08 Feb Renovating one of Portugal’s most historic sectors
Bernardo Gouvêa, President, Instituto da Vinha e do Vinho (IVV), remains optimistic about Portuguese wine exports in the COVID-19 aftermath
I would like to begin our interview today by talking a little about the heritage and cultural value of winemaking in Portugal. How would you sum up the essence of Portuguese wines and what makes Portugal’s wine industry unique as compared to other countries both old and new world?
The Portuguese wine is certainly one of the most resilient aspects of our economic and social system. Since the Roman times, we have wine production in Portugal. Being a small territory, Portugal has an enormous diversity of terroirs and more than 300 native grapes. As our agriculture shows many differences from region to region, we can see our people fantastic diversity on culture and territory. The wine sector in Portugal is present all over our history, our cultural environment, economy and society, both in the interior and the litoral region. Portugal is the European country with the most ancient physical frontier. It is the only wine country whose two most important wine regions are associated with its main urban centres, Lisbon and Porto. This makes wine a centre of our social and cultural Portuguese life. In terms of our agricultural sector, it is one of our most important areas through its exports all over the world.
Focusing more on your accomplishments in research, an area in which you are quite passionate about. What types of advances are being made, particularly in genetic research, an area that aims to pinpoint the uniqueness of certain varieties and bring back great grape varieties, which were once considered lost?
Portuguese researchers in universities and private companies band together to determine in the future which grapes varieties are best suited to specific sites, in the context of a changing scenario imposed by climate change. That is why one of the most important strategic objectives dealing with climate change consequences is to have a systematic approach to protect the biodiversity of our native grapes, namely prevent erosion of the genetic heritage accumulated over several centuries, with more than 300 native grapes. Despite the fact that some are not cultivated for the industry right now, we have to preserve them. We are very advanced on specific research, which is carried out by a joint venture between private companies and universities, doing research in the genetics of our vine plants. They are dealing with the improvements that we can make, knowing those genetics to have a more resilient plant patrimony to prevent the consequences of climate change.
One of your main objectives is to elevate the overall quality of wines produced in Portugal and to support producers, by helping them maintain high quality standards, as well as to incentivize those who fall outside the regional denominations, to take steps to become part of the quality production. You have set yourself a target to get 90 percent of production into the regulated system. How close is Portugal to reaching this goal and what are the main challenges being faced in order to achieve such a target?
This objective is an imperative. The situation is different from region to region. There are regions which have nowadays about 90 percent of their production as an indication of geographic location (IGP) or a denomination of origin (PDO). There are others having only 50 or 60 percent of their production is such way. Aligning with the priorities of the European Commission, we think that consumers require much more knowledge nowadays of their products, particularly when it comes to the authenticity. They respect and are looking for authentic products of specific origins with different characteristics. This is the reason why this objective is so important for us. PDO and IGP certifying bodies must guarantee that the consumers get genuine products. The wine regions, PDO and IGP, need to have more resources to put more incentives to achieve this target. We are joining efforts with those entities and private companies and cooperatives to achieve this. We are in the right way in many regions. It is really important to preserve and defend our diversity, because those characteristics are presented in those wines and can be very attractive for consumers, not only in Portugal but all over the world.
The wine business is based on continued process optimization, technological evolution, performance improvement, creation of new products, consolidation and the conquest of new export markets and long term planning. We know that even despite the atypical nature of business this year, Portuguese wine exports have continued a trend of growth in the export market. Can you relate to us the current outlook of the Portuguese wine industry, its size, the main players and production regions, the main export markets and the main factors that allow you as an institute to remain optimistic about the future?
We can estimate, in the present moment that the wine sector contributes around EUR 1.9 billion for the national economy. We have an industry that is very fragmented. About 75 percent of the operators have less than two hectares of vineyards. But we also have international important players globally. Companies that are present in different wine regions of Portugal and that are internationalized. The main regions in Portugal are the Douro e Porto region and the Alentejo region. Douro e Porto region is a very traditional one and the Alentejo region is a new region with much more dynamic kinds of wine. The main export markets are France, the US, Brazil, the UK and some Northern European countries. We have a priority for those markets, which are our top 5. We export nearly 50 percent of our annual production, about 6.5 million hectolitres. In 2020, we are going to grow by 3 percent in our exports, which we think is very impressive given the circumstances of COVID-19. We think we managed to consolidate our market share in those markets.
The mission of the Institute is to coordinate and control the institutional organization of the wine sector, audit the quality certification system, monitor community policy and prepare the rules for these applications. One of the most important responsibilities of the organization is to coordinate and supervise the promotion of wine products. In global terms, in 2019, Portugal ranked 9th in the top 10 of the world’s largest wine exporters. Since your appointment as president, in 2018, what strides have been made in elevating Portugal’s brand in the global wine marketplace?
Our main focus in IVV since we started has been digitalizing almost 75 percent of the national plan measures to ensure faster support to more private operators and better promotion to various programmes around the world. We will continue with this task until we reach 100 percent digitalization. We have a plan supporting these companies. We think that it is very important for us to adapt to the present moment. We did it over the last period, giving more support to the digitalization of companies, in which we also take into account the promotion and commercial efforts. We will increase the competitiveness of those wine producers globally in the long term. This was the main focus. We deal with many other aspects of the market. One of our other objectives this year was to give to all regions a standard plan to control the certified wines. We gave them more resources to make their controls. This was an important plan and it is not completely implemented yet, due to the pandemic. However, the largest portion of the plan has been adopted by the vast majority of the regions. We are going to put the sector in a much stronger place.
In 2020 there was a considerable increase in exports to countries such as the US, Brazil, Canada and the Nordic markets. Was this due to concourse efforts? What other regions are of interest to the Institute?
Until November, we had a value growth of exports of 4 percent to the US and the UK, of 21 percent to Brazil and 6 percent to Canada. Only one of the top 5 markets, France, had a 5 percent decrease, due to the pandemic. The Nordic markets also showed growth ranging from 6 to 35 percent in different countries. Those are signs of resilience of our brand, attractiveness and competitiveness on a global scale. We were affected in the domestic market, as other countries. We suffered a loss of nearly 50 percent due to the impact on tourism since March. However, due to our operators private companies and cooperative effort, we managed to stay strong in the exports department until the end of the year with all the limitations. To me, the most important contributor for this situation is the focus in an international perspective of the entire sector in priority markets, an effort which has been done by the CVRs who involve all the producers in this strategy, but also VINIPORTUGAL, which is an organization bringing together all the producers and promoting the wine abroad. I think that this is a very important task for the IVV.
What can you tell us about the diversity and richness of Portuguese wine tourism?
Portugal has more to offer than it seems. We have a beautiful territory, a vast history with an ancient culture that enables our wine tourism visitors to have a fantastic experience here. Portugal offers an extraordinary dynamic. As a result of five consecutive years of growth in the tourism sector, the wine operators invest in the wine tourism to offer outstanding experiences. I very much believe in a V-shaped recovery for the nation after the pandemic. I think that we will be ready to explore the maximum potential that we have in the wine tourism. There is a great plan to promote wine tourism for Portugal all over the world. We are all in agreement with all the entities in the government and the private sector. I think that we will be able to recover very fast.
What would be your final message of optimism and reassurance for our readers of Newsweek?
In Portugal we have more than 900 years of history. We have gone through many hardships, but we have the resilience to persevere and prevail thanks to our culture and our way of living in social terms. We are taking advantage of the rural identity that we have, as well as of our association and link we have with the natural resources of our exquisite environment. We think that nature is generous and with the help of science, I am sure that we will recover from this pandemic stronger, with new ways of working together, that cannot substitute the physical presence but that will turn us more efficient and productive. The technological and data reality in our country has been pushed very fast. These are some positive aspects that we will see after this critical situation has passed. We are optimistic because Portugal has a lot of natural complexity and diversity to move forward.