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

P1110385 The 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 Time

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 Blend

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

June 3, 2016 By Mike Veseth in China wine, Flashback Friday, Portuguese wine Leave a comment

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

May 24, 2016 By Mike Veseth in cooperatives, Portuguese wine, sustainability, wine, wine markets 3 Comments

P1110444 They 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”

May 17, 2016 By Mike Veseth in cooperatives, economic crisis, emerging wine regions, Portuguese wine, wine, wine exports 3 Comments

selo Sue 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

May 2, 2016 By Mike Veseth in globalization, Portuguese wine, wine, wine markets 1 Comment

wine-glass-swirl 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.

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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.

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[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.

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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?

Flashback Friday: A Rainy Day in Porto

April 29, 2016 By Mike Veseth in Portuguese wine, wine, wine tourism Leave a comment

We have been in Porto this week and so it seems right to flash back to my first visit there in 2014. It had been raining in Portugal that year. Lots of rain. For a long, long time. It was pretty wet!

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fp0621 I had one free day during my recent visit to Porto and as much as I wanted to go up the Douro to the vineyards, a torrential downpour kept me in the city. So I set out to see what sort of wine tourism experience Porto had to offer and I learned a lot. Here is my report.

Sign of The Don

There is much to see and do in Porto itself, but serious wine tourists need to cross the bridge spanning the Douro and enter Vila Nova de Gaia where the Port houses are found lined up along the river and up the hillside.

The riverside was brightly decorated — a welcome touch given the weather — and featured many of the small boats that traditionally transported the wines from the vineyard areas down to the city, where they are aged and blended and sent to market. The wines are moved by more modern means today, although there is still a gala race, with much honor to the Port house with the winning boat.

My first stop was Quinta do Noval, where I took refuge from the rain and tasted through the wines while drying out. I have to say that there cannot be a better way to warm up than this! No tour or museum or sophistical wine tourist presentation at this stop — just nice wines, friendly and well-informed staff.

My next stop was Sandeman, one of the oldest and best known Port houses. You see “The Don,” the famous Sandeman logo, everywhere in Porto. Founded in 1790 by George Sandeman, a Scottish wine merchant, Sandeman has interests both in Portugal (Port) and Spain (Sherry). The Don’s distinctive outfit pays tribute to both sides of the business — the Spanish hat paired with the cape worn by university students then and now in Porto (I saw them myself on exam day). If you thought the logo was a tribute to Zoro, think again.

Tree Ages of Port

The wine tourism experience at Sandeman begins as you enter the house, which feels and smells exactly like what it is — a great old warehouse where wines wait patiently in their barrels, often for decades, for the moment when they will be bottled and go to market. Very atmospheric, immediately communicating a sense of time and place (much like the vintage tv advertisement below).

The first stop once you’ve come through the great doors is a colorful museum dedicated to Sandeman’s great success in branding and marketing. The Don must be one of the most distinctive and instantly recognizable trademarks in wine and the museum tells the icon’s story from the first images in 1928 through the present day. It’s an art exhibit at heart, but with a commercial agenda and it is interesting to see how the images and messages evolved over the years.

Next came the tour through the big building. The young woman who guided us was dressed as The Don, of course, but she was more professor than student as she made sure, though example and strategic repetition, that we all understood the nature of the different types of Port — Vintage, LBV, Tawny and so on — how they are made and how they are best consumed. She was very skilled at bringing her students into the story.

Wine Tourism Keys

Walking through the barrel rooms was like walking back in history (which is what we were doing, I suppose), but this is a working operation not a museum and we would have seen the cellar hands going about their business if it hadn’t been Sunday. The tour ended with an opportunity to taste a couple of wines at long tables adjacent to the cellar door sales room and gift shop.

I spent some time talking with a family from Tokyo who were making a European tour and had spent three days in Porto, enjoying experiences like this. Each of the Port houses seems to tell its story in a different way, some focusing on their history, others on the production process. Many, like Sandeman and Graham’s, offer a variety of tasting experiences in addition to the basic tour. Port pairing seminars (cheese, chocolate) are popular, for example, as well as opportunities to taste Tawny Port blends of 10, 20 and 40 years or more. Something for everyone and a satisfying experience even on a sunny day, I’ll bet.

What should a wine tourism experience do? I think of wine as a relationship business and a winery or tasting room visit succeeds when it helps establish new relationships and deepen or renews existing ones. From the tourists’ point of view, it should be enjoyable and informative — and of course offer the opportunity to taste new wines or to share familiar ones with traveling companions and provide stories to tell the folks back home.

From a producer viewpoint, the goals are to get visitors to slow down and absorb the message and this of course requires that there actually be a coherent message presented (too often it seems the objective is simply to attract numbers of visitors). Cellar door sales and wine club memberships are obviously important, too, but only come if the first goals are met.

The Sandeman experience and others like it in Porto succeed from both standpoints. Certainly there was clear and coherent messaging on my tour — about both Port the category, Ports (the various types of Port wines) and the Sandeman brand in particular. (How can you miss that when your tour guide is costumed like the company logo?) When it works it really works. No wonder the major Port houses have invested so much in wine tourism as a way develop their international brands.

Little Frenchie: A Culinary Side-Trip

Soon it was lunchtime and I could not really expect to top the meal I had the day before at Vinum, the great restaurant up the hill at Graham’s, so instead I went for the distinctive meal of Porto: the Francesinha or “Little Frenchie” sandwich.

My Francesinha started with thin layers of cheese on the plate, which was topped with white bread and then roast pork, sliced ham, a bit of chorizo, more cheese, another slice of bread, more cheese, and then a thin reddish beer-based sauce (think enchilada sauce and you will be in the ballpark).

Because I apparently am not a very good judge of these things, I went over the top and ordered the deluxe version which added a fried egg and a plate of french fries. It was wonderful in the way that Canada’s famous poutaine (french fries, cheese curd, gravy) can be wonderful and I didn’t have room for anything else (except a little Port) for the rest of the day.

I had a great time, learned a lot, met some interesting people. I promise I will get to the Douro vineyards next time, but I wouldn’t miss touring the Port houses for anything. The variety of experiences available if you visit several houses provides something for everyone, from Port novice to seasoned connoisseur.

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Thanks to George Sandeman for his hospitality while I was in Porto and his help with this project. I found this YouTube video that captures a bit of the Francesinha experience. Would I eat it again? Yes, but I’d choose the traditional beer to go with it rather than the red wine I enjoyed at my riverfront restaurant, which claimed to have the best Franceshina in town.

Portuguese Wine Revisited: Respect! (What a Difference 2 Years Can Make)

April 26, 2016 By Mike Veseth in Portuguese wine, wine, wine markets 2 Comments

The next few columns with be shorter than usual because Sue and I are Portugal. I will be speaking at the 10th Alentejo Vine and Wine Symposium in Évora next week.

We are in Porto today and it is great to be back. I was here in 2014 to speak at a symposium sponsored by ACIBEV. I had a great time (look for a “Flashback Friday” about that visit) and made many friends.

I had a number of striking experiences during my 2014 visit, but one really stands out. I met with a senior executive of one of the major wine producers and he wanted to know what Portugal could do to get more respect in the world of wine — and especially in Portugal. evora1

Portugal has great history, great terroir, great wines — but that greatness isn’t always recognized, he said. He was especially dismayed that Portuguese wine was not better respected within the country. Wine is a strong economic sector in Portugal and an effective ambassador for the country abroad. How do other famous regions get the respect that we lack? What can we do to change this situation?

I did not have answers that day, but it got me thinking (which was the idea, I believe). My investigations turned into a lecture that I have given several times on the subject “Secrets of the World’s Most Respected Wine Regions.”

I don’t want to give away the secrets here, but I can tell you that just a few months after the meeting in Porto the missing respect started to show up, at least on the international stage. evora2

Portugal has received lots of great press in the last two years and the wines have earned a growing share of critical and commercial success. As the image up top indicates, three of Wine Spectator’s top four wines of 2014 were from Portugal. And, as the second image shows, Portuguese wines are winners in the U.S. market. If this isn’t a sign of respect, I don’t know what is.

How about at home in Portugal? Does the Portuguese wine industry get the respect (and favorable government policy treatment) it deserves here? I will have to learn more before answering that.

In the meantime, there is much to discuss about Portugal’s wine industry because the market is evolving. Come back next week for a follow-up column that analyzes Portugal’s shifting wine export environment is more detail.

Speaking of respect …

Here’s That Rainy Day: Wine Touring in Porto

May 20, 2014 By Mike Veseth in Portuguese wine, wine tourism 4 Comments

Sign of The Don

Tree Ages of Port

Wine Tourism Keys

Little Frenchie: A Culinary Side-Trip

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Wine Innovation: Lessons from Portugal

April 29, 2014 By Mike Veseth in brands, popular culture, Portuguese wine, wine markets 1 Comment

Innovation is a hot topic in the wine industry these days. While some wine brands can depend upon their traditional markets, messages and products, many producers find themselves under increasing attack from “the crafts” — craft beer, craft cider and craft spirits.

One advantage that these alcoholic alternatives seem to possess is the heightened ability to adapt, evolve and excite — to innovate in various ways that keep customers coming back to see what’s new.

How wine got in this situation is a long story that I will tell another time and whether wine should even enter the innovation wars is something that is hotly debated. Some new wine products have been criticized as “pop wines” that debase and therefore threaten the whole product category — not a view that I endorse, but I can understand the concern behind it.

So I was very interested in looking at innovation during my visit to Portugal and I found it in many different forms. I thought you might be interested in a little of what I discovered.

Port: No Wine Before Its Time

Port, which is arguably Portugal’s signature wine, is an example of a wine category that is both timeless and highly innovative. Timeless in the sense that Port wines have in many ways remained much the same for several centuries. White Ports, Ruby Ports, Tawny Ports — in fundamental respects these are the same today as they were 100 or 200 years ago. Almost nothing is as traditional as Port, with its stenciled bottles and historic brands.

This is a plus and also a minus. The plus of course is brand recognition — only Champagne was a stronger brand than Port from a name recognition standpoint. But it’s a minus, too, because that brand, like Sherry, is wrongly associated with one-note sweet wines. Like Rodney Dangerfield, they sometimes don’t get the respect they deserve.

And it is a minus because the traditional Port wine styles are exercises in patience in a very impatient world. Tawny Ports must be held by the maker until they are mature in 10, 20 or even 40 years. That’s a lot of time to wait with the investment time clock running. Vintage Ports need time, too, but this time the buyer is expected to patiently wait for the wine to mature.

Time is Port’s friend because of what they do together in terms of the quality of the final product but, from an economic and market standpoint, time is also an inconvenient enemy and seemed to limit Port’s potential in the postwar years.

The answer to the time problem was an innovation that appeared in 1970, when Taylor Fladgate released their 1965 Late Bottled Vintage (LBV) Port. LBV has the character of Vintage Port but is ready to drink when released, not 20 years later. It was not quite the Chateau Cash Flow killer app of the wine world, but it certainly breathed new life into the Port market at a moment when this was especially welcome. Some say that LBV saved the Port industry and I think this might be true.

Colorful Port

Red and white are the traditional colors of Port, but recently some makers have innovated to try to get the attention of younger consumers who have as little interest in their notion of grandfather’s Port as they do in their stereotype of granny’s Cream Sherry. Croft Pink Port and Quinta de Noval Black Port are examples of this innovative trend.

Pink Port is made in a Rosé style, with less skin contact and therefore fewer grippy tannins than Ruby Port. The Croft website is fully of cocktail ideas so perhaps this is a Pink Martini killer wine? Richard Hemmings, writing on the JancisRobinson.com website, makes the wine sound like an excellent option for the many Moscato lovers in your life.

97g/l RS, 4.2g/l TA. Raspberry juice, bubblegum, pink apples and fresh strawberries. Sweet and full on the palate, good concentration. Well balanced and smooth, creamy texture with a mouth-watering burst of fruit on the finish. Very good, not massively complex but a worthy product. (RH)

Noval Black is more traditional in style and color, with more of the tannins than the Pink. Less complex than my favorite LBVs, but interesting. I agree with the website’s chocolate pairing suggestions, although I haven’t tried any of the cocktail-type recipes. Here is Hemmings’ take on Noval Black:

Ruby reserve in style, with an average age of 2-3 years old. Aimed at younger consumers, as the flashy website attests! Fruity, jammy, figs and dates. Sweet and supple, with a glacé cherry flavour and a simple, satisfying style. (RH)

Product versus Process Innovation

So far I have focused on product innovation but I haven’t mentioned process innovation and that is a mistake ,as I learned from a winemaker during my stay in Porto.

George Sandeman of the famous Port & Sherry family invited me to taste through the Ferreira line of wines and Ports and of course the Sandeman Ports. How could I resist? Even better, we would be joined by Luis Sottomayor, Porto Ferreira’s award-winning winemaker.

The bottles and glassware filled the big table as we began to taste through the Casa Ferreirinha wines then the Ferreira and Sandeman Ports. The wines were eye-opening. From the most basic wines selling for just a few Euro on up to the super-premium products they were well-balance, distinctive and delicious. Not all the Portuguese wines that make it to the US market have these qualities.

I have a star in my notebook next to the entry for the Casa Ferreirinha Vinha Grande Red 2010, for example. A blend of classic Portuguese grape varieties from two Douro regions, it spent twelve months in second the third use oak. Easy drinking, soft tannins, nice finish, classy, well-made. Cost? About Euro 10. in the home market or $19.99 in the US.

“Delicious” I wrote next to the note for the Casa Ferreirinha Quita Da Leda Red, which comes from an estate vineyard just 1 kilometer from the Spanish border. It is the product of a small winery located within the company’s larger facility. Spectacular wine, special terroir, I wrote. US price is $64.99 and worth it.

As we tasted through the Ports I started to talk about innovation — Pink, Black and so on. Sottomayor stopped me in my tracks. If you want to really understand innovation in Portugal, he said, you have to look beyond new products to the work that is being done to improve the process in the vineyard and the cellar. This is where the real gains are, as seen in the table wines I had just tasted and the Ports I was about to sample.

Taste this LBV, Sottomayor said. The LBVs we make today are of the same quality as the Vintage Ports we made 15 years ago. And the Vintage Ports are that much better, too. New products are part of the story of Portuguese wine innovation, but improved winegrowing and winemaking are just as important now and probably more important in the long run. Lesson learned!

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I came away from the tasting described above both richer and poorer. Richer because Sottomayor’s lesson about innovation will save me some money — as much as I enjoy Vintage Port and will continue to buy it, I now have LBV centered on my radar screen and it sells for a good deal less.

And poorer? Well, Sandeman and Sottomayor set up a little experiment for me, first letting me taste their 10-year old Tawny Ports and then the 20-year-olds. We like the 20s, George Sandeman said, because you can taste where they’ve been (the 10-year old wines) and also where they are going (the 40-year old Tawny that I tasted next). The tension between youth and old age makes the 20-year old Tawny particularly interesting, he said.

And I am sad to say that I could taste exactly what he was describing. Sad? Yes, because 20-year old Tawny costs a good deal more than the 10 and for the rest of my life I am going to be paying that extra sum!

Congratulations to George and Luis on the great ratings that their 2011 Vintage Ports have received! And thanks to them and to Joana Pais for their help and hospitality.

Can Portugal Win the Wine Wars?

April 22, 2014 By Mike Veseth in Portuguese wine, wine markets, Wine Wars 2 Comments

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!) acibev2

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