sym_header_part_2_740

rupert_portrait_1_740

strip_2_500

In part two of this in-depth profile, Rupert Symington offers a little background to the evolution of his company's D.O.C. portfolio while sharing an objective assessment of whether Douro table wines will achieve commercial equality with Port wine. For those unfamilar with the Douro valley and its beneficio system, this interview provides an abridged explanation of D.O.C. wine's dependency upon the success of its fortified cousin. The Symington stable of red table wines currently consists of four principal marques: Altano, Altano Reserva, Chryseia and Post Scriptum with a new single Quinta premium red wine named Vesuvio, to be launched in early 2009. The company's partnership with João van Zeller and the great Quinta de Roriz was amicably dissolved in January 2008.

 

Symington's Great D.O.C. Adventure

"In 1998 we had a board meeting around this very table and the feeling was that table wines were a waste of time; there were insufficient margins and the red wine we were producing, named Vale de Bomfim, sold a few cases here and there. As a result of this meeting I made a strategic report based on what I perceived to be going on in the Douro valley, and though I am not taking all the credit, I very much redirected the company's focus to table wine." Symington continues "I cannot be precise, but believe 1998 was effectively the last year when Port wine production equalled the beneficio (quota), in other words, there were only sufficient grapes for Port, so the price of Douro table wines escalated." The rigid Port wine system means grapes for table wine are essentially a useful by-product of Port, i.e. in years of plenty there will be a handsome provision of grapes, with sufficient fruit available to make fortified and still wines. Conversely, in years with lower grape yields, table wine prices will be much higher due to scarcity. Macro-economics suggest it is impossible to construct a commercial strategy with such massive fluctuations and any serious business would be unsustainable.

 

bomfim_2_winter_740

Winter at Quinta do Bomfim: the view towards Pinhão and its landmark iron bridge across the mighty Douro

 

"In 1998 Peter predicted we would have sufficient grapes available in the future, he was very clear about this." To build any volume wine brand one has to be certain of quality grape supply, the Symingtons had to make a decision: whether to continue their past practice of vinifying dry and selling on in bulk to other winemakers, or produce their own quality table wines by adapting existing Port wine facilities. "you cannot really make quality table wine in open Port fermentation vessels, because Port winemaking is a very extractive process - there are a lot of tannins and the whole point about Port is trying to extract the colour very quickly, you have only got thirty six hours. With table wine it is a much more gentle process and we did not have these facilities in 1998, therefore, it was necessary to adapt the technology to soften the process." This adaptation included changing the grape crushing system from a centrifugal crusher-destemmer and marked the first of Symington's many technological advances... "we acquired Quinta do Sol 1996 (what is now Symington's principal winemaking operation) and in 1999 experimented with our existing Sol facilities to try and make better Douro reds." Symington were already making red wine for bulk sales, so the shift to using the best grapes for their own wines seemed logical. After an intensive marketing study they went on to make their first serious red table wine ‘Altano', with an inaugural vintage in 1999, the new marque was eventually launched in early 2001.

 

According to Rupert Symington, the market was not particularly kind to Altano at the outset: the company launched their new wine at an ex-cellars price of 24 Euros a case - so two Euros a bottle. In the United States "it probably sold around 7-8 dollars a bottle with the strong U.S. currency of the period." However, Altano moved off the merchant's shelves well and Symington decided to employ a full time D.O.C. winemaker Pedro Correia in 2000. Pedro brought with him a lot of experience and the result was a much improved wine in the 2000 vintage - with the exception of 2002 when the wine was not made due to a poor harvest it has continued to improve year on year.

 

perdiz_patamares_740

Quinta da Perdiz: new patamares crisply defined by a low evening sun

 

The Beneficio and its impact on D.O.C. wines
rupert_portrait_3_300
Rupert Symington at Bomfim
The Douro valley adheres to a Port wine quota system known as the beneficio, a localized structure which determines the production quotas of fruit per hectare and according to an official quality designation, the prices to be paid by the winemaker to the farmer. Medium to top quality Port grapes are currently sold at a price of approx 1000 Euros a ‘Pipe'. A Pipe is the handsome 550 litre wooden cask in which all Port wines are stored. Identical grapes used for table wine attract only a quarter of this price at best. When a farmer does his sums, he will calculate that if he produces a hundred tonnes of grapes and the beneficio applies to only 70% of the harvest, these grade A - B classified grapes will sell at 1000 Euros a barrel and cover all of his fixed costs. The additional table wine grapes or ‘excess' will subsequently be harvested by the pickers already in situ and sold on to customers at a reduced price. As table wine is a marginal exercise for most farmers, and the surplus production generates a much lower income per Pipe, provided the winemaker pays 200-250 euros a pipe for his table wine grapes, he will just cover the cost of picking and transport to his client's winery. "With the extraordinary explosion of vineyard plantings in the Douro and the fact the beneficio has declined, table wine excess has grown exponentially to the point where wineries are saying to Douro farmers, we do not want your grapes because we do not have the capacity and storage facilities for dry reds." Dry red wines take five or six days to ferment and consume valuable space in the winery.

 

"we can compete with Australian wines as long as Douro table wine grapes are a by-product"

If table wine grapes are refused or the price offered drops to level of perhaps only 150 Euros per Pipe, viability is brought into question. "For a farmer, once you are achieving only break even on table wine grapes, leaving 15-20% of fruit to wither on the vine becomes a serious option. Furthermore, a substantial number of Douro co-operatives have vinified this low priced excess and as a result, accumulated wine stocks they are unable to sell. At Symington, we have added a lot of capacity to process table wines, not with a view to bottling it but making better quality bulk wine for a group of key customers around the country.

 

bomfim_winter_500
The schist terraces of Quinta da Bomfim in winter
If I can buy grapes at the prices I have indicated, i.e. 150 euros a pipe and sell Altano at 24 euros a case, I am making a fabulous margin. Recently, Charles has been arguing that the margins on table wines are currently better than Port because Port wine prices are actually being squeezed. The only reason you can obtain a low fruit price is simply because the grapes are a by-product - all of the fixed costs are being paid for by Port. So Table wine is profitable - but how far can you go and at what point are you going to reach a volume of table wine which puts pressure on Port wine?" According to Symington, the region produces around 8 million cases of Port a year with around 20 million cases of wine in total - comprising 10 -12 million table wine and the balance Port. The top ten producers of premium D.O.C. table wine makers account for perhaps only half a percent of total table wine production. Thus, even if premium D.O.C. production is quadrupled and the overall figure currently stands at around 2million cases per annum, with a further one million bottles of Vin de Pays, the balance sheet will continue to favour Port. Symington ventures "If production of table wine is expanded, it is highly possible that quality will suffer from the use of lower grade grapes. In addition, the 2 million cases of D.O.C. table wine produced are sold at a price to compete with cheaper Spanish, Argentinian or Chilean wines..." Therefore, if you did not have the Port beneficio subsidy, currently helping to sustain the Douro table wine production at an economically viable level, one would have to apply Port production's high fixed costs across the whole winemaking region. The result: elevated production expenditure for table wine, at levels perhaps three times that of Australia. Symington concludes, "we can compete with Australian wines as long as Douro table wine grapes are a by-product, but if this were to change... the Douro is unique because it sells 10 million cases a year of Port wine at the same consistent price of quality dry reds - not even Bordeaux can claim this, wine sold at the kind of price you need to justify such high production costs. The only reason we can sustain grape production here is because we have a product which sells at seventeen Euros a case from the farmer to the winery"

 

"Douro is unique - it sells 10 million cases of Port wine a year at the same consistent price of quality dry reds, not even Bordeaux can claim this"

 

Rupert Symington's analysis of the Douro's future if the beneficio were to be abolished is frank and direct, as one would expect, he clearly defines how important maintaining Port production is to the newly burgeoning D.O.C. table wine industry: "Table wine will basically continue until such a point as the beneficio system is abandoned by the European OCM or competition rules, then the price of Port will come crashing down and the whole revenue from this Douro industry will be slashed by 30-40% as the ‘real cost' of Port production comes into play... table wine then goes up in price and Altano becomes unviable and people stop making table wines in the Douro, except for the Chryseia's and garagiste style cult wines with small production. The volume brands then disappear and the region will need to shrink its production with a likely desertification of part of the Douro... of course, this is only if you get rid of the quota."


Caring for the Douro community
vesuvio_patamares_500
Quinta do Vesuvio patamares at sunset
Symington Family Estates is a very large producer employing a great number of people in both Porto and the Douro valley. "we have a huge social responsibility and right now it is Port that pays the bills... I am passionate about ensuring that in the longer term farmers in the Douro are looked after and properly paid - the only way to do that is to ensure a healthy Port market. I am one hundred percent committed to table wine but it is an add-on not ‘instead of'. Altano now has sufficient brand equity to stand on its own even if production costs were somewhat higher...it is not that far behind lower priced Ports" S.F.E. is one of the key members of the 'New Douro' group who jointly host D.O.C. tastings twice a year at London's Tate Modern art gallery. "I think the smaller quality producers should continue getting together as they do now and we will obviously join them in promoting our hand crafted wines ... but we should all be beavering away to build solid brands. I would say the true heroes are going to be those producers who make the equivalents of a Guigal Côte du Rhône - wines that are not expensive but command respect, in other words, Douro wines based upon real terroir and good winemaking. The supermarket buyers say I love your wines but I have got to be tough on the price - they all want the earthy terroir of the Rhône and other top regional French wines... for the bargain price of an Argentine Merlot. Altano has now built up its own head of steam but I do not believe we will build our branded business on this wine alone, I think that now we have acquired the Cockburn's assets we are in a position to offer a second tier, and thus, two different price levels"

 

vesuvio_view_740
Quinta do Vesuvio: pristine winter reflections viewed from the front of the house

 

Speaking of elegance, Altano and the new Vesuvio..
As we await the arrival of Charles Symington in the handsome reception room of Graham's lodge in Vila Nova da Gaia, Rupert was already under starter's orders as he rounded off our morning conversation with a few final thoughts "you have different levels of Douro wine; the 200 case super-premium production of Crasto's Vinha da Ponte, a wine which garners high Parker points; then there are the luxury branded or estate wines like Chryseia or Roriz - one can produce 3000 cases each of these but it is hard to realize more than fifty Euros a bottle. The future of the Douro is not just a bunch of high priced estates, because that is not going to put money into Douro farmers' pockets. You need brands that will help farmers out in the long term - we have to remember that Douro table wine only exists because of Port and this is where most marketing resources should be spent. If you go to the States people are now drinking fine Port like there is no tomorrow." Rupert says he has a regular argument with his own marketing department because S.F.E. have two different importers in specific countries for their Port brands and yet they are both offered identical table wines to promote.. he feels the introduction of another volume brand would add something fresh for the other agents, saying "that's my strategy...if you left it to me I would have a third brand as well! - but in this commercial climate, that is a bit difficult."

 

vesuvio_no_1_740

A beautiful winter sunset at legendary Quinta do Vesuvio in the high Douro

 

The great vintage Port wines of Quinta do Vesuvio in the high Douro are famous, and it is this legendary property that will now provide the next step in Symington's growing D.O.C. portfolio. An estate with such a fine and well-respected pedigree for making fortified wine, is about to launch a premium table wine that ultimately may well rival the Cru Classé's of Bordeaux and provide S.F.E. with a stand alone venture at the highest end of fine wine production.

 

"the decks are clear for creating a great Vesuvio"

"Our top wine Chyseia is elegant and not a big black strap power punch wine. Last year we hosted the head of Bordeaux's Oenology faculty, Dr Pascal Chatonnet and we have tasted our wines with many other leading professionals and gained a positive response ... you either make an undrinkable wine or one that is more palate friendly - with Chryseia I believe we have found a very good mix. When we introduce the new Vesuvio D.O.C. wine we believe it will coexist comfortably with Chryseia. Vesuvio is actually a separate company and will stand on its own, like a third leg... I would like to produce more than 3000 cases of this new wine. In addition I wish to raise the profile of Altano, with such a large volume its image has become a little tarnished, but the Altano Reserva is only a tiny production of 2,500 cases, the same as Chryseia and is a jolly good wine... but it is all about perception. We have now sorted out our production facilities and can produce our full range of premium wines together, without conflict - the decks are clear for creating a great Vesuvio D.O.C."

 

< previous page
New Douro homepage>

sfe_nav_1
sfe_nav_2
sfe_nav_3

 

Illustrated profiles of each Symington D.O.C. Quinta coming soon - for details subscribe to our E-newsletter


^ Back to top