Is This Once-Iconic Portuguese Wine’s Affordability Now Its Biggest Problem?

For the average mainstream drinker, fortified wine has long been out of fashion. And with all the cultural shame currently being dumped on both alcohol content and sugar — two components most fortified wines contain in abundance and by design — that unfortunate reality isn’t likely to change anytime soon.

Yet within the context of this overlooked realm, there are three that have ruled above all for decades in both international fame and qualitative reputation. Port, Madeira, and Sherry, despite the rough transitional seas they continue to brave in this sobering era for all things indulgent, remain the A-list celebrities in the niche domain of fortified offerings.

However, tucked just below Portugal’s jewelbox capital city of Lisbon lies a fortified wine that, while now languishing on the D-list of global popularity, was once a royal toast of Europe. After an eternity of obscurity, it’s inching toward a comeback against all odds and has steadily made strides in the international market as of late, with sales doubling over the past couple of decades.

At first glance, with its accessible pricing and seemingly ideal origin location, one might think Moscatel de Setúbal is favorably positioned to once again climb the ranks. But facing a shrinking fortified market, as well as surrounded and outshined by the three most bankable wines of the genre, does the faded star have the slightest chance at pulling off a Cinderella story and regaining its elite fortified status?

The Third Wheel of Portuguese Fortified Wine

Sherry, of course, belongs to Spain. Port, Madeira, and Moscatel de Setúbal? That pioneering former empire of high seas exploration and trade: Portugal. All are positioned directly on the Atlantic Ocean, having naturally evolved to leverage traditional oceanic trade routes.

The whole historical point of fortification with grape spirit was to halt fermentation, thereby bolstering the final product with both residual grape sugars and a backbone of higher ABV (around 18 to 20 percent, more or less). Both of these attributes served as natural preservatives on long ocean voyages to major export markets like Britain, the U.S., and other ports far afield. During the journey, the wood-casked wines would change in various ways depending on the particular route each product took to its most popular market. These variables — when combined with the terroir of each specific region, its grape varieties, and its unique winemaking traditions — begat the different styles of Iberia’s fortified wines as we know them today.

The simplified elevator pitch for Moscatel de Setúbal is to think of a Tawny Port, but instead made with highly aromatic Muscat grapes with an unusually long soak on the skins. This produces a synergistic alchemy with flamboyant grape varieties Moscatel Graúdo (Muscat of Alexandria) and Moscatel Galego Roxo (a purple-tinted mutation of Muscat Blanc à Petits Grains) meeting oceanic salinity. Add years to decades of aging in wood, and the result is essentially a sweet, fortified, ocean-kissed, barrel-aged orange wine.

Entry-level examples — which can be found for under $15 to $20 in the U.S. — generally range from two to 10 years old, with higher age statements like 20- and 30-year, and single-vintage bottlings, filling out the middle and top tiers. Despite their rather scarce availability in the U.S. currently, even coveted older age statements will seldom crack $100. Better still, they can be found at about half the price when visiting Portugal.

But where does Moscatel de Setúbal fit into Western Europe’s fortified royal family? “It’s kind of the stepchild of fortifieds in Portugal,” says Chris Saraiva, co-founder of Brands of Portugal, a U.S. importer dedicated to Portuguese wines. Moscatel de Setúbal is the deserving but forgotten Kevin McCallister of the bunch, frequently left home alone while its siblings strut around the globe. “[It] has always been a wine that was consumed domestically, unlike Port and Madeira that had very strong export markets,” adds António Soares Franco, co-CEO at Setúbal’s cornerstone Moscatel producer, José Maria da Fonseca.

“A lot of it just has to do with tourism. Lisbon is the attraction from the airport, not Setúbal. How do you pull people away from that?”

In its defense, the quality and sheer deliciousness of Moscatel de Setúbal was never the issue. “I love the balance between sweetness and acidity,” Franco says. “That I think is different from Port, which lacks acidity, and Madeira, [which is] generally drier than Moscatel de Setúbal.” The beguiling beauty can capture the attention of just about anyone lucky enough to stumble across it. At a recent stop in NYC, I had the opportunity to introduce its charms to a gathering of experienced colleagues — with enthralled looks and second pours all around.

And in eras long gone, Setúbal’s Moscatel expressions were considered a must-have in many royal courts, with England’s Richard II and Louis XIV of France both ardent admirers — the latter insisting that it be poured during fine occasions at Versailles.

With such a grand historical reputation and aristocratic adulation, how did it fall so far into obscurity?

Location, Location, and Lisbon

Compared with Portugal’s two fortified superstars, Moscatel de Setúbal has a brutal list of built-in modern disadvantages. And in a cruel irony considering its spectacularly privileged location adjacent to buzzing tourist mecca Lisbon, the capital city currently acts as Setúbal’s No. 1 supervillain-saboteur — the draw of Lisbon’s dreamy streets and endless cultural charisma restricting most tourist gazes to within the confines of the city itself.

“A lot of it just has to do with tourism,” Saraiva says. “Lisbon is the attraction from the airport, not Setúbal. How do you pull people away from that?” He supposes that easier transportation could potentially help, but that begs the question of who would fund and push that initiative. “These Setúbal producers aren’t necessarily focused on tourism,” he says. “It’s difficult, because you’re not promoting an experience.” And without those tourists on site tasting the wines, it’s tough to win over new devotees to the region’s fortified renditions.

“You have to justify the difference [in price]. When [buyers] look at the price of those inexpensive fortifieds, they dismiss them. They think they’re too cheap to be good.”

To Setúbal’s credit, it’s undoubtedly a beautiful location, complete with glorious beaches and the stunning drive along the Serra da Arrábida ridge (a sort of Big Sur in miniature). But put that up against the jaw-dropping wonder and expansive majesty of both the island of Madeira and Port’s Douro Valley, and it appears inevitable that Setúbal — even with its abundant charms and fabulous wines — will struggle in comparison to convert tourist initiates over to the Moscatel de Setúbal fan club.

Even Setúbal’s easy day-trip ability from Lisbon seems to work to the disadvantage of its Moscatel.

“Being next to the capital, if there’s a curiosity of visiting, you can do that in a day trip and back,” says Lisbon-based Pedro Ramos, former Michelin-starred sommelier and current commercial manager for Clarets Portugal. “While in Douro and Madeira, you’re obligated to visit, spend at least a couple of days, and breathe it in basically.” Geographically, it’s just not a fair fight.

Limited Seats at the Fortified Table

It bears repeating that all fortified wines have a complicated road ahead, not just Setúbal’s singular rendition of Moscatel. “Fortifieds in the U.S. are losing their place,” Saraiva says. “[They’re usually] sweet and higher alcohol, which is against everything people are talking about right now.” And due to that, a grim game of market musical chairs has taken hold, with each round banishing another fortified category off U.S. restaurant lists and retail shelves.

Yet Port and Madeira have survived relatively easily — as if they’re forever grandfathered into a spot among the shrinking pool of winners. This consolidating state of affairs typically makes any other fortified wine candidate a hard sell.

“[In Portuguese culture] there’s an issue of devaluing. ‘It’s not selling, let’s reduce the price.’ When it comes to positioning yourself, this is one of the disasters. It’s one of the points that most Portuguese products don’t get, and it’s critical. … We will be selling less bottles for more money.”

Saraiva explains that many professional buyers usually have two questions that go hand in hand: “Why should I put fortified on my menu?” and “If I do, why should I put Moscatel on my menu over something like Port or Madeira?” Additionally, in another cruel irony of the current market moment, it may even turn out that Moscatel de Setúbal is sabotaging itself.

Prestige pricing is an immensely influential sales tool in today’s reality of across-the-board premiumization for survival in the drinks industry, and Port and Madeira have mastered its magic in the face of decreasing sales volume. Meanwhile, the relatively spectacular bargain presented by Moscatel de Setúbal is often met with skepticism.

“You have to justify the difference [in price],” Saraiva says. “When [buyers] look at the price of those inexpensive fortifieds, they dismiss them. They think they’re too cheap to be good.” It’s a case of no good deed going unpunished, as the wine’s all-too-fair pricing works to stymie its reputation.

Setúbal’s Slow Climb Back to Relevance

Port and Madeira have also traditionally benefited from their direct ties to British business. “Let’s not forget that the huge [advantage] Port and Madeira have is the support of the British markets in the past centuries,” Ramos says. “Unfortunately, Setúbal doesn’t share the same luck.”

A high-ranking manager (who requested anonymity) from a major Port house seconds Ramos’s point, and adds that there’s a distinct difference in not just business association, but business culture between the British-influenced approach of Port and Madeira as opposed to Setúbal’s homegrown strategies.

“[In Portuguese culture] there’s an issue of devaluing. ‘It’s not selling, let’s reduce the price,’” explains the Port house manager. “When it comes to positioning yourself, this is one of the disasters. It’s one of the points that most Portuguese products don’t get, and it’s critical. … We will be selling less bottles for more money.” So while advertising baseline Moscatel de Setúbal bottlings to broader market tiers — as an easy-breezy sip for the masses or cocktail ingredient for the mixology boom — may seem like a smart marketing play, the reality is these strategies might actually weigh on the current careful ascent of Setúbal’s premium offerings.

Franco at José Maria da Fonseca understands this dilemma, and hopes that all of Setúbal’s Moscatel producers can work toward the common goal of reclaiming its historical reputation, while letting the dissemination of entry-level products continue to happen naturally. “[Port and Madeira] have done a very good job in the premiumization of their offerings. Less Port and Madeira are being sold worldwide, but more expensive categories are seeing growth, like Vintage and LBV,” he says. “Premiumization is definitely the way forward.”

With such strong headwinds, it’s a tall order for Moscatel de Setúbal to ever fully recapture its former glory days. But as a prestige product for aficionados and serious restaurant programs, it still has a chance to reclaim its prior position on the reputational A-list of fortified stars.

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