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This paper aims firstly to examine the innovation within the cluster of a traditional European wine region (Region of the Douro -- Portugal), characterized by the so-called model of terroir in wine, an economic structure supported by a large number of growers, small and medium-sized wineries and high regulation throughout the productive chain, which clearly emerges the question of tradition versus innovation. This research used grounded theory method and the results show that traditional companies remain in a region whose legislation hinders the radical innovations, but at the same time, ensures quality values. There is a transfer of traditional values of a specific product, the port wine, for new products recently launched in the market, and simultaneously a transfer of value-added of the port wine to the value of family ties with the production process and with the land of the Douro Region. [ABSTRACT FROM AUTHOR]