Real Madeira is made only on the islands of Madeira, a Portuguese possession far off the western coast of North Africa. This wine undergoes a high temperature aging imitating a long sea voyage through the tropics. It was hugely popular in warmer regions before refrigeration because it is practically immortal in the bottle and even lasts well after opening. From this legacy it is called for in many European recipes as well as those from the U.S. Southeast and Brazil.
This is a fortified wine with neutral grape spirits added at the end of fermentation or at various stages during fermentation depending on the sweetness desired. Alcohol is about 18% by volume. Dry Madeira is fermented off the skins and will be amber in color. Sweet versions are fermented on the skins to balance sweetness with acid and tannin, so they will be red. It is the dryer Madeiras that are normally used for cooking.
Two classes of grape are used. The "ordinary" grapes are Tinta Negra Mole and Complexa. The "noble" varieties are Sercial, Verdelho, Boal / Bual, and Malvasia / Malmsey. Labeling rules are different for these two groups as explained below.
Madeira for cooking is made from the "ordinary" grapes, aged for only 3 years and labeled "Finest". Real Madeira is very scarce here in Southern California and likely to be expensive, but the historic San Antonio Winery of Los Angeles makes a light California Madeira which is affordable and quite suitable for cooking. Subst: an Amontillado (medium dry) sherry or dry Marsala are acceptable.
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These levels carry the names of the variety of grapes used. Wines made from Tinta Negra Mole and other grapes may not use this system but must be labeled seco (dry), meio seco (medium dry), meio doce (medium sweet), and doce (sweet). Wines made with at least 85% of the "noble" labeled varieties use this system.