Essential Business

Guedes cousins invest €7 million in Algarve wine production

 In Wine

The Algarve conjures up images of golden beaches, package holidays, golf courses, sardines and seafood, but the words ‘local wine’ don’t really resonate. That is why it comes as a surprise that Portugal’s largest producer of Vinho Verde (green wine), Quinta da Aveleda, is investing €7 million in the Algarve to produce rosé wine.
The wine producer’s joint-CEO Martim Guedes says the company has part-purchased Quinta do Morgado da Torre on the outskirts of Portimão.
The Quinta do Morgado da Torre wine-producing business was started in 1998 by entrepreneur João O’Neill Mendes but is now branching out into rosé production, in part because of the popularity of these wines at home and also because of the increasing recognition Algarve wines are gaining in Portugal and worldwide.
Martim Guedes admits he had never thought seriously about wine from the Algarve until around two years ago. “We had a look and were surprised at the wine quality from this region, which few knew about in Portugal.”
Guedes and his joint-CEO cousin António explored wine production further and discovered that the limestone and clay soil, the warm but not excessive summer temperatures, characterised by cool fresh Atlantic breezes and a Mediterranean summer, produced great wines.
The result is regional grapes that are sensible rather than inspired with grape varieties such as Negra Mole (‘black soft’), Castelão, Roupeiro, Boal Branco and Manteúdo capable, if cultivated correctly, of making crisp, fresh wines.
Guedes says that he and his partner also chose the Portimão area because it is part of just four DOC wine-producing sectors in the Algarve.
The site chosen was the Quinta do Morgado da Torre vineyard in Alvor, which has 15 hectares of vines and a further 65 hectares for exploration for new vines.
The estate had been in the hands of the O’Neill family since 1865 and at its height had over 100 hectares of vineyards.
In more recent years, it has concentrated on red grape varieties while the rest of the estate was planted with cereals, cork, oaks, citrus, and almond and carob trees.
Quinta da Aveleda, which produces such iconic household names like Casal Garcia, probably Portugal’s most famous and best-selling fresh white and slightly sparkling wine Vinho Verde, has used its own capital to inject into the project.
“We did not leverage,” says Guedes, whose company had a healthy €38 million turnover in 2018 of which Vinho Verde pulled in a hefty €19 million slice of the pie.
“Since this is still exploratory (in the Algarve), we were rather limited in production with not even 100,000 bottles (20,000 of which were rosé) this past season, but for 2019 we’ll double that to 200,000 bottles and aim for 300,000 in 2020,” says Guedes.
The wine producer says that, initially, the Algarve wines will be tested and produced for the local Portuguese market, but that Quinta da Aveleda has high hopes to work the international market with these Algarve wines in the next two or three years.
The cousins will experiment with different grape varieties but will also produce staples like Alicante Bouschet, Sauvignon Blanc and Moscatel Roxo.
“We will be producing 300,000 bottles in the Algarve by 2020 with a view to selling in Germany and the nordic countries, the United States and Canada,” says Guedes, adding that there is likely to be interest from France given the sizeable 1,720,000 strong community of Portuguese and descendants.
Guedes says that the Alvor vineyard will produce reds, whites and rosés although the emphasis will be on the latter.
Up until now, Quinta da Aveleda, based at Penafiel, near Porto, has been producing 19 million bottles of Vinho Verde and white wines annually, such as Aveleda Vinho Verde, Quinta da Aveleda classic from Loureiro and Alvarinho castes grown in granite soils, the Aveleda Alvarinho in Portugal’s Minho region, with Alvarinho varieties grown in granite, shale and loan soils and the Aveleda Family Reserve, an Alvarinho white fermented and matured in French oak casks, which combine tones of tropical fruits and minerals.
The family estate has been in the Guedes family since the 17th century, dominated by a stately mansion in the Portuguese Romantic style, with its famous Manueline window taken from a palace where King John IV, the father of English Queen Catherine of Braganza of tea fame, was said to have been proclaimed King of Portugal in 1640.
As well as producing wine in the Douro, it also has vineyards in the Bairrada area of Beiras region of Portugal, but the Algarve provides a fresh business opportunity.
“The Algarve site is perfect, there’s plenty of water, it’s protected by the Monchique hills and has echoes of Provence with its terroir, clay soil and sunny climate, not to mention the potential of the hundreds of thousands of tourists that flock here each year,” says Guedes.
Currently only 3.5% of wine sold in the Algarve, much of it to overseas visitors, is actually from the region, of which Casal Garcia is a firm favourite among holidaymakers and Guedes sees a clear opportunity, especially given that tourism is no longer seasonal but increasingly all year round.
“It all started when Filipe Vasconcelos of Morgado do Quintão wine estate (Lagoa) invited us to try some Algarve wines and we were surprised at their quality. The Algarve can bring to our portfolio of existing Vinho Verde a number of different and complementary wines, which we will promote through the HORECA channel which showcases wines from the Algarve region,” he says.
The duo has big ambitions beyond the region and have already had interest from both the US and Canada. They already export two-thirds of their production overseas to the US and Germany.
The other project is to develop wine tourism and Guedes says that, since the region needs to diversify its offer beyond beach and golf, it will channel some of its investment in wine tourism.
“It’s still early days and Algarve wines need to gain consistency but, with investment in the right grape varieties and marketing, we think we have the knowledge and experience to produce top-notch wines and put the Algarve region firmly on the international wine map,” Guedes concludes.


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