Driven by consumers, climate change, sustainability grows in the global wine industry - SmartBrief

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Driven by consumers, climate change, sustainability grows in the global wine industry

Sandra Taylor, author of The Business of Sustainable Wine, discusses how sustainability in the wine industry is being driven forward slowly but surely by many forces.

6 min read

Food

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When most consumers think about wine and imagine how it is made, many conjure up a bucolic scene: a small vineyard nestled in a picturesque hillside, the farmer and his family close to nature and living in harmony with the seasons. Despite its bucolic image, winemaking is big business and is growing.

In fact, most of the world’s wine, including in the US, comes from vineyards and wineries that are owned by very large corporations, and even the most remote, small-scale wineries are touched to some degree by the complex international business of wine.

Wine is a major global industry, subject to the same cost constraints, desired profit margins and investor expectations as other industries. These business realities affect decision-making about integrating sustainability into grape growing, winemaking, distribution and retail.

Driving toward sustainability

Yet important market forces are driving the wine industry toward sustainability. Although most wine shoppers don’t take notice of terms such as organic, biodynamic, sustainability, natural, carbon neutral or “wine miles,” the businesses that sell to those consumers — retail chains, restaurants, hotels — increasingly demand purpose-made plans that show the wineries’ commitments to environmentally friendly and socially responsible approaches.

Supermarket buyers, (i.e., procurement managers) have erected what wineries call a “sustainability hurdle” that must be traversed to sell in those stores. Notable examples are UK retailers Tesco and Marks & Spencer, Whole Foods, Walmart, SAQ of Quebec, LCBO of Ontario and Systembolaget of Sweden that all seek to focus much of their wine inventory on sustainable, organic and biodynamic wines. This is due to the retailers’ overall corporate social responsibility commitments and corporate brand positioning, or because they don’t want to have their reputation tarnished or be embarrassed by an unsustainable product that lands on their shelves and becomes the subject of stakeholder concern.

Restaurants in key markets include a sizeable number of certified sustainable, organic, and biodynamic wines on their wine list, often because the chef is convinced that these wines pair well with their foods that are natural, organic or “farm to table.”

Moreover, consumers are increasingly concerned about where their food and beverages come from and pay greater attention to whether it is produced in a responsible way that guarantees protection of the environment and respect for ethical and social principles.

In addition, regional wine industry associations have established sustainability standards with a range of strict — and not-so-strict — sustainability-related guidelines and rules. US wine regions, as well as those in Chile, Germany, Italy, New Zealand and South Africa are among the most rigorous. These sustainability certification programs cover critical elements requiring a certain score, and independent third-party verification, in order to be certified sustainable. The sustainability elements graded include:

  • Supply chain engagement, transparency, communication, data aharing
  • On-farm biodiversity and ecosystems management
  • Monitoring soil fertility, degradation and erosion
  • Integrated pest management
  • Limited use of chemical pesticides, herbicides or fertilizers
  • Reduced water consumption for irrigation and for use in the winery
  • Recycling
  • Use of renewable energy
  • Glass Production: Recycled
  • Distribution fuel use
  • Labor rights; safety, community social responsibility

Climate change impact

Importantly, climate change is a major motivator for a sustainable wine industry as global warming has impacted growers around the world. Warmer days and nights, combined with more extreme weather events, are forcing many vintners to adjust their harvest dates and how they produce wine. Warmer weather means vines bud earlier in the year, which leaves the grapes vulnerable to biting spring frosts. Drought makes for very dry conditions that can lead to fires.

This year, harvests, like in California and Italy occurred 4-6 weeks earlier than the norm in previous years. The 2017 vintage in France was beset with frost, hail and drought. In northern California, Washington, Oregon, Italy, Spain and Portugal, it was heat and fire. Fortunately, most of the 2017 harvest had occurred, ironically due to extremely warm temperatures, by the time the fires ignited. Fears of smoke taint remain for those grapes in Napa that hadn’t yet been harvested, namely cabernet sauvignon.

The Champagne region in France, where cool climate grapes are grown, is especially vulnerable to rising temperatures that have caused the grapes to produce more sugar, more alcohol and less acidity. Acidity is vital to the crisp flavor of the finest champagnes.

“Day of reckoning”

The wine industry itself has also been a culprit in global warming, but it is starting to take steps to reduce its carbon footprint — using lighter weight bottles, shipping wine in bulk to be bottled in destination markets, proper management and control of water usage, reduced greenhouse gas emissions, energy and conservation of other natural resources.

New formats for wine delivery and alternative packaging are innovations that can offer taste quality, eliminate waste and reduce carbon footprint, such as wine in keg for wine-by-the-glass service in restaurants and wine bars, and bag-in-box wine for home consumption.

The sustainability performance of the wine industry has yet to receive the kind of media scrutiny that other industries have in recent years.

Yet, a day of reckoning is fast approaching. The industry is now being shaped by rigorous, compulsory environmental regulations, voluntary assessment and certification, as well as by more environmentally conscious consumers who want to be sure they are purchasing products that respect the environment and the health of vineyard workers. Add to that the worrying effects of drought and global warming, sustainability must be considered a critical performance factor for the industry.

Sandra Taylor is an internationally-recognized expert on environmental sustainability, social responsibility and agricultural supply chains. Through her Sustainable Business International consulting firm, Sandra helps clients in their corporate responsibility (CR) efforts in areas like global supply chain sustainability, environmental risk management, international trade and partnerships. Her book, The Business of Sustainable Wine was launched this summer.

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