Vintage Port - Quo vadis?

[Axel P]

I think everyone thought it cannot get more complicated than with 2015-2016-2017, but now 2018 is getting bottled and we have some who do not bottle, some who bottle Single Quinta, some full and some - at least - one major shipper to do both (for the first time ever?).

Although many other wine regions do the same thing and bottle every year and sell - even without the differentiation between full house and Single Quinta, I would like to start a conversation to hear what you guys think on the current development in Vintage Port?

Until 2011* we had only one good year every other year. Were these the "good old days" for Vintage Port or is it better nowadays?



*Except back-to-back and 2009

[jdaw1]

We’ve had a run of good years. The shippers have done the correct thing — they’ve made good Port. If the run continues, well, excellent. If it doesn’t, then there will be a pause.

Or it can be blamed on Port Vintages. They saw the book and thought “This is too complicated; we must do something easier.” And are. Well.

[JacobH]

I do think that all of the technological developments over the last 30 years must be paying of in terms of producing more vintage quality port in secondary years. Otherwise, why bother with them?

This could also be assisted with either a lucky run of years or climate change is producing better conditions for Port. I guess we will have to wait for a while to understand which of them it is.

I also wonder if there is a willingness to put out smaller quantities of VP. Some of the 2018 releases seem tiny (e.g. 510 cases from Dow SdR). I wonder if, in the past, they might have been used for something else but now there is a feeling that if some VP can be produced, even a very small amount, it should be. Certainly you can see the economic sense in doing that since VP will provide the highest and shortest returns of any Port.

I also think the 2018 Dow SdR is quite interesting since this was historically a secondary wine but is being priced and marketed as a proper VP. I would really like to know who the target market is. I wonder if they are either trying to attraction collectors / completionists or are trying to shake away the idea that a single vineyard wine is a secondary product (since, of course, that is a very unusual and Port-specific concept).

As always, we shall have to wait and see!

[winesecretary]

I do not think we should discount the impact of (i) even the most rudimentary training in winery hygiene; (ii) the reliable availability of reasonable quality fortification spirit; (iii) ways of monitoring grape ripeness that do not require either a degree in chemistry and a laboratory, or forty years of testing it on the palate, to administer; and (iv) global warming. The first three, other than for the very best wines, are relatively recent events. The fourth has simply coincided. As a result of these advances there is, simply, more good port being made every year. Some of that deserves to be declared as VP. Whether it is wonderful port that will age superbly for half a century is another matter; certainly Bordeaux lost part of its character when it started harvesting only ripe grapes and instead made Parkeresque bonbons, because it was the unripe grapes in the mix that gave it the breed. I have had a number of 2nd to 5th growths from, e.g. 2000 that are already falling over. I do worry whether some ports have gone the same way, like the Croft 2016. But I have no worries about the Fonseca or Graham of the same vintage...

[Andy Velebil]

I have a question first; What is the approximate percentage of total bottles that a typical producers retains after a release of a VP or SQVP?
Is it 10%, 20%, more, less?

[JacobH]

Whether it is wonderful port that will age superbly for half a century is another matter; certainly Bordeaux lost part of its character when it started harvesting only ripe grapes and instead made Parkeresque bonbons, because it was the unripe grapes in the mix that gave it the breed. I have had a number of 2nd to 5th growths from, e.g. 2000 that are already falling over. I do worry whether some ports have gone the same way, like the Croft 2016. But I have no worries about the Fonseca or Graham of the same vintage...

I don’t think Port has been influenced by the views of critics so much as mainstream wines like claret and I get the sense that what the winemakers are aiming for in almost every category is not dis-similar to what their predecessors were aiming for in the past. (Incidentally, based on what Robert Parker is said to like, I’ve never quite understood why he didn’t just drink Port instead but that’s another issue!).

As for whether Port lacks the backbone these days, I sometimes wonder if that is a discussion which has always been had amongst Port drinkers? I also wonder whether the shippers realise that it might be possible to go too far. For example, something like the Dow 1980 is likely to take so long to mature that either a) all of it will be drunk before then; or b) by the time the tannins weaken all the fruit will be gone...

[Axel P]

I have a question first; What is the approximate percentage of total bottles that a typical producers retains after a release of a VP or SQVP?
Is it 10%, 20%, more, less?

Fantastic question. I do not think that many of the producers have a plan to have different badges of selling their Ports. With most I believe that they sell everything the market is willing to accept.

Will aks some at the next meeting.

[Andy Velebil]

I have a question first; What is the approximate percentage of total bottles that a typical producers retains after a release of a VP or SQVP?
Is it 10%, 20%, more, less?

Fantastic question. I do not think that many of the producers have a plan to have different badges of selling their Ports. With most I believe that they sell everything the market is willing to accept.

Will aks some at the next meeting.

Generally, producers keep some bottles back for tastings, events, replacement, etc. I'm sure it changes based on the size of the vintage, how it scores, room to store them, etc. so just curious what an average or range of amount retained would be. Do let me know what you find out.

[uncle tom]

The history of the port trade, and in particular during the past half century, has been that when new ideas are embraced too quickly, the producers eventually come to regret it.

My feeling is that comparisons of the prices of vintage port and classed growth claret have become not just frequent, but obsessive, amongst the port producers in recent years. They yearn to be 'up there' and this is distracting them from a more pragmatic analysis of market dynamics. This obsession is also fuelling the notion that if claret can make a class wine every year, why can't they?

Price vs. consumption of wine is massively exponential at every level. Increase the price, and consumption plummets. To try to support their agenda of claret equivalence, the port producers have dramatically reduced their declaration volumes in recent years, to try to support their pricing, but this is clearly self destructive.

After all the one-off expenses are accounted for, the cost of producing an extra bottle of vintage port is typically around five euros.

I have said this before, but I'll say it again: If the volume of vintage port production was trebled, but the price halved, the producers would find it both easier to sell, and realise a greater profit.

[JacobH]

Price vs. consumption of wine is massively exponential at every level. Increase the price, and consumption plummets. To try to support their agenda of claret equivalence, the port producers have dramatically reduced their declaration volumes in recent years, to try to support their pricing, but this is clearly self destructive.

This is a really interesting post. I hadn’t realised that this had happened, beyond the fluctuating changes in popularity of shippers (e.g. I think Sandeman used to bottle a small sea’s worth of VP but is now making much less). When you say “recent years” what sort of time-frame are you referring to?

I am also surprised they are bottling less since you could create an artificial scarcity by reducing the amounts available en primeur whilst still bottling more. The difference could then be held in reserve to be released later at a higher price.

The other issue which Tom’s post makes me think about is the interaction of smaller branders and secondary labels. For example, if the Symingtons are producing first-rate vintage port from Graham, Dow, Warre, Cockburn and Vesuvio, plus super-premium Ports from Graham and Vesuvio, and SQVP from effectively all of them; where does that leave Smith Woodhouse, Quarles Harris and Martinez?

I guess the space that those shippers (which were always very much connoisseurs’ Ports) once occupied has now been replaced by the independent quintas who didn’t really exist until the early 1990s. The problems with this is that I think most independent quintas are, understandably, rather more Portuguese in their tastes in Port and sometimes also aim rather higher in price than can be sustained by the quality of their products. They also have essentially no market penetration in the UK which could be a problem in the longer term since I think the British market is the still the one to crack for any Port producer aiming at the quality end of the market.

[Andy Velebil]

Price vs. consumption of wine is massively exponential at every level. Increase the price, and consumption plummets. To try to support their agenda of claret equivalence, the port producers have dramatically reduced their declaration volumes in recent years, to try to support their pricing, but this is clearly self destructive.

This is not entirely correct and should be taken in more detailed discussion. Basic wines/Ports, generally referred to as Commodity wines, are very sensitive to price increases. Raise the price by a dollar or two (or your equivalent) and people very well may not buy your brand. So raising of prices on these has to be very slow and in small amounts. Often times these Commodity wines are made and sold on the wholesale level at very thin margins, making good overall profits on large quantities being sold. For these Commodity wines your statement would be correct.

At the upper end of wine, a moderate price change isn't going to cause a reduction in buying or drinking. Often, raising prices causes sales/consumption to increase. It's the perception that price equals a great wine. The same goes for reducing quantity. Reduce the amount, raise prices a bit and people get scared they won't be able to get it later and it's something they want to try now. The people buying at the upper end of the wine/Port spectrum generally have some amount of disposable income and generally enjoy drinking and sharing their wine with others. There will always be a small amount of "Collectors". Those who buy with no intention of drinking, only to sell them a short time later at a profit. But those are the minority of people buying VP.

While I love the fact we can currently get 20-30+ year old VP's relatively easy at auction, that won't be the case a decade or two from now. That also means prices will start going up as they become scarce. This year, and perhaps next, sales may be a bit slower than normal due to the Pandemic and financial uncertainties for a lot of the middle and lower income groups, the upper income group generally is relatively immune.

I can guarantee you their current methods are not "self-destructive."

[JacobH]

Basic wines/Ports, generally referred to as Commodity wines, are very sensitive to price increases. Raise the price by a dollar or two (or your equivalent) and people very well may not buy your brand. So raising of prices on these has to be very slow and in small amounts. Often times these Commodity wines are made and sold on the wholesale level at very thin margins, making good overall profits on large quantities being sold. For these Commodity wines your statement would be correct.

I understand why those considerations might apply to table wines but I am not sure if they apply in special categories like Port where even very serious wine consumers are not drinking large amounts of them.

For example, in the UK at least, I don’t think any Port could be referred to as a “commodity” wine: the average price of a bottle of wine is £5.93 and the cheapest branded Ports are in the £10-12 range. However, I would not be surprised if the ruby reserve Ports are quite price sensitive and far more than table wines in a similar price bracket.

Equally, I wonder whether there is a maximum price that the average bottle of Vintage Port will bear, on the basis that even serious wine drinkers are drinking VP only very occasionally? I also wonder if they are less likely to be price sensitive on the basis that retail prices are all over the place suggesting that no-one has a good idea as to how much they can actually sell them for?

Speaking for myself, if I am approaching another special category of wine, I might easily be put off by a price which is too cheap or too expensive. For example, if a saw a clavelin of vin jaune from Jura (which I might drink once every couple of years) for £10, I might think that it was likely to be too cheap to be any good. If it were £50, I might think it was too expensive for something that I enjoy but only occasionally. At £30, I would hope it be both good quality and worth spending the money on it. I wouldn’t be more tempted to buy it if knew that the most expensive vin jaunes has trebled in value over the last 5 years. Perhaps this isn’t a good analogy, though. I just don’t know.

[uncle tom]

At the upper end of wine, a moderate price change isn't going to cause a reduction in buying or drinking. Often, raising prices causes sales/consumption to increase. It's the perception that price equals a great wine. The same goes for reducing quantity. Reduce the amount, raise prices a bit and people get scared they won't be able to get it later and it's something they want to try now. The people buying at the upper end of the wine/Port spectrum generally have some amount of disposable income and generally enjoy drinking and sharing their wine with others. There will always be a small amount of "Collectors". Those who buy with no intention of drinking, only to sell them a short time later at a profit. But those are the minority of people buying VP.

Sales and consumption are not the same. There are periods in history when people rush to 'alternative' investments, such as wine, when they despair of conventional investment returns, but they tend to be followed by a damaging market crash.

The notion that a higher price can provoke greater consumption is, I think, a salesman's fantasy. I'll grant that some wine lovers are fascinated to taste high priced wines out of curiosity, but once that curiosity is sated, (often from a sample bottle) they rarely lay down stock. My observation of the wine drinking habits of people who are wealthy enough to afford top wines but are not wine geeks, is that they very rarely indulge them, and are as price sensitive as lesser mortals.

Wine markets have in recent years been swayed by the antics of China's new found nouveau riche, but as that country moves from party mode to hangover, I suspect their wine buying habits will become far more sober..