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Portuguese Wines Rise In U.S. As Domestic Market Struggles

July 23, 2013

With Portugal’s domestic wine market challenged by the country’s ongoing economic crisis, Portuguese winemakers have been casting their sights abroad—and finding solid growth in export markets like the U.S. According to Impact Databank, Portugal’s bottled table wine shipments to the U.S. have increased by roughly one-third since 2006, rising 3.4% to 1 million cases last year.

One Portuguese player, Alentejo-based Esporão, has been intensifying its efforts in the U.S. lately. The company—whose wines are imported by Aidil Wines in the East and Vinum Importing in the West—opened 10 new U.S. markets this year and is now in 40 states. In particular, its entry into California and a placement of its Monte Velho red ($11 a 750-ml.) at Whole Foods have helped grow U.S. volume by 13% year-to-date through June, says global sales director Diogo Melo e Castro. In addition to Monte Velho, Esporão’s brand portfolio also includes Alandra ($8) and Esporão Reserva ($15) and sells around 60,000 cases in the U.S. annually.

“Portugal is progressing from being seen as an exotic wine region to a more serious part of the market,” says Castro. “We want to speed that development.” In prior years, Esporão exported around one-third of its 1.3-million-case production; now, owing to Portugal’s economic difficulties and a sharper focus on exports, the company sends about two-thirds of production abroad.

Leading Portuguese winemaker Sogrape is also rapidly expanding its U.S. business—both through its own Evaton Inc. unit and Pernod Ricard USA, which markets its Sandeman Ports. Evaton, based in Connecticut, handles Sogrape’s Gazela, Mateus and Grão Vasco brands from Portugal (its portfolio also includes non-Portuguese Sogrape labels like Finca Flichman and agency brands like Ramazzotti). Gazela, specializing in Vinho Verde at under $10 a bottle, was up 9% to 95,000 cases in the U.S. last year, and has more than tripled since 2006.

“Gazela is developing well, and we’re convinced it will continue to grow,” says Júlio Martins, Sogrape’s international sales and marketing director. “We think the brand and the light Vinho Verde style fit perfectly with the U.S. consumer.” On the Port side, Sogrape has been working with Pernod to premiumize Sandeman and extend its reach into new audiences and consumption occasions, like cocktails.

“We’ve been seeding for years, and Portuguese wines are now seeing positive signs at the consumer level,” Martins says. “It’s encouraging, but there’s still more work to do.”

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