What strategies can the producers of Madeira, Port, and Sherry pursue to stop their declining sales?
Simon J Woolf highlights that fortified wine producers are facing a long-standing existential challenge due to plummeting sales. Could the insights shared by panelists at the Arlberg Weinberg Symposium in Austria provide some guidance for survival?
The first indication that the fortified-wine sector might be struggling came to me in 2004 during my studies for the WSET Diploma. Our instructor expressed regret that we were already too late for Cyprus’s Commandaria and Sicily’s Marsala, both of which had been removed from the syllabus years prior. However, we did discover something that had previously eluded me: a delightful wine called Madeira.
I cherish the memories from that time. My refrigerator was always filled with an assortment of classic Madeira varieties, ready for my study sessions. I developed a passion for Sercial and Verdelho 10-year-olds, realizing that they not only served as a delightful apéritif but could also pair beautifully with cheese and dessert courses during dinner. Like many British wine enthusiasts, I was aware that Vintage Port was regarded as the premium choice, yet my encounters with other styles were limited until I began frequenting Portugal a decade later. There, the charm of wood-aged Ports—age-dated Tawnies and colheitas—revealed themselves to me, showcasing their intricate yet subtle richness. I had already developed a taste for dry Sherry, which I considered to be impressively refined. A common thread among these drinks was their somewhat esoteric nature; even in 2004, enjoying them felt like being part of an exclusive club, predominantly made up of members in their nineties.
However, while the glory of Port, Sherry, and Madeira may have been in decline by 2004, the situation has deteriorated further since then. Madeira has seen a gradual decrease, with sales in 2023 plummeting 17% from 2004 (IVBAM statistics). Sales of Port wine fell by nearly 25% between 2006 and 2021 (IVDP statistics). The worldwide sales of Sherry experienced the most significant decline, dropping almost 50% from 2004 to 2022 (Consejo Regulador statistics)—and the vineyard area in the Jerez region has shrunk by around 70% since the 1970s.
This context set the stage for a gathering of ideas at the Arlberg Weinberg symposium held in Lech, Austria, in December 2023. Daniel Niepoort, who is gradually taking over the family business from his father Dirk, represented Port wine, while Ricardo Freitas from Barbeito stood in for Madeira. The session, led with great expertise and at times, engaging provocation by Amanda Wassmer-Bulgin, wine director of the three-Michelin-starred restaurant Memories in Switzerland, was a notable highlight.
Neither Niepoort nor Freitas disputed the reality that the global consumption of fortified wine is declining, but both were keen to emphasize a narrative of quality prevailing over volume. They served as ideal advocates for this perspective, with Niepoort and Barbeito being recognized among the most forward-thinking and innovative producers in their respective regions.
Barbeito stands as one of the last eight producers on the island of Madeira and is relatively recent to the scene, having been established in 1948. Some of the historic names include Madeira Wine Company (Blandy’s), Justino’s, Henriques & Henriques, d’Oliveiras, and Borges, alongside two newer entrants: J Faria, which commenced production in 1998, and Madeira Vintners (CAF), with its inaugural harvest in 2012. As Freitas mentioned, “Madeira endured a significant dark era between the 1940s and 1970s, largely regarded merely as a cooking wine.” Some contend it has not fully recovered since then.
The 1980s brought hardship for many smaller producers and partadistas (local producers who do not export), with many facing closure. This was also the decade that nearly brought Barbeito to its knees, as Freitas’s mother shifted the focus of the company toward producing and exporting bulk Madeira. While this may have appeared to be a pragmatic choice for short-term financial relief, when Freitas took over in 1991, he discovered that a significant portion of the wine was being sold at prices below production costs. He realized the company had only a few years to survive unless substantial changes were made. Freitas promptly ceased bulk wine production and has since transformed his family business into a boutique winery over the ensuing decades. The Instituto do Vinho, do Bordado e do Artesanato da Madeira (IVBAM), which oversees Madeira’s production and sales, prohibited the export of bulk wine altogether in 2002, unless it was first denatured by adding salt and herbs. This strategic move effectively allowed them to exclude all food-grade Madeira from the main production figures, thereby creating a more favorable narrative.
However, as Paulo Mendes, founder of Madeira Vintners in 2012, pointed out, this optimism may be somewhat misleading. The largest segment of Madeira’s production statistics is labeled “current,” which refers to the three-year-old wines, the youngest that can legally be called Madeira. In 2023, out of nearly 3 million liters produced, 1.7 million were categorized as such. Wines sold under this classification are typically made through the less expensive estufagem method, which involves gently heating the wine for several days to replicate the long-term aging process of canteiro (barrel aging in upper warehouse levels), and are predominantly produced from the Tinta Negra Mole grape rather than any of the four “noble” varieties. The troubling fact is this: very few people actually consume these wines; most are exported to France or Japan for use in sauces.
When you factor in the 616,340 liters of food-grade “modified” Madeira, only 700,000 liters remain—about 25% of the island’s total production—that could genuinely capture the affection of wine enthusiasts for Madeira. Out of that total, roughly half comprises 300,000 liters of five-year-old Madeira, which is far from the dreams of connoisseurs. The ten-year-old category, often considered the entry for earnest varietal wines, saw a modest output of just 127,465 liters in 2023. This amounts to less than 5% of total production. The pressing question arises: With such limited quality options, how can Madeira entice a fresh generation of drinkers?
Freitas has dedicated himself to enhancing quality since his journey began. He shares how he stopped adding caramel to wines in 2001, a decision that went against his mother’s wishes. This practice was likely common among many others in the industry, yet not everyone exhibits the same level of transparency as Freitas. While he acknowledges that three-year-old Madeira production remains “important for the farmers [growers],” his goal is to eliminate this category entirely in the coming years. Achieving this would align him with d’Oliveiras, a house that has never engaged in trading bulk or three-year-old Madeira, despite their differences in other respects. D’Oliveiras embodies tradition and mainly emphasizes colheitas and frasqueiras (single-vintage wines).
During the discussion, Amanda Wassmer-Bulgin raised an important observation. “When I speak about Port or Madeira at the venue, I emphasize the producer. I don’t mention the vineyard,” she remarked. “But shouldn’t we focus on the terroir?” Her query highlights a fundamental issue with Madeira: it lags behind most premium wine marketing, which largely centers on the “story” surrounding individual vineyards, specific soil types, or climatic conditions. Madeira, however, does not fit neatly into the category of terroir wines. It is predominantly a blend across various vineyards, soil types, and growers. With no one among the eight producing houses owning more than 2–3 hectares of vines, the concept of a “grower-producer Madeira” or even a dedicated single-vineyard bottling is absent. The distinctiveness and complexity of Madeira primarily stem from the aging process rather than the base materials used.
If anyone can revitalize this narrative, it will be Freitas, who aspires to create a single-vineyard Madeira. However, the future of Madeira necessitates more than Barbeito’s efforts. It might be that the entire production approach needs reconsideration. The framework comprising eight producers and about 1,600 growers is tightly regulated by IVBAM concerning grape pricing, production methods, and classifications. This system is resistant to change, as growers enjoy a captive market with a secure high price (ranging from €1.20 to €2.40 per kilogram) for their grapes. Historically, grape quality has not been a priority, as Paulo Mendes pointed out: “If you visit Madeira during the harvest and observe the state of the grapes delivered to wineries, the problems become apparent.” Issues such as rotten grapes and prevalent botrytis are common.
Currently, IVBAM’s regulations dictate that any prospective Madeira house must possess at least 75,000 liters of existing stock before it can legally commence trading. This requirement essentially creates an insurmountable barrier for newcomers looking to enter the market. When Mendes initially sought to establish Madeira Vintners, he attempted to convince established houses to sell him some of their stock but was met with refusal. In 2012, however, he encountered a stroke of luck during an exceptional vintage that led to an overabundance of grapes, allowing him to leverage the situation to his advantage. Although Mendes and Freitas enjoyed a partnership for the initial years of Madeira Vintners, Freitas has voiced a less than welcoming attitude towards newcomers in 2023. “If someone new arrives, it will be incredibly challenging to compete with those who are already established,” he stated.
While Madeira’s structural issues hinder the type of innovations that might provide a way forward, there exists a more significant concern regarding the fortified wine category overall. The trend of consuming high-ABV, concentrated alcoholic beverages—at least in respectable circles—has drastically declined. Fewer individuals engage in the leisurely lifestyle that would allow for long lunch breaks culminating in a glass or two of Madeira or Port. The rise of the wellness movement and the increasingly aggressive anti-alcohol activism also pose considerable challenges for fortified wines, which inherently struggle to fit into responsible drinking or low-alcohol narratives. So, what accounts for the strength of the spirits and cocktail market? Unlike many fortified wines, spirits thrive on branding. These brands are grand, global enterprises, unconstrained by production regions or complex classifications. Consequently, the fortified wine category finds itself in a precarious position—too artisanal and focused on terroir to attract modern wine enthusiasts, yet not accessible enough for a broader audience.
Sherry presents an interesting exception. In contrast to numerous other fortified varieties, it boasts a robust domestic market (approximately 35% of total annual sales), which notably strengthened during the 1980s and has remained stable for the past twenty years. This is in stark contrast to Madeira and Port, which are not widely enjoyed by locals or the Portuguese population at large. Additionally, the two lightest and freshest styles of Sherry—Fino and Manzanilla—are typically bone-dry and well-suited for serving as an apéritif. The alcohol content in these styles is barely above that of unfortified wines, with a minimum alcohol requirement of just 15% ABV.
In 2021, the Consejo Regulador established several forward-thinking regulations, indicating its responsiveness to evolving consumer preferences. Fino and Manzanilla can now be made without fortification—meaning they can achieve the minimum 15% ABV through fermentation alone, which is feasible in Jerez’s increasingly warm climate. Additionally, a variety of historic grape types has been added to the list of allowable varieties. Previously, DO Sherries could only consist of Palomino Fino, Moscatel, or Pedro Ximénez (the latter two primarily found in sweet styles). With the more lenient regulations concerning grape sourcing for DO Jerez, the potential for authentic terroir-driven Sherries appears promising. The caveat, however, is that much of the most innovative work in the area is veering away from the practice of fortification. Producers such as Bodegas Luis Pérez, Raúl Moreno, and Muchada-Leclapart have showcased in recent years that a combination of ancient vines, thoughtful winemaking techniques, and the influence of flor can yield remarkable still (unfortified) wines that highlight the unique characteristics of the region.
Bodegas Tradición, among Jerez’s artisanal wine producers, depicts a promising trend of rising premium sales despite a decrease in overall volume. When I questioned managing director David Blyth regarding the Consejo’s prolonged reports of a downturn, he asserted, “Our sales have been steadily increasing among wine lovers, new enthusiasts (younger than we anticipated two decades ago), and upscale restaurants, catering to a discerning clientele.” Bodegas Tradición specializes in VOS and VORS wines, which are aged over 20 and 30 years respectively. This mirrors the sentiments shared by Ricardo Freitas—where premiumization is becoming more crucial than sheer volume.
If there’s a connection between stunning landscapes and wines that showcase terroir, the Douro Valley undoubtedly holds a prestigious position, renowned for its incredible terracing and magnificent scenery that appears sculpted by giants. However, the production of Port wine in the Douro has historically adhered to stringent restrictions somewhat reminiscent of Madeira’s situation. The Douro stands as one of the most meticulously regulated wine regions globally, and prior to Portugal’s EU membership in 1986, the sector operated under a similar monopolistic framework. The leading Port wine houses dominated the market, purchasing grapes from approximately 6,000 distinct growers in the valley. These growers faced limitations preventing them from establishing independent production due to a regulation mandating that Port wine could only be exported through a registered warehouse in Vila Nova de Gaia, which were—and continue to be—mostly controlled by long-established houses.
Since 1986, substantial changes have occurred, necessitating the relaxation of the export rule to comply with the European Union’s anti-monopoly laws. The valley now hosts nearly 100 smaller independent producers, alongside major players like The Fladgate Partnership, Symington Family Estates, and Real Compania Velha. Nonetheless, the larger houses continue to dominate the market, with only about 2% of Port wine production attributed to grower producers. Despite their size, the sales of these established houses are generally on the decline.
Daniel Niepoort indicated that his family’s business now produces considerably less Port than it did three decades ago, reflecting the sales downturn illustrated by IVDP’s statistics. He also mentioned that previously, Niepoort would acquire finished wine alongside grapes; now, they purchase only grapes. Overall, the annual output of Port has decreased from around 100,000 pipes (a pipe refers to a 600-liter barrel typically used for aging Port) to approximately 85,000 pipes over the last few decades.
Port wine faces challenges beyond its nature as a fortified beverage with an average alcohol content of 19–20%. It is generally associated with significant sweetness, containing 100g or more of residual sugar per liter, a trend that seems increasingly at odds with contemporary wine preferences—at least those of the majority of wine enthusiasts. Only white Port is frequently produced in a drier style, primarily for mixing purposes like white Port and tonic. The industry’s hesitation to adapt to this evolving consumer palate has been notable, though the independent winery Quinta do Infantado has consistently produced significantly drier variants, maintaining around 60g of residual sugar per liter. It’s essential to understand that the sweetness in Port reflects a stylistic decision rather than a mere requirement of the production process. The timing of fermentation’s interruption with brandy can differ based on the intended level of residual sugar.
Niepoort acknowledges the difficulties in selling Port these days, remarking, “Port isn’t a very easy drink to sell today. It has 20% alcohol and way too much sugar—but it tastes delicious!” In light of this, he has launched wines like Trudy Ruby, a drier, lighter ruby Port. Nevertheless, Niepoort’s true enthusiasm lies with colheita Ports—Tawnies crafted from a single harvest. He expresses confusion over the fact that Vintage Port commands a higher price. To ensure that mature colheitas receive their deserved valuation, Niepoort tends to be conservative with sales, sometimes needing to pull back his sales team. He humorously notes, “Sometimes they sell off the entire stock of a 20- or 30-year-old Tawny, and I say, ‘Hey, calma—it will take 20 years to make another one!’” Ultimately, he believes that “people are drinking less but drinking more wisely” when it comes to Port.
A significant trend is the remarkable rise of still wines in the Douro Valley. This category emerged in the 1990s and has surged to represent nearly half of the valley’s total output today. Consequently, even though Niepoort and other leading Port houses have seen a decline in fortified wine sales, the still wines fill that gap. This contrasts sharply with Madeira, where the still-wine segment remains almost a novelty, with limited production primarily available on the island itself.
Many leading Port producers have turned to still-wine production to manage excess grape supplies. The production of Port wine is tightly regulated by the Instituto dos Vinhos do Douro e do Porto (IVDP) via the benefício, which controls the volume of Port that can be produced each year from specific vineyards. Despite some unofficial and theoretically illegal trading of benefícios, most Port houses typically find themselves with surplus grapes annually due to the IVDP’s cautious strategies aimed at preventing market saturation with low-quality Port. The approach doesn’t yield the same success for still wines, which are often sold at prices below production costs. But that’s a topic for another discussion.
It is evident that Port producers have a safety net, even if global Port consumption continues its gradual decline, as it has been recently. The theme of premiumization plays a significant role here. Niepoort stands out in this area with its super-premium garrafeira Ports, aged in demi-johns. These Ports date back to 1863 and include the latest release from 1987. Priced around €500 per 75cl bottle upon release, these exquisite offerings often fetch four-figure prices in the secondary market. Meanwhile, the “Party Port” is somewhat more accessible while still maintaining a premium status. The initial release was a Tawny Port from the 1950s, bottled in magnums during the 1970s, and sells for just over €100 per magnum.
The resilience of the Sherry region relies on similar principles, with establishments like Bodegas Tradición maximizing aging processes and maintaining significant stocks to enhance their offerings. Others are adapting by producing unfortified dry wines. However, Madeira stands apart in this scenario; there is no contingency plan should the global demand for its main product continue to dwindle. The still-wine sector has struggled to make an impact after more than 20 years. Moreover, Madeira’s corporate landscape is poised for further consolidation. A deal with its majority owner, the French conglomerate La Martiniquaise, stipulates that when the current CEO of Henriques & Henriques, Humberto Jardim, passes away, ownership will transfer to La Martiniquaise, which also owns Justino’s, the island’s largest producer. This would leave only two primary groups (Justino’s and the Madeira Wine Company) alongside five small independent producers—a precarious foundation for the island’s future. It remains uncertain whether the ambition and creativity of Ricardo Freitas will suffice to sustain the category.
We have witnessed this situation previously with the near-total disappearance of Carcavelhos, another of Portugal’s once-celebrated fortified wines. Today, the region is effectively part of Lisbon, having been largely overtaken by real estate development since the 1980s. Presently, the city council is investing in a few hectares of vineyards to preserve the category. Marsala has managed to endure somewhat better but is now mainly recognized as a cooking wine. Meanwhile, Commandaria is produced in such limited quantities today that it can hardly be deemed commercial. While I understand the Wine & Spirit Education Trust’s decision to remove these historical references from their curriculum, it would sadden me if future wine students no longer explored the unique charm of Port, Sherry, or Madeira.