revenue in the U.S., Canada, Poland, China and Sweden. Portuguese wines have definitely gained traction in some key markets as quality has continued to improve and distribution and marketing become more effective.

Some of these gains are offset by declining exports to Angola, however. A former Portuguese colony, Angola has benefited from a petroleum-fueled economic boom in recently years and become a good  market for Portuguese wine producers. These data indicate that the oil bust has severely affected the wine market. It is a good thing that the rising exports to other countries offset the falling sales here.

You may be surprised to see Angola on this list, but Africa is a diverse continent in terms of its economic profile and has experienced rapid economic growth creating a number of significant wine markets. A recent Economist newspaper survey forecasts continued robust growth in Africa’s key middle class consumer market, even taking the oil impacts in Nigeria and Angola into account.

[Not] Any Port in a Storm

The second table breaks out Port exports and adds an important dimension to our understanding of Portugal’s export environment. Although the bottom line shows that Port exports are relatively stagnant overall, there are tremendous market shifts, particular falling exports to Brazil and Germany and rising sales to Ireland, Denmark, Poland, Sweden and the UK. The U.S. is a rising market for Port, but only #5 on the list.

Now please compare the two tables, mentally subtracting Port exports from total bottled wine exports to get a sense of where Portuguese table wines are being sold. A number of interesting patterns are revealed. The first is the critical importance of Angola, despite its recent economic problems, and also Brazil. According to these data, Angola imports more bottled Portuguese table wine than the U.S., U.K. or France.

The U.S. is a somewhat distant #2 on the bottled table wine list, but of great importance because the market is growing and prices are on the rise. Taken together, the U.S. and Canada are as large a market for Portuguese table wines as Angola and, unlike Angola, a  source of growth both in terms of revenue and rising unit price.

Follow the Money (and Growth)

Finally, I thought you would be interested in these bulk wine export data. U.S. bulk wine imports from Portugal grew dramatically in 2015, but from a very low base (similar to the stories in Norway and the U.K.). Other bulk wine export markets (especially Angola) experienced significant declines, however, so that the bottom line is negative.

I’m speaking to the Alentejo region wine producers and data for Alentejo (click here to download a pdf) indicate the importance of the U.S. market to this region, too. Angola and Brazil were Alentejo’s leading non-EU export markets in 2014 followed by the U.S., Canada and China.

Follow the money, that’s what Deep Throat said, and follow the growth is good advice, too. For Portuguese table wine producers, the biggest markets are Angola and Brazil but the biggest growth opportunities may lie in China, Canada and the United States.

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China, Oz, Portugal, Angola, USA and Brazil? Is it just my imagination?