The Overseas Situation Report Tuesday 12 October 2021
– By Mike Evans
“Wine makes every meal an occasion every table more elegant and everyday more civilized”
Author Unknown
As the world starts to recover from the Global Pandemic this report tells of one aspect of Portuguese culture that tourists have been sampling since well before the pandemic and how the government and producers are working together to build a sustainable future post covid. We are talking about the amazing wines and their impact on tourism to Portugal.
Last month The World Tourism Organization (UNWTO), Visit Portugal and the city of Reguengos de Monsaraz organized the 5th UNWTO Global Conference on Wine Tourism on 8-10 September 2021 in Reguengos de Monsaraz (Alentejo), Portugal.
Held under the theme ‘Wine Tourism – a driver for rural development’, the Conference focused on the contribution of wine tourism to social and economic regional integration and its great potential to generate development opportunities in remote rural destinations.
Building on UNWTO’s work on advancing tourism at the centre of plans for recovery, the Conference represented a unique opportunity for experts from across the growing field of wine tourism to work together to find concrete solutions to build back better and make tourism an enabler of the way forward towards a more sustainable, inclusive and resilient future for rural communities.
Speaking at the event, The Secretary of State for Tourism, Rita Marques, highlighted that “10% of those who have visited Portugal in recent years have chosen the country for reasons associated with wine”, according to the newspaper Diário Alentejo.
The Government is “working very focused” on wine tourism “since 2019 and we can already say that 10% of those who visited Portugal in recent years, before the pandemic, came exclusively with reasons associated with wine”, said Rita Marques.
Portugal is “one of the few European countries” that has “an action plan” aimed at wine tourism and betting and investing in this sector “is a path” that the country is “treading”, highlighted the Secretary of State, in Monsaraz.
The conference theme was how to rebuild the market post Covid 19 and a number of initiatives were put forward to help the growers increase sales and have a greater exposure to the world markets. Ideas for a new beginning were:
- Open air, smaller known groups, encourage more individual tourism.
- New markets : domestic, promoted in the region as well as across the country.
- Smaller groups, higher spending
- Bookings – better planning, better experience
- Online wine activities as a complement to stay working in tandem with hotels.
The Secretary of State for Tourism recalled that the national action plan for wine tourism has “four major dimensions”, starting with the ‘terroir’, that is, “for working the territories with the 14 wine committees, distributed over seven regions”.
“Then, working on the quality product, as it presents itself, as it is, can be well appreciated by the tourist”, adding that “the training and qualification of people is very important”, as well as “the promotion and continuous addition to the value chain.” And sustainability, a matter in which tourism “has played an important role, because it has assumed a very strong leadership”, must “be part of the DNA” in Portugal, defended Rita Marques.
“Many” of the 14 Portuguese wine regions develop their activity in rural and inland territories, and the Secretary of State warned that, as a result of the covid-19 pandemic, wine tourism in these regions could benefit. “The reasons for travelling have changed slightly, we are all looking for places where we can be a little more isolated from the hustle and bustle of the cities”, and there is “a greater appetite for tasting local products, whether food or wine”.
And it is necessary to “provide products, but also experiences and diversity” to visitors, because Portugal has to ensure that visitors can “stay longer”, that is, in addition to the average “2.7 nights” stay, to “ guarantee more economic value”.
As the biggest consumers of wine per capita globally, it might be expected that domestic sales of Portuguese wines would have fared well over the course of the pandemic, where drinkers globally were largely turned onto local vinous offerings.
In Portugal however, domestic consumption only forms half the picture.
While the Portuguese undoubtedly consume more than their fair share of wine, (on average, 55 litres annually for each of the country’s 10 million people), a large proportion of those sales come from tourists from countries like the UK. With the pandemic grounding planes everywhere, this has shifted the balance of sales abroad.
“We ended the year with a roughly 25% decrease in domestic wine consumption,” Frederico Falcão, president of Wines of Portugal.“Regarding our exports, we were one of only two countries globally that managed to grow in both volume and value: Portugal and New Zealand. There was a decrease in world wine trade, but Portugal managed to grow in value for our exports. Consumption was lower in Portugal, but we managed to export more.”
He said that Portugal exported a total of €846m in 2020, a 3% uplift on 2019 when sales reached €818m.
A significant proportion of this shift came from Portugal’s’ number three export market in value, the UK, where sales rose 16% in 2020.
Falcão puts this down to greater risk-taking among Brits, who displayed a willingness to convert on-trade spend to more adventurous off-trade purchases.
“Because of the lockdown of restaurants, people started to drink more wine at home, and they were buying wines with a bit more value. Usually, in restaurants, consumers don’t take many risks because the wines are expensive. But if they’re buying in an independent store or supermarket and they are willing to risk more, they find Portuguese wines are very good value for money,” he said.
When it comes to Port, Portugal has an interesting relationship with France, the US and the UK, it’s top three export markets by value.
For the past six years in the UK, sales of Port in these markets have been stable with a very slight increase of 0.1% in value. The share of Port however, is decreasing.
“Six years ago it was 68%, whereas in 2020, Port represented 52%. Table wines are increasing a lot,” said Falcão.
France remains Portugal’s number one export market, predominantly due to large amount of Port usually consumed in the country. Last year saw a significant dip because of the loss of the on-trade.
“Portuguese wines saw a huge increase in almost all countries except for France last year (because of Port) and also Angola. There is a problem with the economy in Angola these days. But France remains the biggest export market for Port in volume. The loss of the on-trade meant sales in 2020 dipped a lot.”
He added that France over-indexes at the entry level for Port. It’s an everyday drinking wine, whereas premium trends have greater weight in the US and UK.
“The Portuguese also don’t drink a lot of Port,” he said – a fact which was laid bare last year as consumption dipped significantly in the country.
Many of the trends which have become popular in the UK in recent years – for example Port & Tonic – originated in the bars and restaurants of Porto. While this was a domestically driven trend, Falcão said, it is not a traditional drink, and was created largely with tourists in mind.
It’s far more popular on the export market, where trends such as rosé Port are driving buy-in and excitement.
“My guess is that the premium categories of Port will go on for a long time. The future will be mixology like Port & Tonic, because the younger generation doesn’t like to drink those styles of wines, not just Port, but other fortified styles. Drinks like Port & Tonic are an excellent solution to keep Port sales going,” he said.
All of this leads us to believe that Portugal has a great chance to see their wine and tourism businesses move forward to greater things as we leave behind the fears of Covid 19.
Until the next time, Stay Safe.
Total Cases Worldwide – 238,761,035
Total Deaths Worldwide – 4,869,694
Total Recovered Worldwide – 215,938,873
Total Active Cases Worldwide – 17,952,468 (7.5 % of the total cases)
Total Closed Cases Worldwide – 220,808,567
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