After a difficult year, marked by periods of extreme rainfall over this past winter, wine production in Portugal’s Algarve region is expected to rise by between 12% and 15% in the 2026-27 period, reaching roughly 1.8 million litres. If the forecast holds, the region will recover much of the 20% fall recorded the previous year, in an encouraging step in the right direction towards its 2024 peak of almost 2 million litres.
The region now has about 60 active wine producers, compared with perhaps 35 to 40 when Sara Silva became president of the Algarve Wine Commission back in 2019. New vineyards and new producers are helping to expand the sector, says Silva, while the industry has increasingly shifted away from its old dependence on cooperatives, and towards independent producers and private investment.
But, the Algarve’s producers have a doubly difficult task when looking at the broader landscape in which they find themselves, in comparison to even just ten years ago. The industry must reckon with whether it can persuade people to drink wine, to visit vineyards, and to value the field’s contribution to this region’s heritage, in a world where wine itself is becoming a more difficult proposition.
The global figures are sobering. According to the International Organisation of Vine and Wine, worldwide wine consumption fell to an estimated 208 million hectolitres in 2025, 2.7% below the previous year and 14% below 2018. Younger generations appear less attracted to wine, while concerns about alcohol and health are changing drinking habits. At the same time, producers face rising costs, and a climate that is becoming harder to predict.
So an increase in production, on its own, is not necessarily good news. There is an obvious temptation to celebrate growth: more vineyards, more bottles, more visitors, more exports, more money in the pockets of the vintners. Wine has had to become more than a simple commodity in its own right, with producers focusing more heavily on vineyard visits and seasonal tourism, driven by the willingness of consumers to pay for something more than just the liquid in the bottle.
Around 70% of the region's wine is consumed within the Algarve itself, through restaurants, hotels, shops, and tourism. That makes the Algarve’s wine industry unusually dependent on the region's tourist economy. Yet it also presents an interesting opportunity, with millions of people arriving in the Algarve each year, already eating, already drinking and, increasingly, looking for experiences rather than just a souvenir to take home. “Our potential for success is always closely linked to tourism”, Silva says.
For some Algarve wineries, wine tourism already accounts for around half of their turnover. Visitors are welcomed at vineyards and wineries throughout the year, rather than only during the summer holidays. The Algarve Wine Tourism route, together with initiatives such as the Algarve Wine Road Experience, is just one example of producers attempting to connect wine with the wider web of tourism, attaching it to food, accommodation, and rural tourism experiences. A sensible strategy if global wine consumption is declining, as the statistics appear to show, the answer cannot simply be to produce more wine in the hopes that someone buys it.
Lagoa, Portimão, and Lagos have traditionally been regarded as the heart of Algarve wine production. Yet the eastern Algarve, the so-called Sotavento, now leads in volume, largely because of the presence of Casa Santos Lima, the region's largest producer, Silva explains.. Meanwhile, more than 70% of the region's producers are still concentrated around Lagoa, Silves, and Portimão.
She adds that tourism has brought enormous economic opportunity to the region, but dependence on tourism also creates vulnerability. If 70% of locally produced wine is consumed locally, then a downturn in tourism inevitably becomes a problem for wine producers. Her answer to the issue is that the relationship between the two must be deepened, while making the product valuable enough to stand on its own.
The strength of the region’s wines may lie precisely in being uniquely Algarvian, laced together with their own varieties, producers, food traditions, and an increasingly confident wine culture. The fact that the Algarve’s wine sector has grown from a relatively small base to 60 active producers in a short period of time is evidence that something is clearly taking root.
Source: Barlavento
Photo credit: Birch Photography
