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“standfirst”>International grape varieties might smooth the way for Portuguese blended wines, but they limit the impact of Portugal’s USP – its treasure trove of grape varieties, says Patrick Schmitt
Paul Symington has, what seems on first hearing, a surprisingly modest hope for Portuguese wines. “When someone on their way home from work stops at Tesco Metro to pick up some pasta it would be good if, instead of picking up a bottle of Chilean Cabernet, they reached for a Touriga Nacional from the Douro.”
This is a humble request perhaps, but certainly not an easily achievable aim. For a start, so anorexic is the range found in your average convenience store, it’s likely the only Portuguese offering the consumer could pick up on his way home would be pink, and produced by SoGrape; secondly, as Symington admits, Portuguese wines are “not on people’s radar screens at the moment”; and thirdly, although Touriga Nacional is probably the best known of Portugal’s varieties, it’s still not a Shiraz.
These are the problems Portugal faces: it is weakly represented on the supermarket shelf, it has no real image to speak of, positive or negative, and its indigenous varietals are not recognised by consumers. But the trade is aware of this, the question is how to change it. In fact, many hoped that at least the image issue would alter after Portugal’s hosting of Euro 2004, but the football supporters have been, consumed terrifying quantities of lager and gone, just like the droves of tourists who year after year flock to the Algarve. The fact is, Portugal’s share of the UK market is the same this year as it was last year. It will take more than a sporting tournament or a beach holiday to get people interested in Portuguese wines.
Nevertheless, sales of Portuguese produce in the UK have increased, it’s just they’ve only risen in line with the overall market expansion, hence the static share. Although there are some countries experiencing decline, Portugal’s performance is not enough to encourage buyers to consider expanding their range from this part of the world. After all, Portugal sells only around 850,000 cases in the UK, fewer than New Zealand, as well as Argentina, and these sales give it a 1% share of the market. Furthermore, its value share has slipped, even if only marginally, dropping from 0.9% (MAT to w/e 24.01.04) to 0.8% (MAT to w/e 22.01.05), while the country’s average price is a pretty lowly £3.26 (MAT to w/e 22.01.05), although it has crept up from £3.25 at the same time last year.
So what can be done to boost sales of Portuguese wines which, after all, are highly regarded by the press? The development of leading brands is one solution as consumers are more likely to experiment with Portugal if they can find something recognisable, memorable, safe and consistent. Mateus Rosé, although certainly a brand success story, is unlikely to really help the reputation of Portugal abroad, and in any case, consumer research has shown that pink wine is not associated with Portugal by most shoppers.
However, Nick Oakley of Oakley Wine Agencies believes he has found a solution which comes in the form of competitivelypriced, simply-labelled, southern-Portugalsourced brands with, importantly, English names. Also key is the addition of an international varietal to the mix, but we’ll deal with that later. Oakley’s Tagus Creek and The Cork Grove have caught the imagination of buyers with their modern feel and pronounceable names. “They have opened the floodgates,” he says, “and not just in the UK; all of northern Europe is buying into Portuguese wines with English labels.” Of other Portuguese wines he says, “It is a piece of paper on the bottle that is stopping the market growing.”
Oakley certainly has a point, and one with which Felipe Fernandes, sales manager at D&F Wine Shippers, producers of brands such as Ramada and Segada, certainly agrees. “To increase share we need to become more consumer friendly,” he comments. “There are a lot of unknown regions and varieties.”
But, as Symington thoughtfully points out, it might take more than a few well targeted, and well-designed wine brands to really boost the market and develop a longterm interest in it. He sees the need for an inspirational high-volume producer, an easily exportable personality. “There’s no Torres or Antinori in Portugal,” he laments. “And the small producers in Portugal are beginning to realise they will benefit from a big, strong brand. Take Mondavi; he did a fantastic job for California and then a lot of small producers came into the market on his coat tails.”
Familiarity breeds confidence
But without a widely recognised brand ambassador for Portugal, even though there are a handful of smallscale producers with something of a cult following, there are other mechanisms still at the agent’s disposal that can be employed to encourage people to pick up Portuguese wine. One key technique is to use the varietal as the cue. This is hard with Portugal’s indigenous offerings, so several producers have added a recognisable international grape into their blends, and made it prominent on the label. Fernandes is a believer in this method, recalling some of his own company’s blends for foreign markets which include, under the DFJ brand, a Tinto Roriz and Merlot, as well as an Alvarinho and Chardonnay, “because this gives the consumer confidence”.
Oakley is also an advocate, recalling a Waitrose listing of both The Cork Grove Touriga Nacional and the Syrah/Touriga Nacional. The latter “outsold the Touriga Nacional four-fold, and I felt the Touriga Nacional was slightly better, but it was the Syrah that was selling the bottle”, he explains. But he’s keen to add, “Portugal does make brilliant Cabernet Sauvignon, Syrah, etc; it’s not just to sell the wine.”
Having said this, many believe it’s vital that Portugal doesn’t dumb down its key USP – its library of indigenous varietals – by planting a mass of recognisable ones. As Raymond Reynolds of Raymond Reynolds Wines warns, “It’s always easy to go for an international variety but in the long term we should be thinking, how can we make better Aragones or Perequita? If you start trying to internationalise, then everything comes down to price.”
So, there are ways to get consumers to grab something Portuguese, but how do you get them thinking “Portugal” before they even enter the wine aisle? This is something for the generic marketeers. However, as noted earlier, Portugal lacks a powerful image abroad, something several blame on its failure to promote itself in a coherent manner. For instance, there is Icep, Vini Portugal, the Douro Boys and the UK Association of Portuguese Wine Importers (APWI), and the latter organisation, at least, is keen for a more unified approach to promoting Portuguese wines in the UK. In fact, the group of importers, which represents around 98% of all Portuguese wine sold in the UK, according to Danny Cameron, chairman, is keen to encourage a UKstaff dominated base – a sort of Michael Cox/Wines of Chile style setup which buyers and press can call up. “And we are going to do it,” says Oakley. This, the APWI hopes, can be funded by the increased budget the UK market has been granted after last year’s Porter Report which suggested Portugal concentrate on the UK and US markets. The result is a six-fold increase over the next three years to be spent on Portuguese wine promotion, and the APWI is desperate to ensure it is sensibly directed.
Paulo Amorim, vice president of Vini Portugal representing the G7 producers – Caves Aliança, Caves Messias, Finagra, Herdade do Esporão, Bacalhôa, José Maria da Fonseca, Quinta da Aveleda and Sogrape – Vinhos de Portugal – has a number of plans to improve the status of the Portuguese wine industry, backed by European funding.
“We will concentrate our marketing investments on two strategic markets, the UK and US, plus Germany and the Nordic countries. On top of this, two new steps will be taken; to launch a new superpremium wine, called SETTE, resulting from the cooperation of the seven wineries and to set up a common buying operation, in order to acquire the bottling materials at preferential rates and conditions.”
Nevertheless, however this new influx of investment is spent, the Portuguese will have to decide on something positive that relates to wine which they can use to grab consumers’ attention. Reynolds suggests that Portugal’s grape varieties and “taste profile of the wine” are key differences, while Oakley suggests the country could draw on the fact that it produces the world’s leading fortified wine. From a non-wine perspective he cites the golf courses and beaches of the Algarve “which are associated with pleasure and relaxation, the same two things we associate with wine.”
But whatever the message, it’s worth noting that the Douro is already emerging as a respected table wine region, independently of the rest of Portugal’s efforts. The IVDP (Instituto dos Vinho do Douro e do Porto) is pushing the strapline Port Wine Terroir to encourage interest in the region’s table wines, or “to link these apparently different products,” explains Paulo Pinto, marketing director for the group. “If we communicate the Douro wines well, then all Portuguese wines will benefit,” he says. “It will prove that Portugal can produce very good quality wines.”
Of course, if this can shine a light on the whole country then it’s hoped the south, source of the commercial volumes, will be given due attention, and perhaps by major international drinks companies. And for those looking to build a large-scale brand, as Reynolds says, “The vineyard area in the Alentejo has gone up in five years from 13,000ha to 20,000ha against a market which is not expanding in consumption – so there are going to be a lot of cheap grapes around. Somebody like a Gallo or a Constellation might pick up a winery or group of wineries and use Portugal’s USP to drive another brand – and I think that would be good.” There is, however, one thing a large-scale brand builder might want to remember, and that’s something Philip Harris, sales manager at Laymont & Shaw points out. “The impression I get is that people don’t want something too genuine, too Portuguese; they want a Portugal ‘Lite’, if you like.”