Keeping it in the family
- Monday 1 April 2002
Centuries after the port industry was born, most companies are still family businesses – only one multinational company is left. PETER COBB meets the families following in their ancestors' footsteps.
Two multinational drinks companies have ended their flirtation with the port industry. Diageo sold Croft and Delaforce to Taylor's, while Sogrape snapped up Sandeman from Seagram. Both are family controlled. Though several port companies are foreign owned, only one – Cockburns – remains within a multinational I have to admit an interest. For 40 years I was connected with Cockburns. I joined as a fresh- faced youth while it was still a family affair – highly privileged, too, as the family involved was my own. Before I had time to get my feet under the desk, we were bought by Harveys. Harveys became part of Showerings and merged with Allied Breweries. Allied acquired and disposed of Lyons and finally landed up with Domecq. I reckon I know a thing or two about multinationals and port.And it's not all bad. Throughout the 1960s and 1970s, Harveys were the envy of the wine trade. In 1969 marketing director Michael Jackaman, with his denim jackets, Beatle haircut and button-down collars, launched Cockburns Special Reserve – and altered the face of the port trade for ever. Jackaman later traded his denims for a suit, and became chairman of Allied, while the baby he created became the best-selling premium port in the world. Commercial success led to investment in land and vinification. 'We bought 243 hectares of vineyard in the Vilariça Valley to the far east of the Douro, and introduced modern viticulture,' says general manager Jim Reader. 'We had to have enough quality fruit for Special Reserve. We also ran a 15-year research programme, to develop and clone the best grape varieties and refine our winemaking. Later we bought Quinta dos Canais. It was completely replanted and a new winery built at the quinta. We couldn't have afforded any of this on our own.'
Point made, but port has prospered anyway over the last 30 years. There have been five exceptionally fine vintage years and, thanks to greatly improved viticulture, several others good enough to warrant Full House declarations, and some excellent single-quinta wines too. This has spurned a whole new market in North America. The impression is that it is largely the family companies that have expanded their business, introduced new products, invested in vineyards and updated their wineries.Prime among these have been the Symingtons. Six family members are in the business, and they are careful to ensure that they are backed by strong local management. They own their importing companies in the UK and US, and have a majority stake in such bankable Madeiras as Blandy, Miles and Leacock. In partnership with Bruno Prats, former owner of Château Cos d'Estournel in Bordeaux, they are developing Douro table wine. But their main concern will always be port.
In 1971 they bought W&J Graham to join Dow, Warre and Smith Woodhouse, and in 1989 added Quinta do Vesuvio, now a vintage brand that is made, bottled and stored at the quinta, and sold at a premium, even to Grahams. The family has acquired other properties, built a huge new winery, and revitalised interest in aged wood port by creating Warre's Otima 10-year-old tawny in clear half-litre bottles. Taylor's has not let the grass grow under its feet either. From being a small, idiosyncratic business a generation ago, it is now among the biggest. In Taylor and Fonseca it has two pre-eminent vintage port brands, both of which took America by storm following the maximum 100-point rating by Wine Spectator for its 1994s. Now the shrewd purchase of Croft and Delaforce gives it two more that, as managing director Adrian Bridge says, 'we can offer at more approachable prices'. Bridge is also glad to get the Croft Quinta da Roeda back into the fold. One of Taylor's partners gave the property away 100 years ago, as a wedding present. At the other end of the scale it has a company called Romariz operating aggressively in the price-sensitive countries of continental Europe. It is not afraid of taking risks – a year ago it stunned its competitors by allowing UK supermarket Safeway to cut the price of its LBV by half. Any concern in the Taylor camp can't have lasted long: 30,000 cases were reputed to have been snapped up during the two weeks that the promotion lasted.
From acorns to oaks
The Guedes family's interest in port was provided initially by Fernando Guedes having spent 25 years as book-keeper at Martinez Gassiot. He left in 1942 to set up Sogrape and launch Mateus Rosé. Now his son and grandson have brought Sogrape from nowhere to become one of the biggest global players in port. They acquired Ferreira in the 1970s and Offley in the 1980s, the number one and two brands in Portugal. Now Sandeman will give them an international dimension, including outright leadership in the US. With Mateus still the star in its crown, Sogrape own the world's only two truly international wine brands.'We have yet to define our ultimate strategy for port,' says Salvador Guedes, 'but Sandeman gives us an incentive for further investment. In a sense, it'll be “re-investment” because we're aware that, in the UK particularly, Sandeman is not as dominant as it was. We will be concentrating on Founder's Reserve, and particularly Sandeman's reputation for fine vintages.'
But the most courageous happening in port has come from the opposite end of the spectrum. This was Johnny Graham's decision to start his own business. He was still a schoolboy when W&J Graham was sold. Having married Caroline Churchill, and duly served his apprenticeship in the trade, he opened the doors of Churchill Graham in 1982. Initially it was not an easy ride, and it still may not be. Before you sell a single bottle, you must have at least three in stock, and anything you ship must have a minimum age of three years. A shipper's armoury will also include aged wines, so the capital required to start a port business is awe-inspiring. Luckily help was at hand in the form of Graham's two brothers. Anthony, a successful trader on Wall Street, sold debentures to like-minded friends, while William, a partner in Price Waterhouse, Brazil, weighed in with financial know-how. Johnny himself is a highly respected taster, while Caroline's PR value goes far beyond the use of her maiden name. Twenty years on, they own Quinta de Gricha and are in partnership with Frederick Wildman, the well-established wine importer in the US. But there is still much to be done. Graham admits they have yet to achieve 'first division' status for vintage. This is set to change. 'By 2010,' he says, 'we will be considered one of the leading vintage port houses. What we produce will be based on the wines of Gricha and another property we have bought in the Rio Torto Valley. This is the finest area in the whole of the Douro. Gricha will do very well for us as a single-quinta wine as well.' This will, he thinks, have a ripple effect on Churchill's unfiltered LBV, vintage character, 10- and 20-year-old tawnies and even old white port.
Does he plan to pass the business on to his children? Graham will not be drawn on this point. 'We are a small company, and it's important that we run it professionally. We know exactly where we want to be in the future.' Which means being treated with the same reverence as W&J Graham. But not being part of Allied Domecq.
Peter Cobb is a former director of Cockburns.