Wine Tourism in Portugal: Expect the Unexpected

“A World of Difference” is the official motto of Wines of Portugal and it is a good one, too, since Portugal features so many indigenous grapes and distinctive wine styles. Sometimes it feels like a world of its own waiting to be explored.

But I think an even better motto would be “Expect the Unexpected.” Or at least that is the theme that I will use in this column to tie together four recent encounters with Portuguese wine.

Sala Ogival: Wines of Portugal Tasting Room

P1110120It was a beautiful day when Sue and I arrived in Lisbon so we decided to shake off the jet lag by taking a stroll to the Praça do Commércio, the beautiful main square down by the river. We weren’t surprised to see the tourists and families or the many restaurants and cafes with outdoor tables.

But we were surprised to see a “Vini Portugal” (Wines of Portugal) sign on one side of the square. There, inside the Sala Ogival, we found a very impressive tasting room facility that invited visitors to learn about all of Portugal’s wine regions and taste some of the wines.

Various moderated theme tastings were available for modest fees, but a popular option was to put a few euro on a pre-paid card and get small tastes from the wine dispenser machines that were strategically located around the room near information displays for the appropriate regions.

The long central tables were crowded with couples and groups exchanging tastes and conversation. What a great way to draw Lisbon tourists into Portuguese wines and to educate them about regional geography. I understand there is a similar tasting room in Porto. Great way for a national wine organization to leverage a prime tourist location to promote its wine industry.

Castelo de Sâo Jorge: Wine with a View

P1110154You can see the Castelo de Sâo Jorge from pretty much everywhere in Lisbon and, high on the hill, you can see all of Lisbon from the castle. Beautiful weather, beautiful view. All that you need to make it complete is a glass of great wine to sip and enjoy.

So how convenient was it for us to discover the small mobile wine-tasting cart of Wine with a View!

Wine with a View provides visitors with a choice of about a dozen Portuguese wines served in the first give-away plastic glasses I have seen that are not a joke. Red, white, sparkling, Port, and even the local liqueur Ginjinha — buy a glass from the friendly and informative staff and relax and enjoy the view. How civilized!P1110157

The wines are supplied by Bacalhôa, which has vineyards and wineries throughout Portugal and is able to represent the country well. I chose the Quinta do Bacalhôa white, made from grapes at the estate vineyard in Setúbal (we visited the palace there the day before). It was great, but I found it hard to resist the Moscatel du Setúbal, which is one of my favorite Portuguese wines.

Wine with a View hopes to expand to other locations. Wouldn’t it be great if every place with a view had wine available to encourage you to relax and enjoy the moment?

Mateus Palace: Hidden Winery
We took only two “tourist days” on our Portuguese trip: one to visit the castle in Lisbon and explore the city and another in the Douro to visit the historic Casa Mateus and have lunch at DOC, chef Rui Paula’s wonderful riverside restaurant. I knew there would be interesting wine at DOC, but I didn’t expect to find a wine experience at the palace.

The name Mateus is famous in wine, of course, because of Mateus Rosé, which is made by Sogrape and sold around the world. At one time Mateus Rosé was the best-selling imported wine in the United States and it is making a comeback in many markets as both Portuguese wines and Rosé wines have gained traction.

14e50291eafa8c6b4dcefa287a532f61I did not expect to find either wine or grapes at the Mateus Palace. The palace is beautiful and full of history and the grounds and gardens are spectacular — no wonder it is such a popular tourist destination. Out past the formal garden, however, was an orchard and then a large and well-tended vineyard. I guess there are grapes at Mateus. But wine?

I literally stumbled upon the winery and tasting room while trying to find my way back to the car. There, in a long side building, was a tasting room for Lavradores de Feitoria, an association of growers and producers from throughout the region. The Mateus vineyards and the wines made from them are part of this association.

The wines we tasted were very interesting and the Lavradores de Feitoria Rosé was refreshing, as it should be on the warm day. The LBV Porto from Quinta da Costa das Aguaneiras was impressive.

We were invited to enter an ancient door just down the way and we found ourselves in a winery filled with vintage equipment. With the historic palace just ten yards away, this atmospheric room felt like a museum and gave us a tangible sense of the history of wine in this place. A totally unexpected treat.

Seattle: Unexpected Delights

As luck would have it, a Wines of Portugal trade roadshow rolled into Seattle about a month after we returned from my speaking trip to Portugal. We were delighted to be invited to attend and even happier with the Master Class that Evan Goldstein and Eugènio Jardim presented.

At the trade tasting that followed we revisited wines that we had just come to know in Portugal and tried to deepen our knowledge. The white wines really impressed us and the tasting let us experience different representations of grapes and styles that had only recently entered our vocabulary.

You always smile when you come across something unexpected in a situation like this, and it happened when Eugénio poured us a glass of a sparkling red wine — a sparkling Baga from the Bairrada region, where it is the traditional wine to have with roast suckling pig. The wine was a delight and I could imagine how well it would cut through and enhance the juicy pig. Love at first taste.

Portugal and Portuguese wines are both full of surprises. Expect the unexpected, that’s what I say.

The Three Ages of Wine Cork Production: A Visit to Corticeira Amorim

corf_forests

It is impossible to drive through the Alentejo region of Portugal without seeing the dark trees that dot the landscape. Pretty soon you notice the lines on the trunks where the bark has been harvested and then you know for sure that you are in a cork oak (Quercus suber) forest, the densest concentration of these trees in the world (see map above).

Cork’s Medieval Roots

Planting a cork oak tree is a statement of faith in the future. The first harvest must wait for 15 years and then the cork will be of low quality, unsuitable for natural cork closures. The second and better harvest that yields more usable cork comes 9 years later. Only 9  years after that (and every 9 years into the future) can the highest quality cork be taken. Few other things in the world of wine (producing 40-year old Tawny Port, for example) can compare to cork in terms of optimistic forward thinking.

Sue and I visited both Porto and Alentejo during our recent trip to Portugal and Antonio Amorim and Carlos de Jesus of Corticeira Amorim, the world leader in cork closures, invited us to visit their factories in these two regions to see first-hand what I am calling the Three Ages of cork.

Cork is an ancient product — the Greeks, Egyptians and Romans all sealed their wine jars with cork. The harvesting of it is laborious hand work since each tree has its own configuration. Photos of modern cork harvests could easily be mistaken for medieval paintings.Cork1

Industrial Revolution

Stepping into the Amorim factory in Coruche, you get an initial sense of moving forward in time to the industrial revolution. There is still a lot of hand work here. Sorting the processed cork bark pieces, for example, still requires human judgement as they are inspected and graded for quality one at a time. The key to making a profit in cork is to waste nothing, so each cork piece must go to its best use and the waste at each step recycled into a lower-priced product.

Almost nothing is thrown away. One item that was headed for the power-supplying waste burner was a piece of cork that was badly infected with TCA, the source of cork taint. What a horrible smell!  Until a machine can consistently detect all the potential problems with cork including TCA, cracking, insect damage and so on, these workers’ jobs are very secure.

The factory was loud with the clamber of industrial machinery as every task that could be mechanized was mechanized. It gave me a sense of what those 19th century British textile mills must have been like.

Interestingly, the finest corks closures made from the best quality raw material are hand-punched by skilled craftsmen (see photo above). These corks need to be as close to perfect as possible and so far nothing can replace the human eye for seeing just where the cork’s sweet spot is (and what parts should be recycled down the line for other products).

NDtech: Cork for the 21st Century

It would be easy to think of cork just this way — a medieval product made using industrial revolution technology — but this viewpoint misses a lot as we learned when we visited Amorim’s second factory near Porto.

Here we saw many of the same processes as in the south, but the focus was different because Carlos and Antonio wanted us to see the progress that has been made at improving cork closures and addressing the issues that allowed synthetic stoppers and screw cap technology to make dramatic inroads in this market.

Innovative new production processes and seriously obsessive attention to detail have now all but eliminated the incidence of detectable TCA contamination in Amorim corks throughout the product line, which is a big deal and came only after intense and expensive research and process innovation. But that was not good enough and so earlier this year Amorim unveiled its latest innovation, NDtech corks.

Amorim scientists guided us into the controlled environment that you see in the video above and we saw the NDtech (think non-detectible TCA levels) process at work. ndTech really does individually-inspect each and every cork that goes through the process and guarantees then all to be TCA-free at human sensory threshold levels.

Amorim is convinced that the process works and we saw persuasive data about these and other Amorim cork closures. Now the challenge is to scale up to meet the demand for these, the very best corks that can be made.

Three Ages in One Product

I find  it interesting that cork is so many things at once. It is a natural product, of course, but one that is necessarily harvested and then processed by hand and manufactured using machines and processes from a variety of periods. It is also increasingly a technological product.

Making excellent cork closures is complicated as we saw at the Amorim factories and doing so profitably is even more complicated. We were impressed with the way that every scrap and bit of cork is put to use in closures and other cork products and every ounce of value realized. Environmental and economic sustainability go hand-in-hand.

Meeting the challenge of synthetic and screw-cap closures has not been easy for cork producers, who saw a some of their market share disappear. Hard work, expensive research and technical innovation has turned this around, however, and now many consumers and wineries who moved away from cork in the past are taking a new look.

Someone once accused the economist John Maynard Keynes of expressing a view that was inconsistent with his previous statements.” When the facts change,” Keynes replied, “I change my opinion. What do you do?” The facts about cork — especially the TCA situation — have changed in the past few years. No wonder many people in the industry have revised their views on cork.

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Many thanks to Antonio Amorim and Carlos de Jesus for he opportunity to see the three ages of cork with our own eyes and learn about the scientific progress from the experts. This concludes the short series of past-present-future stories from the Alentejo. Come back next week for a look at some unexpected wine tourism opportunities we found in Portugal.

The Past Meets the Future at Alentejo’s Historic José de Sousa Winery

P1110385The dynamic intersection of old and new was a theme of our recent visit to Portugal’s Alentejo wine region and there cannot be a better example of it that the work that winemaker Domingos Soares Franco is doing at at José Maria da Fonseca‘s José de Sousa winery. Here is a brief report.

Past & Present

Domingos Soares Franco’s roots in Portuguese wine run very deep. He is the sixth generation of his family to make wine. He is a quiet man, I would say, having met him just once, but also proud of all that he and his family have accomplished at José Maria da Fonseca. And rightly so (see video below).

Domingos is known for the innovations that he has introduced in winemaking here, which reflects the new. His technical training was in California at UC Davis (he was the first Portuguese Davis graduate), so it is no surprise that he brings the modern and experimental to his work here.

But we did not meet him in a high tech facility as you might imagine. Instead he took us into a deep cellar at the José de Sousa winery where we confronted Alentejo’s past and perhaps also its future.

Going Back in TimeP1110389

The Romans made wine in this region two millenia ago using huge clay jars not unlike the ones shown in the photo above and video below. Incredibly the ancient practice remained alive here over the centuries before fading away in the 20th century as the local wine industry suffered from adverse economic incentives (the Portuguese government promoted grain production over wine).

The reemergence of wine in this region is an important story and as we saw at Adega de Borba, modern technology and innovation have been key to that success. But many of those old 1000 liter clay jars still survive from a century ago and we saw them at several wineries that are experimenting with them to see if the past can provide insights for the future. I am not sure anyone has gone as far as Domingos, however.

We inspected the basement with the largest collection of jars that I saw on this trip and peered into a jar full with wine that Domingos was making based upon an ancient recipe. A layer of olive oil protected the wine from oxygen. It was like a look back into the past!

A Memorable BlendP1110401

Then we tasted and that was very interesting, too. Experimenting with both the past and the future, Domingos makes one wine using modern techniques and then another, using identical grapes, in the clay jars. You could sense the family resemblance, but there was a lot that is different, especially aroma and mouthfeel.

We tasted one and then the other and then improvised the blend that Domingos favors: half past, half future. Memorable. Not just a wine but an experience.

If you look closely at the photo you can see the shimmer of olive oil floating on the surface of the clay jar wine. That will be gone when the finished wine is made, Domingos said, but the sense of history will certainly remain.

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This video gives you a sense of the old and new that we experienced in Portugal.

Flashback Friday: Cracking the Chinese Wine Market

The news from my friends in Portugal is that exports to China are rising, which reminds me of the first time I wrote about Portuguese wine in China back in 2010. Here is a Flashback Friday reprise of that column.

Portuguese Wines in Beijing

President Obama wants to double U.S. exports within five years. With this in mind he recently sent Commerce Secretary Gary Locke to Hong Kong to sign a Memorandum of Understanding (MOU) on Cooperation in Wine-Related Businesses. The press release says that

The United States is one of the leading wine-producing countries in the world, and American wines have been growing in stature internationally for decades as people around the world have learned what American wine producers and consumers have known for years: American wines are outstanding,” Locke said. “Working with the Hong Kong government, we want to create opportunities to heighten exposure to American wines in Hong Kong and the region. This MOU will help do just that.

“Hong Kong and the region” … I think that would be code for China. Everyone wants to crack the Chinese market, something that is easier said than done. I’ve written about this problem before (see “Wine and the China Syndrome”). Sean, one of our recent graduates, wrote his senior thesis on the challenges and opportunities of exporting Washington wine to China. Sean identified a number of significant political, economic and cultural barriers that American wine exporters must overcome. He was optimistic regarding the long term, but very cautious about short term success. (Secretary Locke, you might want to give Sean a call.)

Cracking the Chinese Market

Everyone looks hungrily at China with its growing economy and expanding consumer base. But it is hard to break in. Bulk wine imports are substantial (imported wines get blended with local products and labeled “Chinese wine”), but at unsustainably low prices. No future there.

France and Spain have had better luck. The French have been able to leverage their reputation and the prestige of their finest producers to carve out a attractive niche markets for Bordeaux and Champagne as luxury products.

The Spanish achieved success through old fashioned hard work. They have partnered with Chinese wine producers in both production and distribution. If Chinese wines are improving in quality (and I understand they are) then this is at least in part due to technical improvements facilitated by joint ventures.

Miguel Torres has been particularly active in partnerships and ventures of all sorts. You might be interested in their everwines project, which was recently launched in an attempt to develop a western style Chinese wine culture. If you check out the site be sure to click on the Online Shopping link to purchase a variety of international wines in the $20 range and also Opus One for about $550 and a first growth Bordeaux for more than $1200.

Any Port in a Storm

The U.S. is obviously not the only wine producing country with China on its mind and  I was pleased to receive an invitation from ViniPortugal to participate in their recent China seminar program and tasting of Portuguese wines. Sixteen winemakers flew from Lisbon to Beijing to present and promote their wines. A good chance to observe this Old World wine country’s China strategy in action.

Beijing is a long way to go for an afternoon tasting, so I was represented by my crack China wine research team, Matt Ferchen (Assistant Professor of International Relations at Tsinghua University) and Steve Burckhalter (who works as a translator for the Chinese public relations firm BlueFocus). Matt and Steve are former students of mine at the University of Puget Sound and keen observers of rapidly changing Chinese markets.

Matt said that he was impressed with the wines he tasted.

The first wines I tasted, and the ones I ended up liking the best, were from a cooperative called Adega Coop. De Borba.  A couple of the wineries were family owned and there was a kind of earthiness to the wines that I really enjoyed.  I was especially impressed with the Portuguese whites, which were all very crisp and I think would go very well with spicy Chinese food.

I find that most of the wines available in Beijing, both foreign and Chinese, are expensive and mediocre or cheap and bad.   Across the board the price to quality ratio was just excellent and I really hope that some of these wineries can find distributors here … [but] …there was only one of the wineries that had any presence in Beijing.

So the product is good and a good value. But that doesn’t necessarily solve the Chinese market puzzle.

Most of the representatives seemed rather disappointed that the turnout at the tasting was quite small and that many of those who were in attendance weren’t in the wine business (i.e. they didn’t see many prospects for finding distributors even if they found possible retail customers).  I was asking some of the representatives why Portugal seemed so far behind Spain in terms of entering the Chinese market, especially given what seemed to me the outstanding quality of their product.  The answer mostly just seemed to me a question of focus, that somehow the Spanish wine organization was just more aggressive about getting Spanish wines to China and advertising.

Steve also commented on quality and value — and the problem of focus and establishing reputation.

The[seminar] speaker, who I believe was a Chinese man from Macau, noted the long history of wine making in Portugal, the long time presence and popularity in Macau (“We drink this all the time in Macau”), the diversity of wines they are able to grow thanks to the wide range of different climates in Portugal, wines unique to Portugal – such as a “green wine” they grow in the North, which he reasoned would do well in China, being ‘fruity and sweet’ – and finally he also stressed that “Nearly all Portuguese wines are reasonably priced. It’s hard to find any in excess of 2000 RMB.”

He also expounded on why Chinese outside of the Southeast regions don’t care for white wines, which I found interesting. As for the growers and the distributors, there was some diversity to be found in “Brand Portugal”. Interestingly, some were insistent on showing tasters how they straddled both New and Old World wine making (actually, the speaker also touched on this, going on about a vineyard that had invited Australian winemakers to teach them in the ways of new world wine). Others, however, were insistent that they were exclusively Old World – “Portugal is Old World. How can it be New World – that’s not us.”

In response to how they were looking to position their wines, one of the winery reps said that they were looking to focus on promoting, above all, their grapes: the varieties, why they grow so well in Portugal, etc. And their other edge (which I heard from several people) is in pricing, “what you get for X RMB in a Portuguese wine is better than what you get for X RMB in a French wine.” That tended to be the dual answer whenever someone brought up how Chinese people generally went straight for French or Italian wines.

A Wineglass Half Full. Red or White?

Based on Matt and Steve’s reports you can be either an optimist or a pessimist regarding Portuguese wines in China. The upside is that there are many potential advantages, cost being one of them. It is obvious that Portuguese winemakers would like to be seen as a “value” fine wine and avoid the cheap and anonymous bulk wine trap. Good thinking.

But then there is a bit of an identity crisis. Old World or New? Well, both – a harder sell. Focus on regions or grapes (or both)? That requires a substantial sustained education program.

Even the most basic question is problematic: red or white?  Westerners know that crisp whites like Vinho Verde taste great with Asian foods – great to westerners, anyway. But, as has often been said, the first duty of wine in Asia is to be red.

I’m cautiously optimistic about Portuguese wines in China, especially if they can settle on the right focus and sustain the education/marketing efforts. But they have a long way to go.  Steve reports that “I noticed at a store (targeting Western tastes) last night the only Portuguese wines (out of hundreds and hundreds) were four Ports. Haven’t been to Carrefour in a while, but I bet it’s the same deal.”

Good luck to Portugal – and to American winemakers, too, of course.  China is a key market for the future. But scaling the Great Wall is a real challenge and many will fail in the attempt.

Portugal’s Adega de Borba: the Very Model of a Modern Cooperative Winery

P1110444They say that you shouldn’t judge a book by its cover and I think this applies to wineries, too. We visited Adega de Borba as part of a brief tour of wineries active in the Alentejo vine and wine sustainability program and found ourselves led astray by our first impressions.

Adega de Borba is a cooperative winery founded in 1955 and was a pioneer at the time. All the economic incentives in those days were stacked against wine and in favor of grain production in this part of Portugal in those days. It took some effort and determination to nurture and expand wine production here.

Beyond the First Glance

At first glance the original 12,000 square meter facility was what I expected from a “mid-century modern” winery, but on closer inspection I began to realize that this was both more and different than it seemed. More because the winery is a surprisingly large operation. The 300 members together farm 2000 hectares of vineyards and the winery produces over 15 million bottles a year.

And different because while the winery dates from mid-century, the ideas are not frozen in time. Looking closely, we saw that everything was meticulously clean and well-maintained as it should be but so often is not in the case of “vintage” production facilities.

And the answers to our questions about economic incentives were the right ones, too. Do the members have to sell their grapes to the cooperative, or are they allowed to hold back some (usually the best ones)? No, they must sell to us. How are they paid? By weight, of course, but with substantial adjustments plus and minus based upon objective measures of quality. Are the premiums enough to motivate a movement to quality? Yes, they are very high for the finest grapes.

Adjusting to New Market Realities

The large scale is important because wine in Portugal is low-priced by U.S. standards and price pressure is increasingly intense. Consumers who bought €3 wine (that’s where the mass market is here) before the global financial crisis are spending €2 instead and margins for exports to some markets can be low as well. So efficient production is key as well as quality that will allow sales in the higher-price categories. imagem_rotulo_cortica_reserva_tinto13_pagina

Former Portuguese colonies Angola and Brazil have been the largest export markets for Alentenjo wines in past years, but both are going through difficult times at the moment (especially Angola with its dependence on petroleum export income), so attention is shifting to other markets such as the U.S., Canada, and Switzerland, which demand higher quality, and Russia and China, where low price is a powerful factor.

Adega de Borda has moved in both directions. The Rótulo de Cortiça wines, which are easy to spot because the label is printed on a thin sheet of real cork (cortiça in Portuguese), are a good case in point. The winery sells about a million bottles of this wine each year at the astounding (for Portugal) price of €9 and even more for the reserve bottling.

That €9 price won’t seem like much to my Napa Valley friends, but it is a stunning achievement for this volume of wine in the context of the Portuguese market and is only possible because of the care and attention that goes into every stage of the process.

Uphill / Downhill

But this doesn’t explain how Adega de Borba is able to compete in markets where margins are razor thin and competition from other producers and other wine regions fierce. To understand that we had to walk up a gentle hillside to the biggest surprise of the day, a stunning  140,000 square meter state-of-the-art production and storage facility that was completed in 2011 at a cost of €12 million. A system of underground pipes connects the new winery with the old one down the hill so that the wines can be bottled there.

Everything is big about the new facility from its crushing capacity (1200 metric tons of grapes a day) to the fermentation and storage capabilities. But it is the technical efficiency that it creates that is most impressive since it allows both volume and margin-boosting quality to co-exist.

Thought and Action

I said at the start that you shouldn’t judge a book by its cover, but this big modern building might be an exception to that rule because the exterior of the new building gives away something of its high-tech interior. It is blistering hot in this region in the summer, so the building is clad in white ceramic tiles to reflect the sun with horizontal rows of white marble from a nearby quarry that, a bit like radiator fins,  provide a certain amount of natural heat control as well. Very cool (pun intended) and not necessarily what you would expect from a wine cooperative.

We came to Adega de Borba because it has embraced the Alentejo region’s sustainability initiative, but it is easy to see that this is part of an overall approach to wine growing and production, with attention to every detail and eyes firmly set on horizon. Cooperatives tend to struggle when they get the incentives wrong, fail to note changing market environments, and hesitate to invest for the future. Adega de Borba shows us how wine cooperatives must think and act to be relevant and successful in today’s markets. It is how all wine enterprises must think and act.

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As you probably guessed, this column’s title was inspired by the Gilbert & Sullivan tune from Pirates of Penzance. Enjoy.

Alentejo Wine in Transition: History and Changing Times in Portugal’s “Lodi”

seloSue and I recently returned from historic Évora, Portugal where I am spoke at the 10th Alentejo Vine and Wine Symposium. We spent about a week in the Alentejo wine region and learned a lot. This is the first of a short series of columns loosely organized around the theme of the disruptive intersection of old and new which I have found in many corners of the wine world, but none more clearly than Alentejo.

Portugal’s Lodi

The map gives you an idea of Alentejo’s location. Évora is about an hour east of Lisbon and give hours south of the Douro Valley. Portuguese leaders once thought that this region would be Europe’s grainery (more Kansas than Lodi, I suppose), but the landscape we saw was more pastures dotted with cork trees and vineyards, some of which are quite large by Portuguese standards.lisboa-alentejo

I think of Alentejo as the Portugal’s Lodi for several reasons. The first is the summer heat, which reaches up to 40 or 45 degrees Centigrade (100 to 110 Fahrenheit) or even higher in July. Difficult to grow high quality wine grapes in such baking heat. But, as markets shift, both regions feel the need to increase quality and so producers are pushing hard. And both regions are implementing important sustainability initiatives that are part of their new identities.

They both produce quite a lot of wine, too. Alentejo accounts for more than 40 percent of the wine consumed in Portugal. But the market is changing and the region must adjust and evolve. The domestic market has not fully recovered from the global financial crisis and price pressure is extreme, especially in the lower price tiers. At the same time, the traditional export markets — especially former Portuguese colonies Angola (#1 on the export list) and Brazil — are struggling.

Drawing Strength from the Old and the New

Alentejo is drawing strength from its past in this transition and from new ideas and initiatives, too. The sense of history is never far below the surface here. Évora is a Unesco World Heritage site, for example, with Roman ruins around every corner. The Romans made wine in this region and the big clay pots they employed are inspiring today’s winemakers (watch for a future column on this).

Portugal was once part of the Arab world (“Portugal,” we were told, means “orange” in Arabic and this was not hard to believe with orange trees everywhere). The name Alentejo itself reflects this history. Alentejo comes from Al Entejo (just as mathematic’s algebra was originally al gebra).

Old practices and a wealth of indigenous grape varieties are more than living history — they form building blocks, but bold initiative is needed for glue. The next three columns will explore this dynamic.

First I will introduce you to Adega de Borba, a big cooperative winery that is moving decisively into the future. Then I will take you into the world of cork by visiting Amorim cork’s processing plant in Alentejo and its high tech labs and production facilities in the north. Finally, we will go back in time to the wines made in big clay pots when we meet with winemaker Domingos Soares Franco at José Maria da Fonseca‘s José de Sousa winery.

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One of the highlights of the conference was a dinner that featured a group of men who sang the famous Cante Alentejano that is unique to this region. It was a moving experience to hear the singing that turned to pure joy when we learned that the singers were winegrowers — members of the Vidigueira  cooperative. And to top it off, we were drinking their excellent wines. What an experience!

Swirling Wine Export Currents: China, Australia, Portugal, Angola, USA, Brazil

wine-glass-swirlSue 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.

exports1

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.

exports 2

[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.

exports3

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?

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