So what do you guys think about industry consolidation?

[g-man]

FTLOP topic but I thought it'd be interesting points of discussions here too.

You think we might start seeing less and less brands if the big houses kill them off?

[jdaw1]

Fewer and fewer brands, with more and more sub-brands (SQVPs, super cuvées such as Stone Terraces, Capela, Vargellas Vinha Velha, Nacional, etc).

More worrying is the reduction in volume. If the big names ship 1000 cases, in half a century what will be left for the world to drink of 2011s? Broadbent says that Harvey’s of Bristol bought 4000 dozen of the ’55 vintage. Bristol! That’s a bit more than half of all the Symington 2011s.

[g-man]

Would it be justified though with the super cuvees

I would if TFP would fold the Krohn name into the Taylor name and start releasing super colheitas much like SFE with the Grahams

[DRT]

Consolidation is inevitable and volume is a product of demand.

Drink it and they shall tread more

[Glenn E.]

I would if TFP would fold the Krohn name into the Taylor name and start releasing super colheitas much like SFE with the Grahams

I hope they don't do that. Krohn is well-known as an exceptional producer of Colheitas and Tawnies. Folding their stocks into the Taylor name might eventually raise Taylor's reputation as a producer of Colheitas and Tawnies, but surely not quickly enough to make up for the loss of the Krohn name (and reputation).

In fact, I hope they go the other way with it. Position Krohn as TFP's premium Tawny producer. Future Scions should be released as Krohn products.

[djewesbury]

More worrying is the reduction in volume. If the big names ship 1000 cases, in half a century what will be left for the world to drink of 2011s

Am I wrong or is this something they're doing quite deliberately? Even in a small harvest they could have put more into VP if they'd wanted.

[DRT]

More worrying is the reduction in volume. If the big names ship 1000 cases, in half a century what will be left for the world to drink of 2011s

Am I wrong or is this something they're doing quite deliberately? Even in a small harvest they could have put more into VP if they'd wanted.

volume is a product of demand.

[LGTrotter]

I have an uneasy feeling that Cockburn may change further, I hope not, but the lighter colour, medium weight port seems to be a dying breed.

[djewesbury]

More worrying is the reduction in volume. If the big names ship 1000 cases, in half a century what will be left for the world to drink of 2011s

Am I wrong or is this something they're doing quite deliberately? Even in a small harvest they could have put more into VP if they'd wanted.

volume is a product of demand.

But if you constrain supply you can sometimes increase demand...

[DRT]

But if you constrain supply you can sometimes increase demand...

So perhaps we can look forward to a larger production of Stone Terraces 2015?

[djewesbury]

But if you constrain supply you can sometimes increase demand...

So perhaps we can look forward to a larger production of Stone Terraces 2015?

At the same price I'm sure... Why not. I still don't understand why so little was put into the ordinary (non cuvée) brands - is it proportionate to the smaller size of the harvest or is it artificially smaller again..?

[DRT]

At the same price I'm sure... Why not. I still don't understand why so little was put into the ordinary (non cuvée) brands - is it proportionate to the smaller size of the harvest or is it artificially smaller again..?

Who knows? The shippers obviously have a primary objective - promote the brand at all cost to maximise profits in the long term. VP declarations, particularly big years like 2011, give them an excellent opportunity to get their brand name into the spotlight. But VP needs to be "exclusive" in order to command its place in the hierarchy of vintage wines. Making too much would dilute that concept and, at worst, would result in full cellars in VNG rather than a sold-out vintage. Making too little is annoying to people like us. But there are only a few dozen people like us in the world so we probably don't figure much in the calculations of the men in grey suits who calculate the balance of volume versus prestige.

[CaliforniaBrad]

More worrying is the reduction in volume. If the big names ship 1000 cases, in half a century what will be left for the world to drink of 2011s

Am I wrong or is this something they're doing quite deliberately? Even in a small harvest they could have put more into VP if they'd wanted.

volume is a product of demand.

But if you constrain supply you can sometimes increase demand...

See: DRC, Screaming Eagle, Vintage Champagne, et al.

[jdaw1]

See: DRC, Screaming Eagle, Vintage Champagne, et al.

That ignores the long-term problem. We Brits have a habit of drinking port that we have acquired from history. If the habit is extinguished, it will cease. Each ‟one of the great universities” used to guzzle lots of VP, and thereby teach the undergraduates, impressionable things, that this was the right thing to do.

But if too little port is made, the impressionable things will learn to drink vodka. Is that what is wanted?

[g-man]

Would you settle for lesser choices but more quantity though?

[djewesbury]

But VP needs to be "exclusive" in order to command its place in the hierarchy of vintage wines. Making too much would dilute that concept and, at worst, would result in full cellars in VNG rather than a sold-out vintage. Making too little is annoying to people like us. But there are only a few dozen people like us in the world so we probably don't figure much in the calculations of the men in grey suits who calculate the balance of volume versus prestige.

You pose two extremes. The truth is somewhere in between. They are surely making too little, and they are taking a gamble that selling out of this vintage will guarantee sales of future vintages, at a time when sales are continuing to decline.

But if too little port is made, the impressionable things will learn to drink vodka. Is that what is wanted?

Exactly... This is not what is wanted. There has to be a trade off between exclusivity and accessibility.. Or there is no future in VP.

[Alex Bridgeman]

If the balance is wrong the future can be bleak - look at the wines of the Carcavelos region of Portugal, which are no longr made...

[djewesbury]

Is it possible that the gamble the big houses are taking is with the speculative investment markets? Trying to price port into something approximating Bordeaux, where it has not been for a long time..? This would be a bad thing..

[uncle tom]

and volume is a product of demand

Which in turn is heavily influenced by price..

If one looks at the huge profit gulf between VP and LBV/Crusted, after factoring out production costs, shipping and taxes; and then looks at the IVDP's price and volume data, to get some take on how price affects sales volumes, a slightly awkward truth jumps off the page..

- If the production of VP were trebled, and the price halved, the producers would not only find it easier to sell their production, but they'd also make more money.

[g-man]

If the balance is wrong the future can be bleak - look at the wines of the Carcavelos region of Portugal, which are no longr made...

funny you should mention, but I acutally drank one yesterday

it was .. interesting .. to say the least. feels a bit like someone took some fresh grapes and blended it with a madeira

[Andy Velebil]

See: DRC, Screaming Eagle, Vintage Champagne, et al.

That ignores the long-term problem. We Brits have a habit of drinking port that we have acquired from history. If the habit is extinguished, it will cease. Each ‟one of the great universities” used to guzzle lots of VP, and thereby teach the undergraduates, impressionable things, that this was the right thing to do.

But if too little port is made, the impressionable things will learn to drink vodka. Is that what is wanted?

But this neglects the issue of people no longer retaining the drinking habits of yesteryear. Alcohol consumption on the whole has gone down worldwide. People's habits are changing and the inclusion of alcohol has changed with it.

[djewesbury]

If the balance is wrong the future can be bleak - look at the wines of the Carcavelos region of Portugal, which are no longr made...

funny you should mention, but I acutally drank one yesterday

it was .. interesting .. to say the least. feels a bit like someone took some fresh grapes and blended it with a madeira

Knowing nothing about Carcavelos, I googled a little and found this interesting if idiosyncratic blog.

[Glenn E.]

- If the production of VP were trebled, and the price halved, the producers would not only find it easier to sell their production, but they'd also make more money.

True, if you assume that trebling the production of VP would not affect the quality, and if you also assume that there's a market for 3x the amount of VP that is currently being produced.

The latter is probably a valid assumption since some LBV buyers would likely "move up" to VP if it were less expensive. I have serious doubts that the former is true across the industry. And if the former is not true, then that impacts the latter due to the existence of high-quality LBV.

If I were in charge of the entire industry, I would:

1. Make VP more exclusive. In my industry, VP would be ultra-premium and not really intended for "regular" consumers. It would be the "Bordeaux" of Port.
2. Raise the quality level and price of LBV. In my industry, LBV would move into a position slightly below where VP currently resides. I would basically be creating the "3x production, 1/2 price" VP that Tom proposes.
3. Raise the quality level of Ruby Reserve slightly. In my industry, there'd be a marked distinction between Ruby and Ruby Reserve, and also between Ruby Reserve and LBV. Currently LBV and Ruby Reserve overlap significantly which reduces the marketing efficiency of having both.

[g-man]

Marquis de Pombal I already thought had vineyard ratings much like bordeaux's 1855 classification.

even bordeaux has some 4$ clunkers like mouton cadet

I personally would get rid of the entire lbv line up completely.

I'd follow more the vesuvio model

declare every year. Half the price treble the production. Vesuvio sells for 40$ vs 80$ of the other houses.
on great years, put out a special designation.
Instead of capela, just make it Vesuvio Reserva Declarado or something like that
you then fill out the mid range witha ruby reserve
and the low range with a plain ruby

[jdaw1]

(I imagine that some of the hardened industry professionals you know who you are are reading this thread with multiple shakes of the head. ‟Have you ever had any dealings with the IVDP?”, they wouldn’t dare say aloud.)

[DRT]

Vesuvio sells for 40$ vs 80$

No it doesn't.

Screen Shot 2013-07-19 at 17.48.51.png (66.8 KiB) Viewed 2552 times

In non-generally declared years Vesuvio is priced to compete with SQVP's from the main producers. In years such as 2011 it is up there, and sometimes more expensive than, the big boys.

[g-man]

Vesuvio sells for 40$ vs 80$

No it doesn't.

Screen Shot 2013-07-19 at 17.48.51.png

In non-generally declared years Vesuvio is priced to compete with SQVP's from the main producers. In years such as 2011 it is up there, and sometimes more expensive than, the big boys.

have never seen that state side

even 2011 vesuvios are coming out at 60$ pre offer everywhere
the cheapest i got grahams was 80$ with T and F slightly more but also around there.

the 03 vintage the T and F were 65-75$ the vesuvio released at 45$

[benread]

Something occurred to me about this thread earlier today. A comparison with the brewing industry. In that sector we have seen a lot of consolidation but something I have noticed (and welcomed) is that alongside consolidation has come the emergence of new and niche brewers, producing smaller quantities of excellent beer. By way of example, when I first moved to Horsham in 1997 we had a large brewery in town - King & Barnes. It was bought by Hall & Woodhouse (I think) and my initially reaction was sadness. But then emerged 3 micro breweries in town, staffed by ex employees (even ex owners) of King & Barnes. They were unencumbered by the pressures of a large organisation and able to experiment. They now produce some fine beers, albeit from very modern and uninspirng breweries!

So I think that whilst losing the history of old producers is sad, it may in the longer term simply be a method of regeneration!

[jdaw1]

Something occurred to me about this thread earlier today. A comparison with the brewing industry. In that sector we have seen a lot of consolidation but something I have noticed (and welcomed) is that alongside consolidation has come the emergence of new and niche brewers, producing smaller quantities of excellent beer. By way of example, when I first moved to Horsham in 1997 we had a large brewery in town - King & Barnes. It was bought by Hall & Woodhouse (I think) and my initially reaction was sadness. But then emerged 3 micro breweries in town, staffed by ex employees (even ex owners) of King & Barnes. They were unencumbered by the pressures of a large organisation and able to experiment. They now produce some fine beers, albeit from very modern and uninspirng breweries!

That is an excellent and very pertinent comparison.

Are we to morph into the Campaign For Real Port?

[benread]

Are we to morph into the Campaign For Real Port?

The Campaign for Real Ale has the benefit of a sensible acronym - CAMRA. Your suggestion might end up as C.A.R.P. Not perhaps the acronym we would choose! Equally, the Campaing for Port Authenticity (CAMPA) may also not be of our choosing!

What would we be?

As an aside, CAMRA run an investment club that allows members to contribute between £10 and £250 per month (I think - and limits are controlled by some form of legislation as well I believe) to a fund that invests in supporting real ale. As a consequence, I own small shares in about 30 breweries many of which are not actually traded on the open markets but holdings made available specifically to the Camra Investment Club, privately.