Con vino y esperanza todo es posible (with wine and hope, anything is possible). The Spanish proverb sums up the world’s love affair with wine – an industry forecasted to reach more than 30 billion liters by 2020 (TechNavio, 2016). However, global warming looms large, threatening to redraw the global supply map. Optimists have pointed out that the exciting possibilities of wine from northern regions (who’s ready for Scandinavian wine!), but for grape varieties central to regional industry and culture, changing temperatures could mean entire wine growing regions becoming obsolete.
Average temperature and growing season length directly influence grape ripening and fruit quality. Growing seasons average approximately 170-190 days, and the specificity in climate and geographic traits required (exhibit 1) means that wine grapes are more susceptible to climate variability and long-term climate change than other commodities. Further, climate can dictate taste; cool climate grapes produce wines with lower alcohol and a lighter body, while hotter climates tend to produce bolder wines with higher alcohol. (Jones, 2017). The UN Panel on Climate Change projects a 2C warming scenario, while researchers at the World Bank have modeled for a 4C increase – changes that will have a drastic impact on types of grapes grown worldwide (Gledhill, Hamza-Goodacre and Low, 2013)
Nederburg wine company is located in South Africa’s Western Cape, a renowned growing region bordering the Atlantic and Indian Oceans. Nederburg has produced wines for over 225 years and is recognized as one of the top South African Wine producers.
Company actions – product innovation upstream
To combat future temperature increases, Nederburg growers have introduced grape varieties new to Western Cape region, including the hybrid Chambourcin grape. Hybrids are mixes between different grape species (i.e. European and American species), and have the potential to be more robust – one of the most successful hybrids has been the Vidal Blanc, a grape which is resistant to cold weather and is used in Canada to make ice wine. (Dami, Ennahli and Scurlock, 2013). Chambourcin is a well-known hybrid in the U.S. and Australia, for its ability to withstand extreme weather conditions – important for dealing with extreme variance in the medium to long term. Nederburg is running tests with these unusual grape varieties, experimenting and planning for future vintages. These grapes are run in smaller batches concurrently with the traditional grape crops, to observe their comparative yield and ripening time. (Augustyn, 2017)
In the short term, Nederburg’s viticulturist, Bennie Liebenberg, highlighted that the winery has been experimenting with more traditional Mediterranean grapes suited to warming temperatures for more than a decade. Both Tempranillo and Graciano (exhibit 1) were planted in 2004, and Nederburg previously introduced Italian varietals such as Sangiovese, Nebbiolo and Barbera. From these, Nederburg developed an Italian blend that was the first of its kind to be launched in the Western Cape. (wine.co.za, 2017).
Nederburg’s long term change in grape choice impacts Nederburg’s entire business model given demand depends on carefully curated wine tastes. Nederburg has had to update their sales strategy and attract different end consumers and distributors for their updated products.
Potential improvements – rotating supply schedules/mechanical upgrades
Another potential solution to deal with projected temperature increases is altering the supply chain timing – rotating the growing and picking season. Some competitors in other Southern hemisphere countries, such as in Chile, are picking their grapes a full month earlier than traditional seasons. The length of the production time is adapted to get the right quality. Vriesenhof Vineyards, a local competitor, has also shifted its production schedule: “usual to start the harvest around February 5. In recent times, harvesting is starting earlier…in 2007 the harvest began on January 23; in 2010, on January 21; and in 2015, on January 7”. (Coetzee and Adelsheim, 2016)
Finally, there are mechanical improvements growers can make to their process to mitigate rising temperatures and improve productive yield. Irrigation allows producers to manage rainfall amounts during dryer seasons, while canopy management – structuring the the vines to a greater height then taking them horizontally to ensure that the grapes are shaded – can keep the temperature of the grape bunches at ~25C even in extremely hot weather. (Coetzee and Adelsheim, 2016)
“At the end of the day, people are still going to want to grow wine in Bordeaux in the future…So, we wanted to get more information about what is happening here…Winemakers do not need to be complete slaves to what the environment does.” (Bland, 2016)
As climate change affects wine production – should wineries alter their products (South African wineries producing “Italian” reds), or pour more money and resources into producing regional classics?
Will increased variance (higher likelihood of crop loss) and average temperatures (need for process innovation) drive an exit of small-scale wineries and consolidation into national/international growers? How should Nederburg plan for this?
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Augustyn, W. (2017). Nederburg: Carrying on into the future – Wineland Magazine. [online] Wineland Magazine. Available at: http://www.wineland.co.za/nederburg-carrying-future/ [Accessed 16 Nov. 2017].
Bland, A. (2013). With Warming Climes, How Long Will A Bordeaux Be A Bordeaux?. [online] NPR.org. Available at: https://www.npr.org/sections/thesalt/2013/05/06/181684846/with-warming-climes-how-long-will-a-bordeaux-be-a-bordeaux [Accessed 16 Nov. 2017].
Bland, A. (2016). An Upside To Climate Change? Better French Wine. [online] NPR.org. Available at: https://www.npr.org/sections/thesalt/2016/03/21/470872883/an-upside-to-climate-change-better-french-wine [Accessed 16 Nov. 2017].
Coetzee, J. and Adelsheim, D. (2016). Climate Change: Field Reports from Leading Winemakers. Journal of Wine Economics, Volume 11, pp.5–47.
Dami, I., Ennahli, S. and Scurlock, D. (2013). A Five-year Study on the Effect of Cluster Thinning and Harvest Date on Yield, Fruit Composition, and Cold-hardiness of ‘Vidal Blanc’ (Vitis spp.) for Ice Wine Production. HortScience.
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Lee, H. et al (2013). Climate change, wine, and conservation. Proceedings of the National Academy of Sciences of the United States of America.
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wine.co.za. (2017). Nederburg plants new vines in old soil to commemorate its history. [online] Available at: http://www.wine.co.za/news/news.aspx?NEWSID=29893.