Portugal’s iconic family-owned winery Symington Family Estates had its most successful year yet in Asia last year, with its port sales jumping more than five times compared with 10 years ago, though headwinds remain in its Europe markets.
Speaking to Vino Joy News, Euan Mackay, Commercial Director of Symington, revelled in the fact that Asia Pacific outperformed in 2022 despite pandemic restrictions in key markets in Hong Kong and mainland China.
“We did extremely well in Asia. Asia Pacific in 2022 was our best year ever,” enthused Mackay, who has been with Symington family for over 20 years. In terms of sales, the region now accounts for 5% of the family estate’s overall revenue, compared with a meagre 1% when it first started investing in the region 10 years ago. Its flagship port brand Dow’s is imported in Hong Kong and Macau by Links Concept.
“We’re happy. We always like to get more. But, you know, I think something like 10% would be a good aspirational target,” he adds.
Despite Asia’s high performance, the year 2022 was “less exciting” for the family estate coming off from its record year in 2021, with pressures of dry goods, Ukraine war and UK’s new duty tax.
The UK market, its traditional and key export destination that contributes 25% of its annual sales, is being hit with what WSTA described as “the biggest single increase in almost 50 years” for wines and spirits with UK’s new duty tax reform.
Impacts of the tax reform on port are particularly damaging as the new 20% tax rise will see price for fortified wines in the UK rise by £1.29 a bottle, says WSTA.
The law which is set to take effect on August 1 forced many merchants in the UK to place advance orders for this year’s Christmas season, says Mackay. The UK is traditionally an import premium market for Symington, with reserves, late harvests and vintage ports being favorites among UK drinkers.
“We are shipping to the UK market usually in September and October, so we planned for that. And then suddenly last month, the UK government confirmed this change in duty and the retailers then started to act. Then within a month, we’ve suddenly got all this. It’s so crazy. There’s never a dull moment,” he says.
Another curve ball thrown at many companies including Symington last year was dealing with impacts of Russia-Ukraine war. Sales to Russia, a fast-growing market for the estate, came to a halt because of the war, he revealed. The market accounts for 2% of its annual sales.
Market volatility though is something though to be expected when dealing with different dynamics in global markets, he says, the challenges facing the 138-year-old port house with today’s consumers is how to “de-seasonalize” port and “engage new consumers” such as millennials and Gen-z.
The winery has been introducing large formats of port for on-trade consumption and launching wines specifically for the mixology category to introduce fortified wines to younger consumers, adds Hugo Mesquita, Head of Global Sales at Symington.
“The whole fortified segment is gaining attention now,” interjects Mackay on the backs of bartender and mixologist’s newfound enthusiasm with port. Symington’s Graham’s Blend No. 12 Ruby Port and Cockburn’s Port have been quite successful with the younger drinking crowd.
While encouraged by the new entrants of consumers to port, he cautions, “we don’t want to denigrate what we are doing with the classics because these are the lifeblood of our industry and ultimately to use the new concepts to tie in consumers to the classics.”
The new generation that’s taking the helm at Symington in particular, he notes, has been instrumental in driving the family business forward with new “refreshed” ideas and strategy to engage consumers.
“They are in the business and are bringing their own idea and it’s incredibly powerful. It’s their enthusiasm that drove the company forward and challenge the current generation,” he says speaking of the fifth-generation owners at Symington, Rob, Charlotte, Vicky, and Harry. “It’s such a good thing for the business, and Symington is known in the industry that has a very clear policy on retirement. What that does is that it gives the next generation the freedom.”