Resurrection men

Wines of Portugal plan to bring the country back from the brink of generic obscurity and massively increase market share.  Patrick Schmitt finds out how they plan to do it

Trincadeira and Trajadura or Alvarinho and Arinto aren’t exactly the easiest names to utter, especially when you include the rapid fire throat clearing required for the correct pronunciation.

And yet these are just some of Portugal’s indigenous grape varieties, ones occasionally listed on labels as if the British consumer will nod knowingly in the aisle having spotted them among the array of Cabernet Sauvignons. 

Then there are the regions. Ribatejo, Estremadura and Alentejo to name but a few, which, well, hardly compete with the Algarve for recognition. 

Put place and grape together and for many the wines become more of a conundrum than anything Countdown’s ever come up with – and if you thought the time constraint on the game show was testing, try the average time most people spend choosing wine.

So there’s the stumbling block for Portugal’s marketing men, but how does it affect the country’s current situation in Britain? Well, at present the market share for the country’s wines in the UK is around 1.6% according to Joao Costa from Wines of Portugal and the figure has remained fairly static.

This, he believes is not because Portugal’s sales are stagnant, but because the market is growing at around 5% every year and Portuguese wine is simply increasing at the same rate.

However, if one considers total Portuguese exports (see table), there was an actual decrease in volume in 1999 and then again in 2000, but not because of shrinking demand abroad, but rather due to reduced supply at home.

 "Exports in 1999 and 2000 in particular are lower because ’98 was such a small vintage – half the average in Portugal for quite a few years – and it has had an influence over the next two to three years," explains Costa.

In spite of this, though, he does admit there may have been some decline in demand in terms of volume as foreign markets are searching for higher quality Portuguese wines but in smaller quantities.

But it is the low level of supply – coupled with healthy domestic demand – that has removed much of the incentive for Portuguese producers to really develop markets abroad. "They can sell wines at a better price on the home market," says Ben Campbell Johnston, brand manager at John E Fells.

"They can’t produce enough wine to satisfy the home market so they don’t export anymore – but this situation won’t be there forever," he warns. And for this reason most believe Portugal needs to do more to market their wines abroad, especially as AC Nielsen recorded a decrease in the off trade between 2001 and 2002 in the UK of 7% in volume and 8% in value for Portugal’s wines.

Furthermore, the average price of a bottle of Portuguese wine is £3.99 in specialist multiples and as little as £3.16 in grocers, which is a pretty low ranking average, putting the country behind Chile and South Africa.

And such a persistently low price point for Portugal is hardly going to build a quality image for the country – something it desperately wants to achieve.

As Joao Pedro, director of Portugalia Wines points out: "The approach by the multiples to Portugal is to have the instant reaction of ‘no, we aren’t listing any more wines because there isn’t the demand for them’ and yet there tends to be a typical average price range for Portuguese wines of £3.50 to £4.50 which is the reason why the multiples don’t get more demand because if they only stock a low average price range they can’t expect people to like the wine so much."

"It’s a difficult nut to crack," he concludes after a pause.  However, having said that, he, like others do see a solution, mainly in the form of some generic promotional activity, an attempt to brand Portugal.

This is because if the wines are to succeed in sales abroad they must be billed as part of a lifestyle – which Reynolds sees as being "not hip and energetic like Spain but something uniquely Portuguese."

The place names and grape varieties may be nigh on unpronounceable for the British consumer but considering the numbers visiting Portugal every year Reynolds mourns the fact "there is no real exposure to the wine industry, its uniqueness, history and culture."

Furthermore, "no one is trying to entice people to see for example the dramatic ruggedness of the Duoro."  But do this and it might be possible to build a particular image for the wines, something striking and memorable to differentiate Portugal in the consumer’s eyes.

Nevertheless, it won’t just be pretty point of sale and wine tourism that will build recognition and a following for the country’s wines.  People will also need to trust what’s in the bottle, something Wines of Portugal are hoping to encourage with greater exposure to the different styles. "Basically we’re opening more bottles," Costa comments, "we’ll be doing much more in-store tastings."

However, it’s not only at the category level where work needs to be done. It is also up to the individual producers to help make their wines more accessible. And it seems some are addressing in particular the problem of the obscurity of Portugal’s indigenous grape varieties in two different ways.

There are those who, according to Costa, "are producing wines with Portuguese grape varieties but in a more modern way to make the wines more suited to international taste buds, while others are blending Portuguese varieties with an international one, for instance Alvarinho combined with Chardonnay.

"Producers are doing this," Costa continues, "because they believe consumers are getting bored with international grape varieties and want to capture that opportunity in the future. So, with Alvarinho, people will get to know the grape by associating it with Chardonnay – and then eventually on its own."

As for white versus red wine, it seems opinions are divided on what Portugal should be famed for. Reynolds, for instance, believes the whites have a "huge future, and might outgrow the reds in the next few years," because "they present a credible and sometimes more credible alternative to the Sauvignons, Chardonnays and perhaps Pinot Grigios."

In addition, his top selling Portuguese wine is white – and the whites are apparently particularly good value because as Reynolds puts it, "no one wants them in Portugal."

Traditionally of course, the country is better known for its reds, which Pedro believes are really delivering "high quality wines" and although he senses the whites are beginning to do the same, "the style is so different they are taking longer to be recognised."

Overall though, the country is increasingly making distinctive and accessible fruit driven wines that certainly those in the trade believe over-deliver on quality.

In particular, wines from the Duoro region, possibly helped by the place’s connection with port, are achieving rising recognition in the UK, and a number of port shippers have woken up to the potential of this region for non-fortified wine.

However, it will be interesting to see whether Portuguese wines can significantly increase their market share in this country, especially at the rate Wines of Portugal are planning – "a 100% rise in the next two or three years, so a 3% share by 2005," according to an optimistic Costa.   But, good luck to them.

It just seems a shame the most interesting and desirable aspect of Portugal’s product – its indigenous grape varieties – is the hardest part to market.