The latest Portugal Wine Landscapes 2021 shows that despite on-trade closures and the lack of tourists, the wine industry in Portugal still had some winners in terms of premiumisation and increased wine drinking occasions throughout 2020
2020, a year of pandemic and lockdown, brought enormous challenges to the Portuguese wine industry as it went through a difficult period of adaptation. Had it been a normal year, the contents of the latest Portugal Wine Landscapes 2021 would have been different – but maybe not as much as you would expect.
As in Spain, tourists vanished and the on-trade closed twice, significantly decreasing the overall volume of wine being sold in that channel. However, just as in Spain, we can see some interesting silver linings when we focus on how Portuguese consumers reacted to COVID, which may assist in the market’s recovery during 2021.
In last year’s report (Portugal Wine Landscapes 2020), premiumisation was one of the key highlights. Portuguese regular wine drinkers were drinking more expensive wines. This has not been interrupted by the pandemic – instead, it has been fuelled, with consumers now stating higher spending across many occasions analysed in this study, both at-home and when they are able to be in restaurants and bars.
Last year’s report also highlighted how the global moderation trend was evolving quickly in Portugal. Consumers wanted to moderate their consumption and were focused on their health and wellbeing. As in many other markets, this moderation trend reversed in 2020. The wine drinking population now contains more weekly drinkers and fewer monthly wine drinkers in 2021, and consumers are saying they are drinking more wine than other types of beverages – all good signs for the Portuguese wine industry.
Lockdowns have also provided more moments for wine drinking, which we have seen across the globe, as wine has been a little luxury to treat oneself to when other indulgent or aspirational options such as going out or travel were severely limited. Portuguese regular wine consumers are no exception, drinking wine across more occasions now than a year ago, be it wine that was already in the cellar or wine that was bought, and from a broader range of channels. The consumer research data also suggests that the biggest growth in wine consumption came from younger consumers – those in the 18-34 and 35-49 year old age brackets (see chart, below).
Convenience channels were naturally preferred as consumers want to spend less time in store. The online sales channels became particularly relevant, accelerating significantly from a small base. But it was the online communication channels that saw the real revolution with marketing teams across the country shifting their communication and targeting strategies in a fantastic way.
Finally, there are some Covid-19 winners we would like to highlight:
ROUTES TO MARKET
- The retailer Continente: This was the number 1 retailer in Portugal already and it reinforced its strength significantly amongst Portuguese regular wine drinkers in a year of Covid-19 pandemic, increasing its lead ahead of number 2 Pingo Doce
- The retailer Mercadona: The Spanish-owned giant retailer is still on its first stages in the Portuguese market but managed, from a small base, to become significantly more relevant amongst regular wine drinkers who are now using it more to buy wine. We believe Mercadona will become more and more relevant in the upcoming years as new stores open
- Wines from Trás-os-montes: This is one the most unknown wine regions in Portugal. It is also one of the furthest and inaccessible for Portuguese wine drinkers, yet it managed to increase its awareness amongst consumers significantly, from a small base, in a very unlikely year
- Wines from Algarve: Algarve is one of the most famous regions in Portugal. Not because of its wine necessarily, but because of its popularity as a tourist destination. There has been investment in viniculture in the southernmost region of Portugal which is getting more popular amongst consumers. We see quite a lot of potential for wine to capitalize on its high international awareness
- The grape varietal Sauvignon Blanc: Portugal is not a country of grape varietals – consumers will rather choose their wine based on which region it is from. But the international success of Sauvignon Blanc is reaching the Portuguese consumer and several Portuguese wine producers are now producing more Sauvignon Blanc wines, particularly from regions near the Atlantic Ocean (eg Lisbon)
- The brands (in no specific order) Papa Figos, Esteva, Monte da Ravasqueira, Assobio, Fiuza, JP, Cabriz, Carm, Pouca Roupa, Esporão, Defesa, Altano, JMF, Casa de Santar and Trinca Bolotas have seen positive results in becoming more relevant for consumers be it in terms of higher awareness, purchase, consideration, affinity or recommendation.