Liv-ex interview with Chris Blandy: a different Madeira

Left to right: Francisco Albuquerque (winemaker) and Chris Blandy

Chris Blandy is the CEO and seventh-generation head of the Madeira Wine Company. The Blandy Family have been producing Madeira wine since first coming to the island in 1811. Chris joined the family business in 2007, after completing his studies in the UK and working in Portugal and the USA. Liv-ex’s Sarah Phillips caught up with him to find out more about Madeira’s wine production and Blandy’s future business plans.

How did Blandy’s Madeira start?

The company was established in 1811 and quickly developed into a shipping business because the geographical location of Madeira makes it the perfect drop off point. John Blandy was the founder. His letters to his siblings, who were in the UK, the USA and Brazil contain information about shipping, construction, strategies on market development and relationships with suppliers.

Do you still have any of these historic documents?

We do. When we celebrated our bicentennial in 2011, we published a book based on these historical archives. It involved all the letters, stories and discussions between family members. It was not merely a timeline of what we have done in the past 200 years.

What do you attribute this longevity and success to?

Diversity – we have been involved in tourism, shipping, media. The families who did not diversify quickly enough either left the island or gave up their shareholding of the Madeira Wine Company.

What are some of the challenges you have faced?

We set up the Madeira Wine Company in the beginning of the 20th century, which was probably the bleakest time for us. The First World War, Russian revolution and the US prohibition had a huge impact on the business and on our two largest markets – Russia and the USA. Following this, we did not have the critical mass to find new markets or to recover quickly enough.

People’s taste also changed. In fact, the notion of Madeira wine as a drink associated with cooking originates in the 20th century. Due to high volumes, producers were trying to ship Madeira wine just to keep afloat, often at the lowest possible price. Fortunately, we had enough foresight to continue growing and storing our wine stock…

I read a quote, which said Madeira is one of the few wines that has not changed since it became popular over 200 years ago.  

I think it has changed drastically. The quote was cleverly relating to the fact that you can drink a Madeira wine that is 200 years old and still be as amazing as the wines we are releasing today.

How has it changed?  

First, we changed the way we have been looking at our wine business. We completed three projects with universities to understand what factors directly determine the end-product and how our wine is constantly developing.

Scientific research is very important to us. You need to understand wine down to molecular level, otherwise, you lose opportunities. We invested in a new winery and tanks and we are focusing on sustainability. Putting all of these things together, the wine we are producing today is massively different to the wine we were producing 200 years ago and actually radically different to what we were producing even 15 years ago.

We implemented a new way of working called Kaizen, which ultimately means continual improvement, making it as efficient and cost-effective as possible.

Is that a quality or a stylistic change?

Both actually. No winemaker has reached a state in their time in the wine industry when they think their wine is the best it can be. There is no limit to how much we can learn about vineyard management and winemaking.

Have there been any changes on the island that have influenced your wine production?

There has been a social shift in Madeira and Portugal. The younger generations are moving into the city or abroad. At present, there are about four or five times more Madeirans living outside Madeira than there are in Madeira. This is a very important shift, because agriculture is tough manual labour, not suitable for the older generation.

Moreover, Madeira has changed radically since Portugal joined the European Union. There used to be high levels of poverty and illiteracy. Accessibility to the island was often a disaster. Getting wine into the winery was tough, and you could not always guarantee the quality of the fruit. Nowadays, things have changed and accessibility has improved.  It takes about an hour to get from the winery to the furthest away vineyard that we buy from, whereas before it might have taken five to six hours. When the Symington Family of Oporto took over the majority shareholding of the company in 1989, they brought with them a whole range of updated winemaking techniques that allowed the quality of our wines to rapidly develop. Up until 2011 when my family bought back the majority of the company, they had set in place a successful global distribution system that allowed our wines to be in 38 countries around the world.

What is your relationship with the growers? What’s your level of input with the harvest?

Depending on the year, we collect grapes from 500-600 growers around the island. We know most of the big growers and normally negotiate with them directly rather than going through agents.

Do you think you will increasingly grow your own wine?

We will have to if we want to survive.

Is that a trend or is it specific to the Madeira Wine Company?

I think there is going to be a natural change in the next ten years with the Madeira wine producers. You need to invest in a positive way, not just in marketing, but vertically down to growing grapes.

Do you think acquiring more land will change the grapes that are grown? Will we see more white varieties?

I would love to see more white varieties. Right now, there’s an imbalance as Tinta Negra represents about 80% of everything grown on the island. It’s the only red grape that we have, with the exception of the Bastardo grape, an extremely rare varietal.

During the 20th century, a lot of growers ripped up white varietals to plant Tinta Negra because it is a low-cost production, high yielding grape. Unfortunately, there’s an imbalance as well between the way we see the sector and the way the government sees the sector – not least, Madeira being a small island. We have spent twenty years discussing and negotiating with the government for the right strategy for the vineyards. An increasing number of producers are starting to understand that associations with white varietals and quality are very strong. The vineyards that we have planted are 100% white. Other producers have also done a great job planting.

What is your relationship with the other producers? Are your making joint efforts to promote Madeira wine?

We work well together. There is a general understanding about what we need to do. Sometimes interests don’t line up, but in terms of promotion, I think we’re all going in the right direction. In terms of dealing with the government, I think we probably have slightly different views, but that’s natural.

Still, sales have been growing year after year, so we’re gaining growth. We are a very small community, and a very small wine country as well. All of us are producing maybe around 3million liters (4million bottles). When you compare that to Port that is producing 85million liters, it is a drop in the ocean.

Is that a selling point as well because it’s quite boutique?

Everything about Madeira is a selling point. We are very lucky to be in this position.

How important is the Madeira Wine Institute and how do you see its role?

It’s a certifying controlling body. Our relationship is a lot better than it was because now there is an understanding that dialogue is hugely important and we are all there for a common good.

And how important is the European Union?

The European Union is hugely important. Without the EU, we would not have wine trade. They subsidise everything from growing to selling. Out of seven producers, perhaps only three would survive.

Is there a risk that the wine industry is too reliant on the EU?

I can’t speak for the others, but one of our key strategies is to survive without subsidies. 2020 is our limit. Our steps towards efficiency are being made to be able to survive well without subsidies after that date.

Would you consider a pre-release model like in Bordeaux? How are you planning to generate capital?

Cash flow is a huge problem for Madeira wineries. Business models tend to be hugely capital intensive. But there are a couple of things we have been considering. With the right techniques, we could produce “three-year-old” Madeira in about a year and a half. We have spoken to the Wine Institute and we have been able to prove it.

However, our main option has been wine tourism, as Madeira is the ultimate tourist destination. Still, wine tourism does not exist to the level it exists in Napa Valley. We get about 150,000 people a year.

That is busy.

It’s very busy, and it’s a great way to educate people not only on the wine, the brand or the family, but on the whole history of the island of Madeira. This helps with cash flow. The final strategy is table wine. We have been doing it since 1992. It is all Rosé, made with Tinta Negra. We sell between 18,000 and 28,000 bottles on the island.

To tourists or locals?

Both.

What does it retail at?

€6-7.

Do you have any plans for table wine?

We have been thinking of lining up its quality with that of Madeira wine. We made a big investment in tanks, chillers and filtering. We have now included white wine, which also has a lot of potential.

In 2017, we produced a white wine reserve in partnership with a Portuguese winemaker Rui Reguinga, who is now consulting for our table wine project. This year, Rosé is looking great, white wine is looking fantastic, the Reserva has a lot of potential and will be in barrel for six months. We are also doing sparkling.

Sparkling white or rosé?

Both. We did an experiment with 300 bottles last year.

How are you labeling the table and sparkling wines?

A separate label called Atlantis.

Do you sell it outside Madeira?

We send a couple of pallets to the UK and Japan every year. Portugal is a growing market, and we are trying to get into the USA. Our wine is great for investment purposes and will benefit from some time in bottle.

Where do you see the greatest potential market for fortified wine?

The USA. It is the biggest market that we have had. In terms of value, it became the number one export market, overtaking France. The UK is a more mature market but does not necessarily get as impressed with Madeira’s history, which is an important part of the US passion for wine.

Madeira wine doesn’t yet have the global recognition, but it is getting bigger. More often than not, customers who try it for the first time think: “What have I been missing?”

Is your focus mainly on premium wines?

You have to focus on the premium. We tend to look at 10- or 15-year-old wines and above when talking to journalists and trade professionals.

Which is the oldest bottle you have tasted?

1746. It was spectacular. The amazing thing about Madeira is that you can taste these wines. If you treat them with some respect, you don’t have to be as careful as an old vintage of Port or Bordeaux.

How do you store them?

Always standing upright because the acidity in the wine is going to eat through the cork quicker than the cork is going to dry out. Another key thing is that you have to open it well in advance of drinking it – days, sometimes weeks.

Everything about Madeira is the opposite to everything else. When did you taste the 1746 wine?

I tasted the 1746 at a collectors’ tasting in New York in 2012. My dad was originally invited but offered me his place. I asked him to bring one of the bottles he had in his cellar and he asked me to pay for it. He gave me a 10% discount on the market price of €3,000. I expensed it directly to the company!

I got the bottle two weeks before the tasting and immediately headed to the winery to open it with the winemaker. The wine was “dead” when we smelt it. We cleaned the bottle, put the wine back and kept it open until the tasting. There were eighteen wines, the oldest of which was 1746. Mine was in the middle. It was an amazing experience.

We went through flights of three, discussing each one. Despite it being an early-morning tasting, no one was spitting. There was a guy, who halfway through the tasting, said: “This wine reminds me of my grandmother.” He started describing in great detail how the wine made him reminiscent of being in the kitchen, his grandmother opening the oven and him smelling a hot apple pie. These old Madeiras get into your emotional memory. I’ve even seen people cry at tastings.

It is also amazing how fresh the wines taste, despite considerable ageing. As a rule of thumb, you should open them up one day for every ten years that the wine has been in bottle. You would need to know the bottling date more or less, but even if you do not, open it up two weeks beforehand. Give it some time. Oxygen is your friend – it will help with the aromas. Let it breathe and enjoy it.

So your wine was “dead” when you tasted it two weeks before. What was it like at the tasting?

It was amazing. It was a love-hate wine. It smelt like spearmint gum, but it was great. Some people thought it was the wine of the tasting.

Do you have any plans for Miles Madeira?

We are relaunching it. It’s quite small compared to Blandy’s, which represents 70% of our turnover. With Miles, we will be focusing on three-year old up to vintage Tinta Negra. It is still quite rare because vintage production of Tinta Negra was only allowed six years ago, but it is very exciting. Its use in cocktails makes people very interested in it, especially in Europe. I shied away from it initially, but now it is something we are embracing with a brand like Miles.

From the perspective of a producer, what is your view on the role of Liv-ex?

It is a great way for people to understand where a particular category of wine positions itself as investment, as well as how wines vary. This is very important in the wine business – seeing how the secondary market works.

Do you think there is a scope to make Madeira more actively traded and collected? Is this something you want to happen or do you prefer seeing your wine go directly to the end-customer?

I don’t think Madeira has the size or the exposure yet. Provenance is also an issue with old Madeira wine. People get very excited when cases dating back to the beginning of the 1900s appear, but they don’t really question the source. There is a lot of work to be done to protect and certify these old wines. A lot of families hold stock of some really old wines that are well-made and from the said year but if they haven’t allowed people to certify these wines, the wines cannot be legally sold. We also face the same problem as a company.

With fortified wine, we have an obligation to ensure that the real stock is in line with our system stock. We have to improve the way we look at old wines before we start looking at the secondary market. This is already happening to some extent, led by auction houses such as Christie’s and Hart Davis Hart.

You often see articles on Bloomberg, for instance, about old bottles of Madeira being discovered and auctioned for thousands of dollars, which reinforces the idea that Madeira can age much longer than any other wine.

I am a bit cynical about miraculously appearing bottles of Madeira. Still, I see it as an opportunity for us as a sector to understand this problem and try to resolve it.

We are launching very small quantities of vintage Madeira – about 1,000 bottles. We are in a process where we want the whole Madeira wine sector to grow, so we release these wines through consumer and auction sales. This creates a halo effect, which allows people to upsell them to the premium categories.

Any final words on Madeira?

To sum up, more happens in the ageing room than in the vineyard. We don’t talk about vintages but about ageing time. In our most recent scientific project, we put sensors in each one of the ageing rooms, where we have about 3.5million liters of wine – some as young as 2018, some as old as 1920. We want to understand how climate change is going to influence the style of the wine, which in turn will inform our future decisions. We need to consider where the right location for our ageing rooms will be in ten or twenty years’ time, as we expect different humidity and temperature levels. We are going to see a lot of variation.


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