Portugal rides export wave

While exports from European competitors decreased last year, Portuguese still wine exports increased in value and volumes. Galvanised by the rise of exports, Portugal’s bigger companies face the challenge of raising the low average export prices.

Barnaby Eales has the story.

Casa Santos Lima’a 2u Lisbon wine became the biggest selling red wine brand in Finland last year. Pictured here are vineyards in the Algarve, where the company has planted 50 ha of vines.
Casa Santos Lima’a 2u Lisbon wine became the biggest selling red wine brand in Finland last year. Pictured here are vineyards in the Algarve, where the company has planted 50 ha of vines.

 

Portuguese wine exports have leapt by 20.3 percent in value this year, a dramatic increase when compared to the 3.3 percent average annual growth recorded over the past ten years. Together with this year’s growth in the US and Brazil, the surge in Portuguese exports of quality still wines, sold at attractive prices, points to a recovery in key EU markets, including Germany, where there’s a growing thirst for Portuguese whites. Despite tremendous growth last year in Sweden and Finland, where Casa Santos Lima red wines outstripped their French and Australian counterparts to become the biggest selling brand, Portuguese wine exports decreased in the EU last year overall. 

Portugal bucked 2020’s global trend of a fall in exports, by increasing exports, with growth predominantly recorded in the US and Brazil, Alentejo’s biggest export market, where in contrast to the overall global downturn in consumption, wine drinking increased by 18 percent according to the OIV (International Organisation of Vine and Wine). Portugal had already raised its profile prior to the uncertainty of the pandemic and Brexit and was therefore a good option for importers to turn to, says Max Driscoll, a manager at the wine import company Raymond Reynolds Ltd in Britain.

 

Still Wines

Globalisation and the rise of tourism to Portugal over the past decade have sparked an interest in the distinctiveness of Portuguese wines and the indigenous grape varieties, says João Gomes da Silva, head of marketing and sales at Sogrape, Portugal’s biggest wine company. If Portugal was once best known for its Port and Madeira wines, it’s the country’s quality still wines, now fresher and less oaky, which are now seizing the world’s attention. Still wines now account for about 65 percent of the value of Portuguese exports, a market share held 20 years ago by Port exports, says Frederico Falcão, chairman of ViniPortugal’s national wine promotion agency. Faced with decline in Port sales, Port companies are this year exporting Portonic wines in cans. 

 

A Portuguese wine campaign launched in 2020 in Brazil – a fast growing market for Portuguese wines – where some Portuguese producers have changed bottle labels for the Brazilian market

 

Over the past decade, with investment from the biggest wine companies in Portugal, wine producers like Dirk Niepoort in the esteemed Douro region, and single estate producers are increasingly transforming winemaking, now making more graceful still wines. 

Lisbon’s still wine exports have doubled in growth over the past five years. Vinho Verde, where Alvarinho and Loureiro grapes have a growing presence, is this year’s fastest growing export region, and its biggest producer, Aveleda, has recently launched Vinho Verde wines in cans.

 

Regional diversity

Sogrape’s revitalisation of age worthy, acidic Arinto from Bucelas in Lisbon, and Portoalegre wines, comes as Esporão, Casa Santos Lima and Avelada have made vineyard acquisitions in the Douro, Algarve and Vinho Verde in recent years. That said, the country’s wine regions remain a beguiling mystery to many. Luis Almada, an executive board member of Lisbon-based wine company Casa Santos Lima, whose turnover was up by 30 percent last year and which exports 90 percent of its production, says Portugal needs to communicate more about its regional diversity. “Our regions don’t have the same visibility as French or Spanish wine regions,” he says.

 

Esporão released its first certified organic Reserva white last year / Credit: Esporão

 

Export price challenge

A new generation of low-intervention winemakers providing greater value has driven further international interest in Portugal, as reflected in the growth of Lisbon wine fair, Simplesmente Vinhos. With wines made from unusually named grape varieties like Bastardo, including the rise of lesser-known sparkling and rose wines, producers are providing authenticity and singularity. However, one of the Portugal’s challenges is to increase its average export price – some producers who sell at higher prices, are finding it more difficult to sell wines due to the overall quality of lower priced wines made in bigger volumes.

Despite the revival of Vinho Verde by the likes of Anselmo Mendes and producer Soalheiro, which increased exports by 20 percent last year, importers generally only expect to pay €2 for Vinho Verde wines, says Rodrigo Soares, a producer in Baião, whose export price for aged 1,000 Curvas wines is €6.50 a bottle and upwards. In 2020, the average price of Portuguese wines fell by 1.6 percent to €2.71 per litre, compared with 2019. ViniPortugal’s €7.1M budget this year aims to reach out to sommeliers and wine merchants in 20 markets and to create a wine monitoring facility. “Our strategy is to increase the value of wines, not to export more,” says Frederico Falcão, ViniPortugal’s Chairman.

Esporão has become the first of Portugal’s leading wine export companies to convert vineyards to organic production. They believe the move will increase the value of its company rather than lead to a rise in prices. This year its Quinta dos Murças in Douro became organically certified, bringing the company’s total area of organic vineyards to 730 ha.

 

Macanita Vinhos' winemaker, Joana Macanita, who makes wines in several Portuguese wine regions including the Douro and the Algarve

 

Meanwhile, Macanita Vinhos, which makes premium wines in several Portuguese regions and mainly supplies restaurants, has shown resilience during the pandemic. Run by brother and sister Antonio and Joana, Macanita Vinhos says it addressed the initial pandemic panic with a temporary reduction in prices in some markets such as the US, the launch of online sales, and the creation of a new premium range for a Portuguese supermarket. Growth has already rebounded this year to a 30 percent increase in sales, reaching a level higher than that of 2019. 

Antonio Macanita’s Prophets wine, made from Listrao Branco grapes from Porto Santo, Madeira’s sister island, and the Vinha dos Utras 2019 wine from the Azores, where it opened a new winery this year, are just two of the numerous exciting still wine projects to have emerged further afield from Portugal’s main export regions this year, further generating value and global interest in Portuguese wines.

 

The rise of Portugal in numbers:

Portuguese wine exports in 2021 (Jan to May 2021)
Value up 20.3% to €360.3m
Notable increases: 
US up 22.8% to €45.8m (average export price €3.46)
Brazil up 43% to €26.2m
EU export increases (Germany, France, Belgium, The Netherlands, Scandinavia, and Poland)
Exports to Ireland leapt up, whilst the growth of exports to the UK slowed.
Regional increases: Port, Madeira, Douro, Vinho Verde, Lisbon and Setubal

Portuguese wine exports in 2020 compared with 2019
Value: €846m, up 3.2%.
Volumes: 3.1m hl up 5.1%.
Average export price per litre: €2.71 down 1.9%
Non-EU exports: up 25.5% to €457.4m
Exports to North America: up 13.5% to €92.2m
Exports to UK up 16.2% to €90.3m (average export price: €4.35, second only to France).
EU exports: down 14.6% to €388.6m, but around 72% in Finland and 40% growth in Sweden and Norway
Port and Madeira exports down, but increase in PDO, PGI and table wines.

 

Wine company figures: 

Esporao:
YTD EXPORTS 2021 (to June): sales: +36% €10.7M 
Volumes: 280K 9Lcs 
EXPORTS 2020: 
Sales: €18.6M +4% vs 2019 Volumes: 490K 9Lcs
Main growth in Brazil, USA, Canada, Germany, Netherlands, Luxembourg, and Switzerland. China, Mozambique, France and Poland have also grown.

 

Sogrape:
Exports evolution in 2021 (YTD) +16% in volume and +24% in value

Total growth per region from January to June 2021 (growth in volume and value)
Region                        % volume       % value (exports)
Mateus                       +27%              +27%
Vinho do Porto           +30%              +32%
Douro                         +29%              +45%
Vinho Verde               +23%              +22%
Dão                             -5%                 -2%
Alentejo                    +157%            +150%
Lisboa                         +23%              +15%

Markets (global and with best performance) – Russia, UK, USA, Belgium, France, Italy, Canada, Angola, Switzerland, Denmark

 

Avelada in 2020:
Sales: €40M from 20m bottles sold
Of 90 markets the main markets are USA, France, Germany, Brazil and Canada and new growth in Baltic countries.
 

 

Barnaby Eales
 

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