STATISTICS
According to the OIV in 2019, there was a 10% drop in production, which could be anticipated given the high production verified in 2018 (after a historically low 2017 harvest). The value, still being an estimate, should represent about 263 mHl (between 258 and 267 mHl) about 20 mHl less when compared to the previous year.
This drop was mainly due to the low values declared in the Northern Hemisphere (whose fall will be -15%, compared to -5% in the Southern Hemisphere).
Spain, with a drop of 24%, France and Italy with falls of 15% each, determined the behaviour of the Northern hemisphere.
Portugal, in countercyclical, showed a growth of 10%, being accompanied by Russia (+ 7%) and Georgia (+ 1%).
In the southern hemisphere, where production reached 54 mHl (minus 3 mHl compared to 2018), the 6 largest producers, with the exception of RSA, which grew 3%, all showed a decrease.
The following graph presented and published by the OIV on October 31, illustrates well the behaviour of world production since 2000, with emphasis on the high volumes for 2004, 2013 and 2018, and very low in 2017.
This drop was mainly due to the low values declared in the Northern Hemisphere (whose fall will be -15%, compared to -5% in the Southern Hemisphere).
Spain, with a drop of 24%, France and Italy with falls of 15% each, determined the behaviour of the Northern hemisphere.
Portugal, in countercyclical, showed a growth of 10%, being accompanied by Russia (+ 7%) and Georgia (+ 1%).
In the southern hemisphere, where production reached 54 mHl (minus 3 mHl compared to 2018), the 6 largest producers, with the exception of RSA, which grew 3%, all showed a decrease.
The following graph presented and published by the OIV on October 31, illustrates well the behaviour of world production since 2000, with emphasis on the high volumes for 2004, 2013 and 2018, and very low in 2017.
PORTUGUESE EXPORTS AND IMPORTS IN 2019
Total Portuguese wine exports exceeded 820 million euros (+ 20 million euros), representing an increase of 2.5% compared to 2018.This growth was mainly due to a price gain (+ 2.3%) given that the volume had a marginal growth of 0.3%. However, it should be noted that the increase in the average price is due more to a change in the product mix and less to the increase in the average price of each category.
There are different behaviours for the different wine categories, with the DOC wines (Controlled Designation of Origin) losing volume (-2.9%) and gaining price (+ 2.3%), while for the IG wines (Protected Geographical Indication) we witnessed a growth in volume (+ 8.9% ) and a decrease in price (-2.2%). Port wine had a good year, with simultaneous growth in volume (+ 2.8%) and price (+ 0.8%). The remaining wine categories (Wine, Wine with indication of year and grape, Sparkling and Madeira) had volume declines and average price growth.
Between the Internal Market and Third Countries, there were different behaviours, with the EU losing in volume (-7%), but with a significant increase in the average price (+ 7.8), while outside the EU, on the contrary, there was a 9.9% increase in volume and a 4% decrease in the average price.
While in the European Union market only IG wines and Port saw the value of exports increase, in Third Countries all categories, except for sparkling wines, increased in value.
Thus, and in a first analysis, export growth was mainly concentrated outside the EU, which will have contributed to greater market diversification.
For Sparkling wine 2019 was, overall, a bad year, with a drop in value of almost 24%,that is, representing 3 million less in the exported value.
Export quota by wine category (value)
A note on imports that warrants careful analysis. In 2019, according to data published by INE (National Statistics Institute), Portugal imported 2.89 million Hl, that is, a volume comparable to the 2.95 million Hl exported. Although the trade balance, in monetary terms, is highly favourable (820 million exported to 167 million imported), the physical balance is practically null.
According to the provisional data published by the Vine and Wine Institute (IVV), production in the 2019/2020 campaign will have reached 6.5 million hectoliters, representing an increase of about 7% compared to the previous campaign. This growth of + 426 thousand Hl was essentially assured by the Douro Demarcated Region (RDD), which alone grew 414 thousand Hl. The 6 largest regions (which produce more than 500 thousand Hl), Península de Setúbal and Vinho Verde showed growth of 6% and 7%, respectively, while Lisboa, Alentejo and Tejo presented decreases of - 16%, - 9% and -4% , respectively. In the medium sized and small regions, the variation oscillated between + 132% in Trás os Montes and - 18% in the Algarve.
While in the Center-North of the country there was a growth of 26%, in the regions of Lisboa, Tejo and the entire south of this river, they presented a drop of 8%.
In the period from 2017/2018 to 2019/2020 it appears that 3 regions, Bairrada, Tejo and Lisboa, maintained the downward trend already seen in the previous campaign. Alentejo, although falling, nevertheless remained above the volumes produced in the 2017/2018 campaign, having been the second largest region in declared volume.
The graphic below, obtained from IVV data, illustrates the annual variation of the 14 wine regions.
While in the Center-North of the country there was a growth of 26%, in the regions of Lisboa, Tejo and the entire south of this river, they presented a drop of 8%.
In the period from 2017/2018 to 2019/2020 it appears that 3 regions, Bairrada, Tejo and Lisboa, maintained the downward trend already seen in the previous campaign. Alentejo, although falling, nevertheless remained above the volumes produced in the 2017/2018 campaign, having been the second largest region in declared volume.
The graphic below, obtained from IVV data, illustrates the annual variation of the 14 wine regions.
This information is based on customs data for the respective markets and covers exclusively imports of bottled wines. It should be noted that the customs import data are more correct, as they recognise the entries by product origin, regardless of the passage through logistics platforms. For example, if a wine leaves Portugal for Hong Kong, via the Rotterdam port, the Portuguese National Statistical Institute (INE) can register it as an expedition to the Netherlands, however the Hong Kong entry customs office register as a Portuguese Product.
As a summary, it should be noted that not having been an amazing year for Portuguese wines, one cannot fail to retain the influence that may have had the fact that the 2018/2019 harvest campaign in Portugal produced a lower quantity than usual with 6.1 Mhl compared with an average value of 6.6 Mhl.
Methodological notes:
i) As a rule, “quota” or market share is calculated based on volume data; however, it is also common to calculate it on the basis of value; here the volume-based calculation was used.
ii) Thus we gained share when Portugal grew more than the market average or fell less than the average.
iii) Growth in value is measured by product (1+ ∆ volume) x (1+ ∆ price)
Below a summary of Portugal's competitive behaviour in 2019.
Germany (a good year for the brand)
Global imports fell in volume (-4.3%) but with a price gain (+ 3.6%).
Portugal gained market share, growing 2.1% in volume and 3% in price, maintaining the 7th position as a supplier, although here it may have been influenced by a good growth in volume and imports price of Port wine (+ 8.1% and + 5.6% respectively).
United Kingdom (bad year for the still wines)
Global imports grew in volume (1.7%) and with price gains (+ 4.4%).
Portugal only grew 0.6%, losing market share, with a price gain of 14.1%, which was due to the excellent performance of Port wine (+ 10% in volume), maintaining the 10th position as a supplier.
Russia (excellent year for the brand)
Global imports grew in volume (16.5%) and with price gains (+ 12.8%).
Portugal gained market share by growing 39.3% in volume and price (28.6%), maintaining the 7th position as a supplier.
Switzerland (bad year) 5th supplier
Global imports grew in volume (1.6%) and with price gains (+ 2.4%).
Portugal lost market share, with the volume falling -0.4% and the price falling equally -0.5%, despite the good performance of Port wine, which grew 8.5% and 4.3% in volume and price, occupying now the 5th position as a supplier, having been overtaken by Germany.
USA (good year)
Global imports fell -0.1% in volume and with a price drop of -1.5%.
Portugal gained market share, growing 5.5% in volume and price (1.3%), maintaining the 8th position as a supplier. This growth was mainly due to the still wines that grew more than Port wine (+ 2.7% in volume).
Canada (good year for the still wines)
Global imports fell -1.5% in volume and with price stabilization (-0.1%).
Portugal gained market share, although falling -0.3% in volume, strongly influenced by the fall in Porto and Madeira wines, and losing 0.9% in price (for the same reason), maintaining the 9th position as a supplier. Still wines grew around 3.4% in volume, with a slight price increase of 1.4%.
Brazil (Portugal at its worst, gaining share at the expense of price)
Global imports grew in volume (4.0%) and with the price falling (-0.6%).
Portugal gained market share growing 3.9% in volume, but with the price falling (-3.0%), maintaining the 3rd position as a supplier. The leaders, Chile and Argentina, lost less price than Portugal.
China (Portugal gaining share at the expense of price)
Global imports fell in volume (-10.0%) and in price (-14.1%).
Portugal gained market share with a drop in volume of -4.2% and -1.0% in price, having risen from 10th to 8th position as a supplier, surpassing South Africa and New Zealand. Likewise, Portugal reached the average price of South Africa.
South Korea (excellent year)
Global imports grew in volume (8.9%) and with price gains (+ 5.8%).
Portugal gained market share by growing 41.6% in volume and price (59.6%), rising to the 10th position as a supplier and surpassing South Africa.
Hong Kong (Portugal with a slight gain in a falling market)
Global imports fell in volume (-21.1%) and in price (-28.0%).
Portugal slightly gained market share, with a drop in volume of -20.1% and price (-10.4%), maintaining the 15th position as a supplier.
Japan (bad year) 11th supplier
Global imports grew by 5.9% in volume and the price by 2.9%.
Portugal lost market share, growing 0.6% in volume and losing -10.4% in price, greatly influenced by the poor performance of Madeira wine, maintaining even though its 11th position as a supplier.
Março, 30, 2020
As a summary, it should be noted that not having been an amazing year for Portuguese wines, one cannot fail to retain the influence that may have had the fact that the 2018/2019 harvest campaign in Portugal produced a lower quantity than usual with 6.1 Mhl compared with an average value of 6.6 Mhl.
Methodological notes:
i) As a rule, “quota” or market share is calculated based on volume data; however, it is also common to calculate it on the basis of value; here the volume-based calculation was used.
ii) Thus we gained share when Portugal grew more than the market average or fell less than the average.
iii) Growth in value is measured by product (1+ ∆ volume) x (1+ ∆ price)
Below a summary of Portugal's competitive behaviour in 2019.
Germany (a good year for the brand)
Global imports fell in volume (-4.3%) but with a price gain (+ 3.6%).
Portugal gained market share, growing 2.1% in volume and 3% in price, maintaining the 7th position as a supplier, although here it may have been influenced by a good growth in volume and imports price of Port wine (+ 8.1% and + 5.6% respectively).
United Kingdom (bad year for the still wines)
Global imports grew in volume (1.7%) and with price gains (+ 4.4%).
Portugal only grew 0.6%, losing market share, with a price gain of 14.1%, which was due to the excellent performance of Port wine (+ 10% in volume), maintaining the 10th position as a supplier.
Russia (excellent year for the brand)
Global imports grew in volume (16.5%) and with price gains (+ 12.8%).
Portugal gained market share by growing 39.3% in volume and price (28.6%), maintaining the 7th position as a supplier.
Switzerland (bad year) 5th supplier
Global imports grew in volume (1.6%) and with price gains (+ 2.4%).
Portugal lost market share, with the volume falling -0.4% and the price falling equally -0.5%, despite the good performance of Port wine, which grew 8.5% and 4.3% in volume and price, occupying now the 5th position as a supplier, having been overtaken by Germany.
USA (good year)
Global imports fell -0.1% in volume and with a price drop of -1.5%.
Portugal gained market share, growing 5.5% in volume and price (1.3%), maintaining the 8th position as a supplier. This growth was mainly due to the still wines that grew more than Port wine (+ 2.7% in volume).
Canada (good year for the still wines)
Global imports fell -1.5% in volume and with price stabilization (-0.1%).
Portugal gained market share, although falling -0.3% in volume, strongly influenced by the fall in Porto and Madeira wines, and losing 0.9% in price (for the same reason), maintaining the 9th position as a supplier. Still wines grew around 3.4% in volume, with a slight price increase of 1.4%.
Brazil (Portugal at its worst, gaining share at the expense of price)
Global imports grew in volume (4.0%) and with the price falling (-0.6%).
Portugal gained market share growing 3.9% in volume, but with the price falling (-3.0%), maintaining the 3rd position as a supplier. The leaders, Chile and Argentina, lost less price than Portugal.
China (Portugal gaining share at the expense of price)
Global imports fell in volume (-10.0%) and in price (-14.1%).
Portugal gained market share with a drop in volume of -4.2% and -1.0% in price, having risen from 10th to 8th position as a supplier, surpassing South Africa and New Zealand. Likewise, Portugal reached the average price of South Africa.
South Korea (excellent year)
Global imports grew in volume (8.9%) and with price gains (+ 5.8%).
Portugal gained market share by growing 41.6% in volume and price (59.6%), rising to the 10th position as a supplier and surpassing South Africa.
Hong Kong (Portugal with a slight gain in a falling market)
Global imports fell in volume (-21.1%) and in price (-28.0%).
Portugal slightly gained market share, with a drop in volume of -20.1% and price (-10.4%), maintaining the 15th position as a supplier.
Japan (bad year) 11th supplier
Global imports grew by 5.9% in volume and the price by 2.9%.
Portugal lost market share, growing 0.6% in volume and losing -10.4% in price, greatly influenced by the poor performance of Madeira wine, maintaining even though its 11th position as a supplier.
Março, 30, 2020
