Bright Outlook Port Side

10 January, 2014

For now, and perhaps ever more, France will be king of volume and, almost consequently, value. “France needs to grow through quality, not volume, which will be a hard transition,” says Marello. “For way too long port has been low price and low margin. It’s a challenge. Even if you increase prices to reflect the costs, it’s not enough. You have to make port a premium product. It’s not associated as a luxury item on the whole. 

“The shift must be achieved through education first of all. Once people understand the price they have to have premium at that price.”

Certainly the signs are that port is growing out of its volume period into an era where value sales are the priority. The average price of a bottle today is €4.57, which is up from €4.37 in 2012 and Ä4.23 in 2009 (IVDP). 

Paul Symington sums up the situation quite neatly: “I believe the days of cheap port excessively discounted are numbered. The companies that specialised in this area are nearly all gone. Even more important, trade stocks are hugely reduced. Cheap port is unaffordable for farmers and producers.”

But there is another view worthy of mention. “We must see the reality of the market. We try to move consumers to the reserve and special categories but we also have the quantity that the market needs,” says Porto Cruz’s Dias. 

“Volumes provide the cash flow for winemakers, which is very important. So it’s not just a question of value it’s a question of volume too. 

“There is only a 15% difference between the highest and lowest price for about 95% of port volumes across all the brands. 

“Supermarket brands are important for the cash flow of all the companies. For the sustainability of the market we must see the volume of port wine. We depend on the wine growers and they depend on the volume.”

Both arguments seem plausible enough and, while Porto Cruz deals in volumes in France, its over-arching strategy is “to give each market what it wants”. So flanking its core offering of entry-level ports is the on-trade brand Dalva and a push in travel retail with higher-end vintages, bottled-matured LBVs and Colheitas. 

The temptation is to say that port cannot continue to operate with two images – especially if it wants to still be seen as a luxury wine. But this is nothing new – look at Bordeaux, an exemplar, if ever there was one, of the quality/quantity tightrope act.  

So for the time being port will take its divergent paths, all the way knowing that the volume course will continue to narrow. All the way hoping that the revenue stream will widen.





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