Three Faces of Wine Strategy: Porto Perspectives

If you walk along the river in Vila Nova de Gaia, just across the Douro from beautiful Porto, you are in the right place to visit the famous Port lodges and sample different types and styles of Port wine. If you dig a little deeper, you can also learn something about the diversity of successful wine industry strategies that these historic firms have deployed.

I’m interested in Portuguese wine because it has experienced rising sales here in the US market while some other countries have struggled and lost market share. And I am interested in wine industry strategies because, as I wrote here last week, the global wine market seems to have plateaued and so everyone wants to know the secret to growth in a stagnant market.

Herewith, for your consideration, three case studies inspired by an imaginary Vila Nova de Gaia excursion.

Taylor’s: Tradition and Innovation

Our first stop is Taylor’s, one of the most famous names in Port wine. Fortified wines, including Port wines, are not the easiest products to sell these days, but Taylor Fladgate, which has been in this business since 1692, is committed to Port and Porto. The Fladgate Partnership’s portfolio of Port brads is broad and deep, including Taylor’s, Fonseca, Croft, and Krohn.  No unfortified wines are produced. This focus on its traditional business, however, doesn’t rule out innovation and entrepreneurial endeavors.

Late Bottled Vintage (LBV) Port was a Taylor innovation, for example. I have argued that LBV Port helped rescue and revive the Port trade in the 1970s by giving consumers the experience of Vintage Port without the expense and bother. Taylor’s innovation continues today with its canned White Port spritz, Chip Dry & Tonic, a delicious and refreshing addition to the RTD market that may help consumers see Port wine in a new light.

Taylor’s commitment to Port and Porto is also expressed through its investment in the region’s wine tourism industry. First came the fantastic Yeatman Hotel high on the hill overlooking the Douro next door to the Taylor’s Port lodge. The hospitality investment continued with the redevelopment of luxury Hotel Infante Sagres in central Porto and the Vintage House Hotel in the Douro Valley at Pinhão.

That’s really himpressive … but wait, there is more! The the area of warehouses reaching down to the Douro from Taylor’s were developed into Porto’s new wine tourism destination — the incredibly ambitious World of Wine. Sue and I haven’t visited WoW yet, but we look forward to exploring its many varied experiences when we get back on the road again.

Bravo to Adrian Bridge and The Fladgate Partnership for their bold strategy of doubling down on Porto and Port wine.

Symington: Porto and the Douro

If you continue down the pathway along the Douro and up the hillside a few blocks you will come to Graham’s, part of the Symington Family Estates, with its historic Port lodge and destination restaurant, Vinum.

Symington represents a second face of wine industry strategy here in Porto. They are all-in on Port wine, of course, with four famous brands: Graham’s,  Dow’s, Warre’s, and Cockburn’s. But Symington’s reach extends beyond Port to Portuguese table wines including Quinta do Vesuvio, Quinta do Ataíde, Quinta da Fonte Souto, Altano, and Prats + Symington, a partnership with Bordeaux’s Bruno Prats. All the wines but one come from the Douro Valley. Quinta da Fonte Souto is in Alto Alentejo, which is Symington’s first foray outside of its home region.

Sue and I recently enjoyed a bottle of P+S Prazo de Roriz, a red wine made from younger Douro Valley vines that harmoniously balances fruit and minerality — a seriously attractive wine that punches above its  $20 price point.

Although the Fladgate Partnership and Symington Family Estates have taken different pathways in wine industry strategy, they share a strong commitment to sustainability. Adrian Bridge is a driving force for climate change action in the wine industry and beyond, for example, and Symington is one of the wine world’s most recognized Certified B Corporations.

Sogrape: Portugal Goes Global

As you walked from Taylor’s to Graham’s along the Douro you passed two noteworthy Port lodges that are part of the Sogrape family, Sandeman’s and Porto Ferreira (Offley Port is also a Sogrape brand). Sogrape, Portugal’s largest wine producer, is an important force in Port wines and in wine generally. It is the producer, for example, of Mateus Rosé, which was once the best-selling imported wine in the US market and remains incredibly popular around the world.

Sogrape’s strategy extends across Portugal’s wine regions from the Douro north to Vinho Verde and south to the Dao and Alentejo. Sue and I are fans of the Casa Ferreirinha Douro Valley wines, including especially the Quinta da Leda, which we love to pair with duck rice.

Sogrape’s strategy differs from both the Fladgate Partnership and Symington family models in that, while its base in Porto and Port is strong, its vision extends far beyond the Douro. It is, in fact, a global vision, as Sogrape’s extensive portfolio extends to Spain (including the famous LAN wines among others), Argentina (Finca Flichman), Chile (Chateau Los Boldos) and New Zealand (Framingham).

It may be surprising that a wine company from a relatively small country should have such a global reach, but remember that this is Portugal and globalization is in its DNA. The Portuguese practically invented globalization and their Port wines are a global icons. Sogrape, with its Mateus Rosé history, seems well prepared to ride the global wave.

Three Faces of Wine Strategy

So what are the take-aways from this wine strategy tour of Vila Nova de Gaia? The first is that there is a lot going on in Portuguese wine these days. If you haven’t thought seriously about Portugal and its wine recently, it is time to give it some attention.

The second point is that there are many routes to success in today’s market, something that is true in Portugal and elsewhere, too. A key seems to be to identify a comparative advantage and make the long-term investments needed to realize potential gains. Taylor’s has invested in expanding Port wine’s reach while investing in Porto and the Douro as a destination –leveraging the power of place. Port and Porto are inseparable — expanding the appeal of one necessarily raises the profile of the other.

The Symington family have adopted a strategy that focuses on the vineyards and communities — the social and physical terroir, with wines that reflect the region and investments that promote social welfare.

Finally, Sogrape leverages the local-global nexus, thinking global and acting local in a very Portuguese tradition.

What do these firms have in common besides Port and Porto? Well, they are all three family businesses that think in generational terms.  That long-term perspective makes it possible for the sort of strategies we see here to succeed.

4 responses

  1. Nice to see a piece on Port /Porto – it is certainly one of the great wine places to visit, where Wine Culture is very distinctly expressed . I like your comment on ” social terroir ” – what is wine without it ?

  2. Great article Mike.
    When WOW opened, I wondered how the concept would work. It certainly lives up to the name. I hate to use the comparison, but it is like wine Disneyland. And I mean that in a good way. The exhibits are excellent, and there are so many of them that it takes several days to do it justice. Living in Porto, we went when it first opened and continue going back for more. The restaurants are outstanding (if a little pricey by Portuguese standards) and the view is spectacular.
    They also have free music quite often, jazz, pop, and classical. And the chocolate store at the end of the chocolate story experience is a must. It is pure fun, instructional and entertaining. And not just for winos! 😉

  3. Mike – I literally just got back from a visit to Porto, the Douro Valley (6 Quinta’s) and the Right Bank and found this issue in my in-box. This was our 2nd visit to Porto and Gaia region (2018 being the other time). Our first visit to Douro. We distinctively wanted to explore more non-port vs. port this trip, but we ended up learning more and diving deeper into Port as everything was in harvest. We just leaned into the moment.

    We did visit the WoW museum and to Lisa’s comment, we weren’t sure what we were going to experience. But, I have to say, we chose The Wine Experience and it was very well done. We literally spent nearly two hours going through and absorbing the content. I learned several new things along the way, so that is always a great payoff. And, the exhibits and use of mixed media was stellar and very creative. We had a similar experience at The Cité du Vin in Bordeaux several years back. I would say the WoW was comparable.

    Ironic to your write up, we visited Taylor right after WOW for a library tasting that went back as far as 1985. The expanded lesson on ports ensued. That merely warmed us up for the Douro experience where we visited with six different Quinta’s and fell in love with the Colheita’s and Savedra’s. It was the white port that really caught our attention and how to drink them chilled with appetizers. I would have never gone there before this visit.

    It is your generational perspective that strikes a chord. It is the great pride and longer temporal framework that shined through on these visits. Time is honored. Granite mosh pits were alive with foursomes stomping grapes for four hours in ceremonial pursuit of the harvest process. An art that we have lost in the US, less tourist and influencer photo ops. All of our senses were alive during our tours and tastings. Everything starts in the vineyard. Every wine/port making component was shared in great detail. Tastings were the icing on the cake, not the cake.

    I believe Portugal and Port wines are coming on strong because they are making great product and they have a story. A narrative that makes them intriguing and different on a world stage. Heritage serves a big role. The visual stimuli is everywhere and it makes everything taste better.

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