No-one is indispensable, as Andre Villas-Boas the manager of Chelsea football team discovered this week, after a series of lost games led to his dismissal by the team’s owner, Roman Abramovich. Underperforming wine regions and indeed entire countries can suffer a similar fate, and coincidentally, Portugal is facing a similar removal from the scene – or at least from the shelves of Majestic, the UK’s leading specialist wine retailer.

Portuguese wines, though gloriously popular with British critics and sommeliers, have failed to catch the public imagination. Like other generic organisations, ViniPortugal tried to remedy this by giving retailers money to fund promotional campaigns, but a recent change in policy has led it to withdraw this funding in order to use the cash elsewhere. Majestic, has reacted rather interestingly by writing to the suppliers of its Portuguese wines requesting that they provide compensation for its loss. Failure to do so, it was apparently suggested, might lead to the delisting of the entire category.

Not surprisingly, the Portuguese producers at Prowein who heard about this move felt highly affronted. How dare Majestic treat us like this? they asked, forgetting that retailers are entirely free to decide what they do and do not want to sell. Few appreciated my blunt analysis: if Portugal is not on Majestic’s must-stock list, there’s no-one to blame except the Portuguese winemakers. If the marketing contribution provides such a large reason for the chain to list these wines, they clearly aren’t doing something right. In simple terms, if customers were coming into the stores in sufficient numbers asking to buy Portuguese wines, there is no way that Majestic would dream of removing the bottles from its stores.

In the same week that I heard this story, the Bordeaux-based winemaker, Francois Lurton, announced that he was going to give up his share in a Portuguese wine venture, citing poor sales as his reason. These two stories are not unconnected. I happen to share the sommeliers’ and critics enthusiasm for Portugal’s best wines, but I also understand the need for effective branding, marketing and distribution – three grubby words whose importance is sadly underappreciated by the Portuguese producers and their fans.

  1. Interesting – our Portuguese sales have increased by around 160% (note 'by' and not 'to') and many of those are packaged brilliantly and are not expensive and have been branded well. But production is small, and they (and their agent) have no interest in multiple retailers (which given their size is a good and worthwhile thing)

    And I think that this is the thing, many of the wines made are not made in sufficient quantity to service the multiple trade. Most of the stats we get for Portugal come from Nielsen – these are largely based on supermakets and multiples. Nielsen stats will tell you that Portuguese wine sales are flat – but talk to Portuguese customs about the amount of wine exported to the UK and the figure changes to a vast increase. That tells us that the independent trade is doing very well with Portugal but that the supermarkets and majestic are not doing as well. Part of that must come down to range – a quick look in the supermarkets a couple of years ago revealed Mateus in different formats, and own label version and a Vinho Verde costing £4 a bottle and in a similar shaped bottle.
    Tesco to their credit has worked with Nick Oakley to get an more interesting o/l Portuguese range, and Nick has also brought the Tagus Creek/Ridge label to the UK supermarket scene – I confess I haven't tried the wines but at least someone has done it.

    But then that leaves Majestic – the brands that there are, are in the supermarkets. Many other wines don't want to be in Majestic, that seriously limits the range when production is small and fragmented anyway.

    The people who ought to be looking more at this are the likes of Sogrape and Bacalhoa both of whom are big enough to do damage.

  2. Robert, as you will know we recently took on the responsibility for delivering Wines of Portugal’s marketing plan in the UK. It is true that Wines of Portugal has made a policy decision to direct it’s promotional spend away from templated retailer marketing support, and into direct retail activity and consumer engagement through the Discover a World of Difference campaign. Such support has already been offered to Majestic and will be offered to dozens of other retailers over the coming months. The desired response to this activity is indeed the customer going into stores and asking to buy Portuguese wines. The new Wines of Portugal management fully understands the need for effective branding, marketing and distribution and is working hard to bring this to bear on the UK market as soon as possible. Kind regards, Chris Mitchell

  3. Tim, Chris, thank you for your responses which include several very valid points. I should perhaps clarify my comment about branding. In one respect, Portugal has made quantum leaps in its understanding of branding and packaging – just look at the new wave labels – but paradoxically this is actually part of the problem. There are simply far too many labels and brands – as was obvious at Prowein. Portugal needs a critical mass of wines that convey a consistent message, of brand and grape. Ironically, given the lead that was taken in the 1940s with brands like Mateus and Lancer (and subsequently Gatao) the bigger Portuguese companies have woefully failed in this respect (it is revealing that Tagus Creek was created by a Brit. I wonder whether they have not been over-focused on impressing those critics and sommeliers, at the expense of building a franchise with ordinary consumers. A few years ago Poprtugal was way ahead of Argentina in markets like the UK; today, it's slipping behind…

  4. We invented the Tagus Creek brand because of the frustrations of winning listings with enthusiastic buyers from the major multiples, only to be disappointed by a quick de-list as the wines failed to move from the shelf 'Sticky bottoms' and 'nailed to the shelf' were two commonly used expressions not that long ago. Happily the Tagus Creek wine has proved to be a success, not only through branding but also by blending with a known international variety, and the involvement of internationally known wine-making consultants.
    That aside, I think that Portugal has one fundamental problem, enshrined within its labelling laws, which do not permit wines to be sold by regional identity. That is to say a Dao wine cannot sell itself simply as a Dao – it must be overwhelmed by a brand name, which must be writ larger than the word Dao. How ridiculous is that? France is an entire nation that sels its wine on a regional message. Chablis, Cotes du Rhone, Bordeaux, Burgundy and all its appellations. You have to look hard to find the producers name, so it's the region / appellation that becomes famous. This can never happen in Portugal and it is an absurdity that I point out with depressing regularity but nothing gets done. A voice in the wilderness.
    But all is no doom and gloom. sales of Portuguese wines for us were up 400% last year, and the stallholders at Prowein were very upbeat at the sudden increased level of interest from purchasers in ALL markets.

  5. Thanks Nick. And good to hear that you are doing so well. The only fundamental disagreement between us is over your comment about regional identity. While I am all for allowing producers the freedom to label their wine in any way they like (within reason), I see no reason to believe that increased regionality is the answer. Our (DoILikeIt?) research reveals that consumer knowledge of wine regions is very weak. Spain has spent huge sums on promoting its wine regions; Rioja is the only one with resonance. Argentina has not focused on selling Mendoza: it has all been brand + Malbec.

  6. Well yes I can see the argument about Rioja, nevertheless Italy has Chianti, Frascati,Valpolicella, Soave and so on. Add this to the regional identities of France and one can see that the Old World relies on regionality more than the New World. Indeed the new world is desperately trying to embrace regionality to add value to their offer. In Portugal virtually all DOs are made from blends of grapes which perhaps makes the regional style hard to pin down. An 'Alentejo red' could be anything, and from a wide palette of grapes. Nevertheless there is a regional style that could become well known

  7. I'd respond with a golfing analogy. Golfers know to use different clubs for different situations. Regions certainly have a value, but I'd argue that's it's a far smaller value than the wine industry supposes – at under £7, the sector in which most wine is sold. As I say, huge sums have been spent on promoting European regions, but the success stories have been examples like Pinot Grigio and Merlot. Few consumers know any Spanish regions outside Rioja and many apparently think that's a grape. Gruner Veltliner and Malbec are successes too.

    The fact that the New World is embracing regionality does not make it the right thing to do. It's often more a matter of playing to their home markets (where some at least of the regions have resonance) or a cultural cringe.

    It's no accident that brands like First Cape, Blossom Hill, Lindemans and Ogio with no single country behind them are all doing well – nor that France felt the necessity to create a Vin de France designation. Camp Viejo has enjoyed better sales growth than Rioja.

    Consumers like brands. Easily pronouncable, memorable brands. Alentejo fits neither criteria.

  8. In fact, though, they're right. Portugal has had HUGE support from sommeliers and critics. The problem, as I've said, is that this has not trickled through sufficiently to the average Majestic customer for him or her to be specifically requesting Portuguese wine.

  9. But Majestic's range of Portuguese wines has grown from 11 to 14 in two years and sales are up more than 20% on the previous year, so Portugal is a success story for them…this threat to delist over a relatively small generic promotional spend seems a bit petty

  10. Success is relative Jamie. It's a bit like looking back on a date and thinking “we had a nice time” if they don't call up to fix another one, the time obviously wasn't quite nice enough. Majestic is in business to keep its customers and shareholders happy; it isn't working for any group of winemakers. As you say, they built the range and saw an increase in sales, but from a low base.
    The key question to consider is whether Majestic could have taken the same line on Argentina. I'm pretty sure they couldn't because enough people are coming into the shops asking for Malbec for it to be missed. Noone could claim that this is the case for Portugal. Yet. Which is why generic effort can be so valuable.
    But even the most clever generic promotion relies on there being a message consumers ” get”

  11. I think there have been many valid comments made about Portuguese wines in the UK and the export market in general but I would make some observations.
    Portuguese wines have been selling /trying to sell through the multiples since I became involved in Portugal in the early 80s and basically nothing has changed, no consumer loyalty and only selling on promotion. A critical mass/ presence has been never achieved. Now the independents/Horeca trade is a different story, Portuguese wine is growing very well and creating interest with consumers not just sommeliers and journalists which I can confirm with my Terra D’Alter wines and those of my fellow producers. I think after a significant period of growth in this sector Portuguese wines may be capable of returning to the major retail sector. The big question is what is the image and direction of Portuguese wines that we should take, and it really comes down to varieties vs regions. All the success of wines over the last three decades has been based on varieties or regions based on 1 or 2 varieties in a consistent style/blend. Unfortunately starter wines from Portugal are based on regions with blends that vary from producer to producer. Ah people will say that is what makes Portugal interesting but that runs against 3 decades of consumer history in the “new” wine consuming nations. It is a simple observation that most starter wines are varietal, why is it that way? Consumers may not be able to tell what side of the hill the wine came from but they know what they like and it is varietally based. Portugal has some wonderful grape varieties we just need to put them front of the consumer in a consistent and attractive way.

  12. Peter, I agree with you 100%. KISS: Keep It Simple Stupid. “Consumers may not be able to tell what side of the hill the wine came from but they know what they like and it is varietally based”

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