Will Climate Change Your Wine? How Rising Temperatures May Impact Vineyards.

As climate changes, the wine industry must as well.

After one of the hottest summers on record in both the United States and Europe, including devastating wildfires in Northern California and Portugal, key winemaking regions are facing climate change in a marked way. While many wineries, such as Northern California’s Fetzer Vineyards, have taken significant steps to creating sustainable vineyards, additional steps must be taken to ensure vineyards can respond to the immediate and long-term challenges of climate change.

 

The wine industry’s production is specifically susceptible to climate change for two key reasons:

  • The production process is very sensitive to small changes in the immediate environment. For instance, climate affects type of grapes that can be grown in a certain region as well as their specific flavor profiles, the quality of wine produced and the length of the harvest season.
  • Even more so than many other agricultural products, winemaking is dependent on only a handful of regions whose climates are suitable to growing grapes. These areas tend to be concentrated geographies, such as Spain or Northern California, which means climate shifts in a relatively contained area can affect a significant share of the wine produced (see Exhibit 1).

Exhibit 1 (8)

The changing climate, notably hotter temperatures in key winemaking regions, has potential to negatively affect winemaking in the following ways:

  • Decreased wine production as rising temperatures and sea levels make traditional growing areas unsuitable (1)
  • Grapes ripening on the vines too fast, causing higher alcohol content and sugar in grapes, which can be at odds with drinker preferences for lower alcohol wines (1)
  • Shorter growing seasons with earlier, condensed harvests that force wineries to harvest earlier, produce wine faster and compress vintages (1)
  • Increased frequency of severe droughts, which reduces freshwater available for irrigation, increases water costs and can decrease the yield (5)
  • Increased frequency of fires, which can decrease yield from affected areas from destruction of vines and impact of smoke, which affects taste of grapes (7)

 

Given that climate plays such a strong role in the winemaking process, risk increases as weather anomalies become more frequent and severe. Yet, the many variables that could negatively affect production could alternatively have a positive impact. For example, hotter temperatures may allow a new region to be capable of hosting vineyards or increase the yield of a heat-friendly grape varietal.

 

Fetzer Vineyards has adopted an earth-friendly approach to winemaking and recently became the largest B Corp winery, voluntarily committing to transparently measuring and reporting on the company’s sustainability impact. The vineyard aims to increase its sustainability, with the goal of being Net Positive by 2030 (14). Initiatives focused on clean energy, zero waste, greenhouse gas emissions, and regenerative agriculture include:

  • Treating 100% of wastewater with BioFiltro’s BIDA system, which uses earthworms and microbes to naturally clean wastewater, requires 85% less energy than treatment ponds and enhances soil compost (2)
  • Reducing water use through onsite storage ponds that irrigates fields using preserved rainwater (2)
  • Reducing water rinsing and decreasing energy consumption through adopting Peracetic acid to clean wine tanks instead of water (2)
  • Leveraging digital solutions, like the Internet of Things and big data analytics, to proactively manage their water infrastructure (1)
  • Generating 80% of energy needed to run bottling facility by adding 75,000 square feet of rooftop solar panels (4)
  • Working towards 99.9% waste diversion by 2020 through coordinated efforts around composting, recycling, and reselling of used wine barrels (4)
  • Reducing greenhouse gas emissions to Net Zero through internal energy use reductions and offsetting unavoidable emissions through purchase of Verified Emissions Reductions projects, becoming the first U.S. Winery certified CarbonNeutral (3)

 

Though Fetzer Vineyards is impressively moving towards long-term sustainability, which mitigates global warming and has value as a marketing tool, the company should also focus on the more immediate challenges of climate change. Fetzer Vineyards should develop strategies for a future where growing conditions change and weather events become more severe. Tactics could include:

  • Preparing for shorter harvest seasons by increasing flexible production capacity and labor
  • Upgrading storage facilities and store rooms with eco-friendly temperature control, smoke filters and infrastructure to withstand wildfires
  • Preparing for multi-year drought conditions through investment in onsite rainwater storage tanks
  • Diversifying growing geographies through new vineyard sites beyond Northern California to decrease impact of local climate swings and increase grape varietals
  • Planting and growing new grape varietals, such as heat- and drought-tolerant grapes, to pre-empt new conditions and increase likelihood of crop yield in high temperatures
  • Adding canopies and other cooling techniques throughout the vineyard to increase shade for grapes that are more sensitive to heat and maintain water in soil

 

Continuing to invest in short- and long-term solutions to climate change and its fallout will be crucial to ensure that the winemaking industry adapts to immediate weather-related incidents and thrives in the future.

 

(792)

 

References

(1) Coleman, Mark. 2017. “Rebel With A Cause: How Fetzer Vineyards’ Regenerative Winemaking Creates Sustainable Value”. Huffpost. https://www.huffingtonpost.com/entry/rebel-with-a-cause-how-fetzer-vineyards-regenerative_us_58add12fe4b0d818c4f0a4ae.

(2) “Fetzer Vineyards”. 2017. Fetzer Vineyards. http://www.fetzer.com/water.

(3) “Fetzer Vineyards”. 2017. Fetzer Vineyards. http://www.fetzer.com/carbonneutral.

(4) “Fetzer Vineyards”. 2017. Fetzer Vineyards. http://www.fetzer.com/commitment.

(5) Horowitz, Jason. 2017. “In Italy’s Drought-Hit Vineyards, The Harvest Of A Changing Climate”. Nytimes.Com. https://nyti.ms/2vlFCgg

(6) Huntley, Rebecca. 2016. “How Climate Change Is Affecting The Wine We Drink”. ABC News. http://www.abc.net.au/news/2016-12-04/how-climate-change-is-affecting-the-wine-we-drink/8074252.

(7) Vartabedian, Marc. 2017. “Thousands Of Jobs Depend On The Wine Industry’s Uncertain Recovery”. The Atlantic. https://www.theatlantic.com/business/archive/2017/10/wildfires-napa-wine/543429/.

(8) https://www.adelaide.edu.au/wine-econ/

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6 thoughts on “Will Climate Change Your Wine? How Rising Temperatures May Impact Vineyards.

  1. M, in the grand scheme of things, I know that lost grape production is nothing to whine about, but I can’t help but feel a little nervous about the implications of your post. (I’m admittedly biased because California makes my favorite wine, and based on your post, the future doesn’t bode well for US wine country.) Given that last summer in the US was one of the hottest on record, I fear that, like you say, we stand to lose a significant portion of our wine acreage as the earth gets hotter. Reduced wine acreage in the US could mean the end of “three-buck chuck” (already up from “two-buck chuck” just last year!) at Trader Joe’s, which would certainly be a travesty.

    My fear about vineyards such as Fetzer Vineyards in California is that they are focused on being eco-friendly, and not necessarily on making investments/pursuing opportunities that will allow them to shield their grapes from the impacts of climate change. I applaud Fetzer for refocusing its production process on eliminating waste and converting to clean energy. However, I worry that these initiatives are not necessarily transforming their operations to withstand the negative impacts that climate change has on the winemaking process. If US wine producers such as Fetzer continue to focus more on eco-friendliness and not resiliency, I fear that reduced wine supply in the US is inevitable. This would make us more dependent on importing wine. And if the cost of trade increases (as protectionist trade policy has us believing it will), I wonder if I should be counting my blessings for “three-buck chucks,” which stand to become “ten-buck chucks,” or worse. I do hope that Fetzer and its counterparts tackle resiliency more proactively, and soon!

  2. Thanks for sharing this post. I had never heard of a B Corp before, but after researching this, I hope companies like Fetzer create more momentum (and pressure on other companies) to receive this designation.

    After reading our cases on Indigo in TOM and Apeel in Marketing, I’m intrigued by the potential for agricultural technology companies to meaningfully improve crop yields and resiliency to climate change. Do you have any idea how advanced seed treatments / coatings are in this industry, and if they are commercially viable, how expensive treatments to improve grape yields might be? It would seem to me that the only real way for this industry to survive long-term (in existing geographies) is to embrace new technology like this.

  3. M, very interesting article! Climate change is definitely affecting many agricultural products, from coffee to oil, but I think it will pose the biggest challenge for wine producers. I believe so because while for coffee or oil the country/region is the one that matters, for wine the specific area of origin is much more important to consumers. Think about Bordeaux or Champagne: their production is strictly limited to a well-defined area, outside of which they lose the right to their own name. In this sense, I would challenge your proposed solution of diversifying geography. It may be an option for certain wines, but not for all – and for sure not for the most famous wines.

    In the short-term, I agree with you that focusing on water and energy management is crucial, in order to minimize waste and increase efficiency.
    For the long term, I would suggest to focus on the development of more resistant grapes. For example, in the world of coffee Illy has financed a research to sequence for first time the genome of Arabica, the key coffee variety, hence providing a basis to develop a more resistant variety, without compromising quality.[1]
    A second approach I would suggest is collaborating with suppliers and peers to develop industry-wide solutions. After all, climate change is a collective issue and as such must be treated.

    [1] Illy. “Illy Value Report.” 2016. http://valuereport.illy.com/pdf/BILANCIO_illy_ECONOMICO.pdf

  4. M, thank you so much for sharing the great impact of climate change. As you mentioned, Portugal had one of the most horrifying fires of its history and most of its territory is now in extreme drought, so this is a particularly interesting topic for me. Also, as a wine producer country, several Portuguese wine brands are facing similar challenges.

    I really like some of the suggestion you presented. Particularly, you mentioned irrigation, which I feel is more and more crucial given the volatility the weather is experience – and crucial to reduce the risk of fires, as the soil tends to be humid.

    Second, given that location is key for the production (and branding), looking for different locals may be challenging. So, as you mentioned, creating water storage compartments are crucial to water the fields that Fetzer Vineyards owns. However, in an extreme scenario, I would challenge Fetzer Vineyards to look for new locations, leveraging their operational and industry expertise, and brand.

    Finally, I would propose that Fetzer Vineyards would foster digital analysis of how the different factors affect the vineyard growth and how can they be optimized. Other agriculture companies are embarking in these studies, as it is the case of HMG, a portuguese olive oil company that is partnering with several research units to study the impact of water, temperature and fertilizers in their production. [1] This is done, for example, by mapping the plant water consumption during the day, discovering the optimal water quantity and watering period, and by understanding how the water is affecting the plant’s growth.

    [1] Herdade Maria da Guarda (2017, October 2017). Retrieved from: http://www.mariadaguarda.com/herdade-maria-da-guarda-lanca-projecto-pioneiro-varias-entidades/, accessed on November 2017.

  5. Really interesting post — Fetzer is doing some really interesting sustainability initiatives. I had no idea earthworms could naturally clean water.

    I like your additional ideas for potential initiatives, but I do think that realistically they’ll need to focus on diversifying outside of Northern California. Are there other areas of the northern US or Canada that are expected to become more attractive for wine growing with climate change? I’m also wondering about inventory management. Should they be holding more finished inventory to hedge and have product to sell in years when production might be particularly disrupted and prices skyrocket?

  6. M, very interesting post on Fetzer Vineyards’s methods of combatting climate change. While it’s great to see that Fetzer is taking the initiative to move toward long-term sustainability, I do worry that this may be distracting from perhaps their most existential concern of enhancing yields in a world where more frequent shifts in the climate are threatening the ability to produce wine-bearing grapes. If I were Fetzer, in the immediate term, I would be focusing my efforts on developing technologies or chemicals that enable grapes to continue to grow effectively even with variations in the temperature or climate. Ideally, this would also coincide with long-term sustainability, as processes may require less water, if any, etc. While I imagine investing in innovative research such as this could be quite costly, it may end up being exactly what is required to stay in business over the coming decades.

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