Cracking the Portuguese code

27 March, 2009

The country's tongue-twisting wine names maybe hard to decipher, but they offer a USP for independents. Are producers anglicising brands enough to tempt the average UK consumer, asks Richard Woodard

Being the "next big thing" in the wine world can be both a blessing and a curse. For years, wine writers banged on about the neglected charms of German Riesling and


sherry to no tangible effect - proving that simply wanting a category to succeed isn't enough to turn that trade buzz into cash in the till.

So it has proved with Portuguese table wines. Loved by journalists, sommeliers and the trade in general for its distinctive, food-friendly reds and

increasingly impressive whites, the country has nonetheless struggled to acquire critical mass in UK retail, overshadowed by its Mediterranean neighbours Italy and Spain.

And yet Portugal boasts an

incredible variety of indigenous grapes, soils and wine styles. There's

the zingy acidity of Vinho Verde,

the savoury richness of a Douro blend, and

the southern warmth of the Alentejo - all offering consumer-friendly, soft, fruit-forward wines that combine New World approachability with

European distinction.

Front-line allies

To bring this array of wines to market, Portugal now has a solid grouping of market-savvy importers on its side, including Oakley Wine Agencies, 10 International, Raymond Reynolds, Casa Leal and Castas, as well as a rejuvenated, consumer-relevant generic campaign under the aegis of Judy Kendrick and JK Marketing.

So could 2009 be the year that Portugal grows up as a category in UK retail? The answer is yes, but with some reservations. There are


at the coalface of the market that some of that trade adulation is filtering through to the consumer - but that doesn't mean blends of Touriga Nacional and Trincadeira will suddenly flood the supermarkets.

The most startling grounds for optimism among Portuguese producers was provided in

OLN just last month. Asked where they expected the biggest growth to come from this year, independent wine retailers ranked Portugal joint third alongside New Zealand and Argentina, and only behind South Africa and Chile.

For those who have been preaching the Portuguese gospel for years , that's welcome news. "Portugal has always been the thing that's going to happen next year, so it's quite nice to see increases in customer pull-through," says Nick Oakley, of Oakley Wine Agencies, whose Tagus Creek has led the charge of multiple-friendly, modern Portuguese wine brands.

"I've always felt that Portugal had so much to offer, but was aware of the small share of the market," adds Bill Rolfe of 10 International, whose burgeoning roster of Portuguese brands now includes Pink Elephant, Point West and, soon, Storks Landing. "But I've stuck in there ever since I was the Portuguese wine buyer at Unwins. I never forgot about Portugal."


OLN's survey implies, if the patience of Oakley, Rolfe and others is beginning to earn its reward, it's got more to do with the independent

sector rather than the multiples.

Baffling case

That should come as no surprise: Portugal's most lauded wines are typically blends of distinctive native grape varieties with indecipherable names - wines, in other words, with a considerable fear factor attached to them.

"Even I get confused," admits Tesco buyer James Griswood. "I don't know some of the grape varieties and how they're going to taste. For a customer browsing a shelf of Portuguese wines with all its strange grape names, brand names and regional names, it's a real put-off."

But it can also be a godsend for an independent

looking for something different to offer open-minded customers. A merchant

such as the Halifax Wine Company, for instance. " The indigenous grapes are Portugal's major strength," says owner Andy Paterson. "Portugal has a real route to offer some excitement there and a real point of difference. If they start flogging Chardonnay and Syrah, then they're just fighting with the crowd."

It's a fact increasingly recognised by producers and generic bodies too. For Paulo Pinto, marketing director at Douro wines body the IVDP, the region's wines are all about the art of blending a palette of different grapes into a harmonious whole. "Consumers can find Cabernet from Chile, Napa or South Australia, but Douro wines are unique," he says.

Multiple choice

It's not that multiple retailers are

blind to the charms of Touriga Nacional, Baga and Alvarinho - they just don't think they should have a high consumer profile. "They are a real strength as customers do sometimes want to break away from the same old classic varieties," says Majestic buyer Camilla Bordewich.

"However, the names of many of the grapes are a weakness as they are unknown, unpronounceable and vary from region to region. Communicating regional names, or simplifying the names of the grape varieties, might help customer recognition."

Other buyers - including Griswood, Waitrose's Nick Room and Arabella Woodrow MW of Morrisons - share Bordewich's opinion.

But if Portugal has under-achieved in multiple s in recent years, it's not so much about obscure grape varieties - it's about branding. With one obvious exception, Mateus, the country's record here is less than impressive.

Mateus' achievement is all the more impressive in that it has become one of wine's most recognised brands without losing its national identity - up to two-thirds of its consumers know where it comes from, according to distributor First Drinks Brands.

But the

new wave of Portuguese wine brands is more apt to follow the recent

success of Tagus Creek. Pink Elephant, Point West and, coming soon, Storks Landing and Sextant, aim to mingle Portuguese character with New World branding cues - anglicised names, indigenous and international grape varieties.

It's clearly a lot closer to what the mass market requires, but it's still not for everybody.

"Mateus was very clearly a Portuguese product, whereas many of the recent brand launches have almost hidden the fact that the wines are from Portugal, which is a shame,"

says Bordewich. "Very few of these brands are aimed at our customer base."

It's a

case of catch-22: trumpet uniquely Portuguese credentials to the consumer and you risk losing them; make your product too similar to the crowd and you're more easily replaced by a cheaper alternative.

So what's the future? In theory, there's nothing to stop Portugal pursuing a twin-track strategy - pushing new-wave brands to the multiples, while targeting higher-end, distinctive and regional wines to independents and the on-trade.

"It's down to the Portuguese and what they want," says Griswood. "Do they want to target just wine enthusiasts? That's fine, but if they want to grow their market share and become a bigger player, then they're going to have to become more brand-heavy and easily accessible as a category."

Portugal: the brands

Tagus Creek: Consistently cited by buyers as the benchmark modern Portuguese wine brand, this ticks all the boxes: easily pronounceable name, blend of indigenous and international grape varieties, realistic pricing and sound retailer support.

"Attempting to simplify the message of Portuguese wines has been my aim over the years - an English language brand, a combination of international and native varieties," says Nick Oakley, of Oakley Wine Agencies.

Pink Elephant: Aimed to show there is life for Portuguese rosé beyond Mateus, with some success. The brand

has established a winning position as a match for spicy foods, and has shown a willingness to explore more innovative marketing techniques beyond mere discounting, such as a holiday competition to tie in with its new listing at Tesco.

"The success we've had with Pink Elephant has convinced me that there is so much more potential with Portugal as a whole," says Bill Rolfe, of 10 International.

Point West: Another 10 International brand, following the Tagus Creek template in using an anglicised name referring to the coastal location of winemaker José Neiva's vineyards in Estremadura. Initially a straight Touriga Nacional red, but shortly to be supplemented by an Alvarinho/Chardonnay blended white, plus a rosé.

"We start out with the consumer and tell José what the consumer is looking for - not the other way around,"

says Rolfe .

Mateus: Still top dog, despite being a venerable 67 years old

this year. Recent packaging revamps have modernised that iconic bottle shape, while innovations have included the successful introduction of a sparkling rosé last year .

However, the core product has been slightly weakened by cheaper own-label copies. "It has to be traded differently because it's a proper FMCG product

," says Anthony Habert, senior brand manager at First Drinks Brands.

Retailer profile: the Halifax Wine Company

Established by Andy Paterson eight years ago, the Halifax Wine Company has grown its business 20% year-on-year. It has also scooped

no fewer than eight International Wine Challenge merchant awards since 2004 and

it took the Independent Wine Merchant Award in this year's Annual Portuguese Wine Awards.

Portugal has grown to account for about 16% of turnover, with a minimum of 60-80 wines on

its list, plus a selection of ports. "There's obviously enough people out there that are interested and keep coming back," says Paterson. "But it's got to be customer-led and we've got to be enthusiastic and talk customers through the wines."

Portugal's strengths, he believes, lie in the £5.99-£10 price bracket, and in its

collection of native grape varieties and

regions. But he appreciates that educating consumers about the country's

charms can be time-consuming.

"We started by promoting Alentejo first," Paterson recalls. " I was trying to win people over from the New World or from Italy and Spain, and they have that nice warmth to them and are nicely rounded. That's a great introduction, and then you can move on to the Douro and more scary stuff like Bairrada and Dão."

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