DOMINIC SYMINGTON

[Symington Family]

Hi Dominic,

I've enjoyed reading your responses. I have a few questions from the business side of things:

1) I am curious about the strategy of having numerous port houses under one umbrella. I realize that initially, a house can be improved by much needed capital infusions and proven management savvy, but do you find it relatively easy to maintain the distinct style with each brand of port, or is there real risk that houses under your umbrella will start becoming too similar to one another over the long run? Is there any significant self cannibalization risk from this approach? Also, how much does economy of scale factor into deciding to add another house to the portfolio?

2) I would imagine that there is significant currency risk with your operation, given how much of the port consumption market doesn't use the Euro. Do you hedge this risk at all? If so, how do you go about it? If not, what would be the reasons?

Thanks for taking the time on this board.

Regards,

Brian

Hello Brian,
To answer your first question. It's relatively easy to maintain the distrinct style of each house. We have a very clearly defined separation of properties between the various brands. This ensures that the style of each house is very largely defined by the individual vineyards. We have gone further in that each of the principal propoerties has it's own winery therefore ensuring individuality, each with their own winemakers. Graham's Malvedos & Henry, the new Bomfim Lagares winery and Pedro Sousa. Warre's & Cavadinha with Paulo Macedo and now Mário Natário. Vesuvio wa smanaged by Mário but a sindicated he's now moved to Cavadinha and has been replaced by Bernardo. Canais has Ricardo. The advantage of this system, although more costly creates some friendly internal rivalry between the wine makers, all supervised by my cousin Charles. Each of the firms also have their own ageing cellars in V N Gaia therefore maintaining total separation of stock.
We do of course benefit from considerable economies of scale in the overall management both of the Viticultural side of the buisness as well as from adminsiatrative back-office and two bottling centres. The commercial management is also jointly managed although we do have individual brand Marketing Managers.
We most probably wouldn't be looking to expand the portfolio of brands, although one can't really never say never!

Currency risk is a huge problem! Fortunately the Euro has helped considerably and removed some quite significant headaches. Additionally, most European non-Euro currencies stay pretty much pegged to the Euro which has helped. For non Euro markets we do hedge, buying forward against budget & targeted sales. At least this allows us to have stable finacial forecasting. In high risk markets we take out credit risk cover.

[Niklas J]

Dear Dominic,

I have a more general question which I have given some thought but somehow never asked a Port producer.

In Douro you use aguardente with 77% alcohol content. In Madeira the aguardente used holds 96%. Madeira benefits from vinic alcohol with a higher alcohol content as the amount needed to add is less when using 96% vinic alcohol compared to 77%. Less dilution which is of benefit as Madeira grapes doesn’t reach the same potential alcohol as in Douro. However, I’m curious: has there ever been discussions in Douro to use the 96% aguardente? Any experiments perhaps? Or is it simply a matter of balance not ending up with too a concentrated wines?

Appreciate your input on this.

Kind regards,
Niklas

[Stewart T.]

Hey Dominic -

Thanks so much for joining us as a Guest Forum Host!

I think we all have a lot of great Port-related memories, but off the top of your head, what sticks out for you as your your most memorable Port-related moment?


Stewart

[Bjarne Mouridsen]

Dear Dominic
Thanks for joining us at The Vintage Port Clubs 1994 tasting in Denmark recently.
You shortly mentioned it in one of your answers. There is a lot of discussion about mixed vineyards and field blend. Several winemakers has pointed out that they prefer field blends and with the addition of more grape varieties than “the big five”.
What is your opinion about this?
Can you mention some of your brands, where more seldom used varieties plays an important role?

Regards from Denmark
Bjarne Mouridsen

[Symington Family]

Dear Dominic,

I have a more general question which I have given some thought but somehow never asked a Port producer.

In Douro you use aguardente with 77% alcohol content. In Madeira the aguardente used holds 96%. Madeira benefits from vinic alcohol with a higher alcohol content as the amount needed to add is less when using 96% vinic alcohol compared to 77%. Less dilution which is of benefit as Madeira grapes doesn’t reach the same potential alcohol as in Douro. However, I’m curious: has there ever been discussions in Douro to use the 96% aguardente? Any experiments perhaps? Or is it simply a matter of balance not ending up with too a concentrated wines?

Appreciate your input on this.

Kind regards,
Niklas

Hi Niklas
There is a slight difference in the Aguardente (Brandy) which is used for Port production and the alcohol which is permitted for Madeira.
You are right about the wine differences.
Port, up until 18 months ago could only use "brandy" - distilled wine - whereby Madeira, although they now generally use vinic alcohol (Grappa/Marc/Bagaceira) which is rehydrated grape pumice, were permitted to use any type of alcohol and at one point used distilled cane alcohol.
Due to the huge price rise of brandy in Europe over the last few years when the EU removed distillation subsidies, vinic alcohol as well as brandy was permitted for fortification of port.
I'm not sure what others have done but we have maintained the use of brandy (distilled wine).
As far as I'm aware there hasn't been any suggestion to use anything but regular 77º brandy or latterly the possibility to use vinic alcohol, which frankly is virtually identical, or indeed any suggestion to change the strength.

Incidentally, the brandy used for port fortification is identical to the base brandy's used for “brandy” or indeed, even Cognac. basically high strength distilled wine. For Port, the trade is permitted to purchase within the EU. Each company is allowed to source as they wish although samples must be certified by the IVDP.

[Symington Family]

Hey Dominic -

Thanks so much for joining us as a Guest Forum Host!

I think we all have a lot of great Port-related memories, but off the top of your head, what sticks out for you as your your most memorable Port-related moment?


Stewart

Thanks Stewart.
There are many! Possibly one of the most important was when we repurchased Quinta da Senhora da Ribeira. The property had originally been purchased by George Warre for Dow's but was sold in the early 1950's when the trade (and our company) were at a very low ebb - we were fortunate to be able to repurchase the Quinta in 1998, the bi-centenary of the founding of Dow’s. I remember telling my Dad that we had managed to buy it back, it was a quietly emotional moment.

[Al B.]

Dom,

It's tremendous to have you join us and for you to be willing to answer all of our questions. It shows how powerful the internet can be when used properly.

Symington Family Estates has a good internet presence and far better than many producers. I see regular facebook posts from Graham and Cockburn. The Malvedos blog has a story posted about twice per month (I miss when it was more often a couple of years ago and included some stories that were very interesting if a bit technical) and the Graham website is kept reasonably up to date (no announcement in the news of the 2012 ports available) but none of the other websites run by SFE appear to be maintained. The excellent Vintage Port Site last had a news story added to it or a question answered in June 2013 but does show the 2011 and 2012 port releases. The other SFE websites might have had one or possibly 2 new stories added in the last 18 months but appear to essentially be mothballed.

Is there a plan to consolidate the SFE websites? The internet effort appears to be going in to Graham and to a lesser extent Cockburn. Is the intention to allow the other sites to slowly fade away or are there plans to revamp and upgrade perhaps http://www.symington.com or the Vintage Port Site and to use these to bring us stories that don't relate to Graham and Malvedos? We're interested! When we can't drink port we love to read about it and to see pictures of the Douro Valley!

Thanks,

Alex

[Symington Family]

Dear Dominic
Thanks for joining us at The Vintage Port Clubs 1994 tasting in Denmark recently.
You shortly mentioned it in one of your answers. There is a lot of discussion about mixed vineyards and field blend. Several winemakers has pointed out that they prefer field blends and with the addition of more grape varieties than “the big five”.
What is your opinion about this?
Can you mention some of your brands, where more seldom used varieties plays an important role?

Regards from Denmark
Bjarne Mouridsen

Hi Bjarne, thanks very much for your question - thanks also for the amazing 1994 tasting, quite incredible, a greta treat.

This is quite a complex question. There is absolutely no doubt that the 1960’s/70’s selection of just 4 varietals was far too restrictive for the Douro. However all subsidies and Government support for conversion and replanting was restricted to these 4; Touriga Nacional, Touriga Franca, Tinta Roriz and Tinta Barroca. As a result these came to dominate.
Largely, the research and the replanting was the first major development in the Douro since the replanting post phylloxera. The vines had reached some 70 to 90 years of age and were, more or less, no longer economically viable. The vineyards were labour intensive with no possibility of any form of mechanisation so costs were very high.
It very soon became clear that there were some additional varietals that were also important to the region, such as Tinto Cão, Tinta Amarela, Souzão plus a few more such as Rufete and Mourisco etc. and latterly varietals such as Alicante Bouschet and one or other producer with their own particular favourite.
A field blend vineyard was a dynamic moving mixture, as one vine died it would be replaced, not necessarily by the same varietal but often grafted by the farmer from what he perceived to be one of his more vigorous vines. This vigour would normally reflect a combination of the climate over the previous few years, a dry spell and a varietal such as T. Franca (Francesa) would be more vigorous, after a few years of greater rainfall or cooler it could be another varietal.
Single varietal planting obviously allows for far greater viticultural management. A problem or disease with one varietal won’t necessarily affect another therefore preventative action can be directed much more precisely. The maturation cycle of the different varieties differ significantly as do their preferences for a little more soil moisture, heat, exposure or aspect. In this way the single varietal can be located to its best advantage.
Having said this, in a good year, a field blend lot can be absolutely spectacular, however I don’t think one should be too fundamentalist either way, both have their advantages and one probably has a greater degree of consistency with varietal planting.
We certainly have both types of vineyard although progressively as we replant and renew our vineyards we will move towards single varietal blocks. Here however is where we can be careful, creating smaller vineyard parcels, creating a checker board of varietals rather than huge swathes of single varietals. Alternating in altitude and aspect of the differing varietals. In this way we have a multitude of options. And finally the option to have single ferments, multiple varietal ferments etc, the possibilities are endless.

On a separate note, we have earlier this year planted an further experimental vineyard with a collection of 25 red varietals, 1 rosé (Moscatel Roxo) and 22 white varietals, all authorised Douro grapes. We have 200 vines of each varietal plus four control varietals, these although not original to the Douro region are 4 which have a huge amount of research work published and therefore will act as control samples as different issues arise.
(we planted an extensive root stock research vineyard to monitor different varietals with different root stock in the early 1990’s, and in the early 2000’s created a collection of Tinta Roriz/Tempranillo and a Douro and Dão Touriga Nacional vineyard for clonal research. We also have smaller plots of other varietals to understand how they have evolved in different areas of the Douro.)

[Symington Family]

Dom,

It's tremendous to have you join us and for you to be willing to answer all of our questions. It shows how powerful the internet can be when used properly.

Symington Family Estates has a good internet presence and far better than many producers. I see regular facebook posts from Graham and Cockburn. The Malvedos blog has a story posted about twice per month (I miss when it was more often a couple of years ago and included some stories that were very interesting if a bit technical) and the Graham website is kept reasonably up to date (no announcement in the news of the 2012 ports available) but none of the other websites run by SFE appear to be maintained. The excellent Vintage Port Site last had a news story added to it or a question answered in June 2013 but does show the 2011 and 2012 port releases. The other SFE websites might have had one or possibly 2 new stories added in the last 18 months but appear to essentially be mothballed.

Is there a plan to consolidate the SFE websites? The internet effort appears to be going in to Graham and to a lesser extent Cockburn. Is the intention to allow the other sites to slowly fade away or are there plans to revamp and upgrade perhaps http://www.symington.com or the Vintage Port Site and to use these to bring us stories that don't relate to Graham and Malvedos? We're interested! When we can't drink port we love to read about it and to see pictures of the Douro Valley!

Thanks,

Alex

Alex, great to hear from you and thanks for the gentle "tap on the wrist". You are absolutely correct and it is something that we have been discussing internally, literally these last few days so hopefully you'll see a little more focus and assiduous posting and information.
Dom

[Lindsay E.]

Dominic,

In one of your earlier replies to Paul's question about what effect the 2011 vintage had on boosting growth and interest in port wine, you said, "while the overall market is slipping in total volume the premium end is slowly growing. There is still a huge amount of work to be done!"

Are you seeing a similar trend in your Madeira wine portfolio, with gradual market decline but growth in the premium end, or is there a completely different trend with Madeira?

Thank you again for taking the time to join us and answer questions Dominic.

Sincerely,

Lindsay Evans

[Glenn E.]

Something that we have noticed here in the US is that these recent releases of ultra-premium very old tawnies such as Ne Oublie seem to have very limited releases (which makes sense due to limited quantities), and those limited releases always seem to be in the UK. But according to the IVDP's data, the UK tends to be a market for premium ruby Port, not for premium tawny Port. It's the US market that appears to consume the most high-end tawny Port, which would seem to indicate that the US would be the target market for these ultra-premium tawnies.

Is there a particular reason for releasing these ultra-premium very old tawny Ports in the UK instead of the US?

(I can't afford them either way, so there's really no ulterior motive to my question. If I could afford them, the additional cost of importing the bottles from the UK would barely be a drop in the decanter so to speak.)

[Symington Family]

Dominic,

In one of your earlier replies to Paul's question about what effect the 2011 vintage had on boosting growth and interest in port wine, you said, "while the overall market is slipping in total volume the premium end is slowly growing. There is still a huge amount of work to be done!"

Are you seeing a similar trend in your Madeira wine portfolio, with gradual market decline but growth in the premium end, or is there a completely different trend with Madeira?

Thank you again for taking the time to join us and answer questions Dominic.

Sincerely,

Lindsay Evans

Hello Lindsey,
The port trade has lost a over 10% of total sales volume in the last 10 years. The majority of this drop has come from “standard” ports (generic ruby, tawny & white) and principally from western European markets. The premium categories have grown, but they in no way compensate for the overall drop in volume and all the consequent implications to the Douro farmer. Some of this is partially compensated for by the advent of a Douro wine business but the situation is still quiet uncomfortable for many, particularly the small holder.

Madeira is a little different in that the market is reasonably stable and with a very clear split between “commercial” madeira and a very small but now growing interest in older vintages, colheita’s, and some interesting varietal wines. But we’re speaking, for the moment, timy quantities.

[Symington Family]

Something that we have noticed here in the US is that these recent releases of ultra-premium very old tawnies such as Ne Oublie seem to have very limited releases (which makes sense due to limited quantities), and those limited releases always seem to be in the UK. But according to the IVDP's data, the UK tends to be a market for premium ruby Port, not for premium tawny Port. It's the US market that appears to consume the most high-end tawny Port, which would seem to indicate that the US would be the target market for these ultra-premium tawnies.

Is there a particular reason for releasing these ultra-premium very old tawny Ports in the UK instead of the US?

(I can't afford them either way, so there's really no ulterior motive to my question. If I could afford them, the additional cost of importing the bottles from the UK would barely be a drop in the decanter so to speak.)

Hi Glenn
The UK is an extremely influntial base for the world wine trade. Many specialist fine wine merchants are London based and trade into the US and other world markets and therefore for these very limited wines it gives access to a multitude of markets which wouldn't otherwise be reachable.

[Wayne Logus]

Hi Mr. Symington:
I have some general questions about the definition of “Library” releases of old vintages. Does the term apply to older vintages that just happen to be held in the cellars of the producer and released primarily for marketing reasons? Does it only apply to wines bottled by the producer or can they be sourced from other agents or locations?

Is the ‘52 Grahams “Diamond Jubilee” Port released a few years ago, considered a Library release or was it a simply a decision to bottle from old casks of that year? In the scenario of red wine library releases, one sometimes sees vintages that are quite recent, particularly from America. Are there generally agreed upon requirements for a wine to be considered a “Library” Release?

Thank you in advance for helping me to better understand this term.


Wayne

[Eric Ifune]

Mr. Symington,
Is there currently a single individual overseeing viticulture at the various Syminton Family Estates; or is each individual quinta doing their own thing?
Thank you.

[Moses Botbol]

Dominic

I live in Boston and Classic Wines had been an importer of your ports for a long time. When did that start and end?

[Al B.]

Dom

A light-hearted question. As you read our questions and compose your answers, do you have a glass of port on hand? If so what is it? If not, what was the last port you drank?

Alex

[l zuckerman]

Hi Dominic. I have been enjoying colheitas since my recent trip to Porto. I am doing a wine tasting for my wine group next month comparing aged colheitas with a its corresponding tawny. I have two questions: since we will be tasting ten bottles among 22 people what food accompanments would you suggest other than the traditional Stilton and nuts. I have seen suggestions of a cured ham. Any other suggestions? The second question is storage once opened. Do you think it advisable to store an opened bottled in the refrigerator or like Madeira, it's not necessary? Thank you for great ports.

[Roy Hersh]

Hi Dominic,

A good friend of mine, Robert Maliner asked me if I'd post this question on his behalf:

Bob wrote:
"In regards to Colheita Ports are they at their best when opened soon after bottling or do they improve with age? I am trying to learn more about Colheita — in the past I only drank Vintage Ports, but now find Colheita exciting. They seem to be better than a Tawny port of a similar age."

Thanks for responding to him when your time permits.

Sincerely,

Roy

[Tolga Acar]

Hello Dominic,

If you can, I'd like to hear the story behind Midnight Port. Especially, what triggered the introduction? What kind of uptake have you observed? And, finally, is it here to stay?

- Tolga