Would your favorite wine still be around in 2050?

How can Jackson Family Wines and other wineries around the world adapt to climate change?

Climate change is threatening the world’s wine supply.

 In October 2017, the International Organisation of Vine and Wine (OIV) announced that global wine production would fall by roughly 3 billion bottles in 2017, a decrease of over 8 percent from 2016 and the lowest level since 1961 [1]. The losses were driven by extreme weather events in Italy, France, and Spain [2].

Figure 1. World wine production trends [3]

Several reports suggest that rising temperature around the globe could imperil major winemaking regions in the coming decades [2]. A study predicted that by 2050, many regions in Europe, including much of Italy and Southern France, could become unsuitable for wine grapes [2, 4]. The study also suggested that production in California could fall by 70 percent by 2050 [2, 4].

Jackson Family Wines

Best known for its signature brand, Kendall-Jackson, Jackson Family Wines is one of the largest family-owned winemakers in the United States. Since the first vintage of Kendall-Jackson in 1982, it has become a premium collection of wineries sourced from vineyards across California, Oregon, Italy, France, Australia, Chile, and South Africa [5].

What Climate change means for Jackson Family Wines

For Jackson Family Wines, climate changes pose new challenges:

  • Wine grapes are vulnerable to hotter, drier, and more extreme weather [6]. With climate change affecting nearly all the regions where they grow, the yield of grape will decrease.
  • Pressure on sourcing water increases. Producing quality grapes requires water, as with any food production [2]. As global warming creates drought and decreases rainfall, water shortage threatens the viability of growing grapes.
  • Pest pressure is also increasing. As grapes ripen earlier in warmer climate, swallows and crows eat grapes before the harvest. Mice, voles, and gophers will also threaten vineyards during warmer winters [2].
  • Managing supply chain is complex. As Jackson Family Wines owns vineyards in multiple regions and is expanding to new regions with climate better suited for wine gapes, manufacturing, transportation, warehousing, storage, wholesale, and retail trade become increasingly more complicated [7].
  • Future of existing vineyards is ambiguous. Will good grapes grow in their existing vineyards in 10 years?

How Jackson Family Wines is responding to climate change

Jackson Family Wines is using both high-tech and old-school techniques to combat climate change:

  • Improve energy efficiency. The company placed solar-powered weather station to be more energy efficient and lower fossil-fuel consumption — one of the biggest drivers of climate change. For example, if the sensors find the weather too cold at night, new wind machines will automatically start circulating warm air to protect the vines [2].
  • Source water environmental-friendly and use water more wisely. They are capturing rainfall by placing over 100 human-made reservoirs – some of which cost $1.5 million to build – scattered throughout their vineyards [2]. They have also put a price on water of three cents per gallon so that saving can be measured [9]. Workers have devised a system to recycle the water used to wash barrels [2].
  • Pest control without pesticides. To go after pests, they placed boxes for owls and falcons to occupy during the harvest. The owls and falcons scare away other animals with a taste for grapes [2].
  • Utilize data-driven farming. They have been analyzing their crops by installing devices that measure how much sap is in the vines. They transmit the data over cellular networks to calculate how much water specific areas of vineyards need. They monitor their crops using drones equipped with sensors that detect moisture by evaluating the colors of vegetation to identify nutritional deficiencies in the crops, or irrigation leaks [2, 9].
  • Consolidation of distribution facilities. They are building a large distribution center near their vineyards, instead of having many small distribution centers in the same region [7]. They are minimizing inventory movement by putting enough product on the floor to satisfy orders for just-in-time delivery [7]. They have collaborating with carriers to keep a certain number of containers on Jackson Family Wines’ property to solve for transportation and storage capacity issues [7].

Is Jackson Family doing enough?

Some of these initiatives have made Jackson Family Wines better prepared to combat challenges posed by climate change. However, are their effort enough to offset rapid and strong impact of climate change?

To prevent further climate change, it may be more beneficial for Jackson Family Wines to partner with other wineries, other agribusinesses, and government agencies. As climate change not only depends on your action but those of others, it can be even more effective to share knowledge and technology with others to collectively fight climate change.

However, would it be wise to share the company’s knowledge, experience, and expertise with potential competitors? Also, how can a business cooperate and persuade other businesses and government to collectively do what may be the best for everyone in the long run?

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References

[Picture] Maclean, Dave. Global warming is now threatening wine production in the mediterranean. (2017, July 12). Retrieved from http://www.independent.co.uk/life-style/food-and-drink/global-warming-wine-production-mediterranean-europe-continent-italy-spain-greece-a7836766.html.

[1] Dewey, Caitlin. World wine production just hit a 56-year low. That’s not even the worst part. (2017, October 27). Washington Post. Retrieved from https://www.washingtonpost.com/news/wonk/wp/2017/10/27/world-wine-production-just-hit-a-56-year-low-thats-not-even-the-worst-part/?utm_term=.fc9e0d020cff.

[2] Gelles, David. Falcons, Drones, Date: A winery battles climate change. (2017, January 5). The New York Times. Retrieved from https://nyti.ms/2j7i4pJ.

[3] 2017 Global Economic Vitiviniculture Data. (2017, October 24). International Organisation of Vine and Wine. Retrieved from https://digital.hbs.edu/platform-rctom/submission/the-uberization-of-uber-rebounding-from-a-terrible-no-good-very-bad-year/?section=7754&sort=rand.

[4] Shepard, Anderson; Tabor, Gary; Marquet, Pablo; Ikegami, Maki; Hijmans, Robert. Study: Climate Change Will Put the Squeeze on World’s Wineries & Wilderness. (2013, April 8). Conservation International. Retrieved from https://www.conservation.org/NewsRoom/pressreleases/Pages/Study-Climate-Change-Will-Put-the-Squeeze-on-World%E2%80%99s-Wineries–Wilderness.aspx.
[5] Family. Jackson Family Wines. Retrieved from http://www.jacksonfamilywines.com/en/our-family.

[6] Hertsgaard, Mark. What climate change means for wine industry. (2010, April 26). Wired. Retrieved from https://www.wired.com/2010/04/climate-desk-wine-industry/.

[7] Mac Donald, Mitch. Shipping no wine before its time: interview with Kathryn Zepaltas. (2007, May 1) DC Velocity. Retrieved from http://www.dcvelocity.com/articles/20070501thoughtleaders/.

[8] Boynton, Jen. Kendall Jackson goes for sustainability gold. (2015, July 1). TriplePundit. Retrieved from https://www.triplepundit.com/2015/07/kendall-jackson-goes-sustainability-gold/.

[9] 2016 Jackson Family Responsibility Report. (2016). Jackson Family Wines.

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6 thoughts on “Would your favorite wine still be around in 2050?

  1. It’s bad enough to tell me we’re burning through the ozone layer; but now, you mean to tell me that I might not have wine to drink while I watch it all happen!? I think you make some great points, @hj2189 – but your post makes me question whether several of the effects of climate change on the wine industry may be hard to curb.

    So, different types of grapes require different growing conditions (and in some cases, specific regions, in the case of champagne, for example). And while wineries like Jackson (with enough capital for investments) can push for more water and energy-efficient practices, I wonder whether eventually, changes in climate will limit the number of different wines a single company can even offer in the first place.

    I’d imagine that only large producers would be able to stomach the newly sky-high price of growing different grapes for different wines in different regions (thanks to changing climates), not to mention the bloated supply chain costs from producing and distributing around the globe (as you’ve mentioned above). So, perhaps this is less salient for large wineries – but in the future, will we see smaller companies unable to produce more than a single blend (until they’re bought by a larger collection, like Jackson Family Wines, of course).

    My fear (yes, selfishly, mainly for the sake of quality) is that only the largest and strongest companies will be able to survive the increased costs associated with climate change that you’ve identified in your post – and what does this mean for the quality of the wine that we as consumers will be able to afford to buy? Sure, it’d be great for large wineries and collections to share their best practices between one another, but does this mean that small businesses falter in the face of their bigger foes?

  2. This post raises some very interesting questions about the role and potential actions companies can take to mitigate climate change concerns. With Jackson Family wines facing the same weather threats as other competitors, what is a way different winers can work together in a non-collusive manner in order to protect the longevity of their operations? As Alison mentions, the solutions raised by HJ to the threats of climate change all require tremendous cost. Whether it be installing wind turbines to prevent freezing or opening operations in new regions conducive for growing grapes, all of these options will be a tremendous hit to the bottom line of wine companies and will potentially lead to consolidation. In this regard, however, the wine industry in California at least is very unique. The owning and operating wineries has often attracted a wealthy demographic as many, many wineries operate under huge losses. Will the solutions for wineries run as a hobby differ from wineries run from a profit-maximizing perspective? Will the demographics in the wine industry potentially buffer companies and allow them to handle losses in the short term to invest in more environmentally friendly practices?

  3. It actually strikes me that since Jackson Family already sources grapes from regions around the world, it is much better positioned than wineries that rely on a single vineyard or even a single region for its grapes. I would imagine that this kind of diversify would mitigate the impacts of extreme weather, as a single weather event cannot impact all of their growing regions at once.

    While I applaud Jackson Family for all of the efforts they are undergoing to reduce their own environmental impact, as noted above these efforts will likely not move the needle when it comes to global climate change. While I believe they should continue doing their part and be as sustainable as possible, I think they should take additional efforts to prepare for the impact of climate change. For example, they should focus on expanding or launching their presence in Europe, which is expected to be better suited to weather the impacts of climate change [1].

    [1] https://www.npr.org/sections/thesalt/2016/03/21/470872883/an-upside-to-climate-change-better-french-wine

  4. Not my wine! I’m on the same team as Alison – no one warned me that we might not have any wine to drink while we watch this world fall to pieces. I’m extremely impressed by the actions that Jackson Family Wines has already taken. We can all agree that they are trying to tackle the issues before their business is ruined by the effects of temperature changes. What I wonder is are they doing enough? And how much is enough? Climate effects will continue worsen so solutions being deployed in today’s world will not be enough to prevent the damages in the future.

    Outside of the ever increasing temperatures, my concern for this industry is the increased frequency of extreme weather patterns (e.g. droughts, hurricanes, tornadoes). The battle against increasing temperatures could take decades after decades to really hurt the market, but the increased frequency of natural disasters and the extremity of their violence could destroyed it way faster. We are seeing increased wild fires in California which are not only impacting wine production within a season but causing permanent damage to vines for future years.

  5. HJ, thanks for shedding light on this – the wine crisis definitely deserves as much spotlight as the food crisis if not more.

    I think the wine industry can draw some lessons from the coffee industry on sustainable development, especially on industry collaboration and public-private partnership. Having seen some organic/ biodynamic wineries in Napa and Sonoma, my sense is that most sustainability efforts are piecemeal with limited serious investments in technological advancement, resulting in limited impact. While Jackson, with its scale and high-tech solutions, is doing more than the smaller players, they cannot make a meaningful impact if they are doing it alone.

    Establishing a sustainability authority like Fair Trade and Rainforest Alliance that sets standards in the winegrowing industry, certifies wineries, coordinates with both private and public sector stakeholders will be crucial to drive change in regulation and industry practices. Some other New World wine-producing countries like Australia and New Zealand have rolled out similar large-scale collaborative programs that California can learn from. Competitive business interests aside, sustainability is a topic that calls for industry-wide knowledge sharing and resources, and it is up to market leaders like Jackson to convene others players and get conversations started on co-investing in sustainable value chains and farming technologies that create a win-win for everyone in the long run.

  6. Thank you for this article, HJ! I, too, am impressed by the steps that Jackson Family has already taken to combat the effects of climate change. To build on Angielist’s last point, it will be essential for the industry to come together on the sustainability front for the long term health of the industry as a whole. Your article made it clear that the severity of the threat remains ambiguous, however, vineyards can come together in coalitions to share best practices to position themselves to be more sustainable. Vineyards can share elements of their operating models without putting their strategic competitive advantages such as quality, price, taste, etc at risk. Leveraging data-driven farming technology could be especially useful because although vineyards such as Jackson Family may not share the data with competitions (especially since measurements around soil and other elements are critical to wine quality), the investment in the technology itself can be done through partnerships with research universities and other industry groups.

    The efforts of Jackson Family wine alone will not be enough to move the needle against climate change. The wine industry, along with other agricultural-business, must work together to hold larger initiatives, with or without incentives from regulation.

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