Thinking Outside the Wine Box about Climate Change & the Future of Wine

ccMiguel Torres recently warned that the wine industry is not doing enough to fight climate change and there is no doubt that he is right. There is a lot happening, as the recent Porto conference on climate change and wine makes clear. Wine is ahead of most other global industries. But it is not enough.

Inconvenient Truth

One reason climate change does not get even more attention in our industry (and I think that this is true of other sectors as well) is that we tend naturally to focus on the direct effects on our businesses, assuming that these are the most important ones to us. So climate change is seen as something to mitigate in the short term using appropriate viticultural techniques and other strategies.

In Australia, for example, there is a shift from French to Spanish and Italian wine grape varieties and investment in cooler regions including especially Tasmania. The fact that firms can adapt in this way lessens the sense of risk and urgency. Climate change is seen, to draw from the title of Al Gore’s film, an inconvenient truth. Inconvenient and sometimes expensive, but not necessarily an existential threat, especially since some elements of climate change actually benefited winegrowers in the not-too-distant past.

Taking the Heat Off

Not everyone thinks this way, of course. Torres has gone all in to combat climate change and he is not alone. But the fact that mitigation techniques exist and more are being developed tends takes the heat off the sense of urgency that might otherwise prevail.

But these direct effects of climate change are not necessarily the most important ones.  In order to properly assess the climate change threat to wine we must look deeper into the future and broader to the impact on the overall economic environment in which wine is embedded.

So what does the future hold, assuming current trends continue in some form? There has been a lot of research on how changing climate will affect the viability of wine grape growing in the traditional regions. Some areas will suffer minor impacts that can be mitigated through changing viticultural practices. Other regions will remain viable, but perhaps need to re-graft vines with different grape varieties more suitable to the new conditions. Old World appellations will have to rethink many of the regulations that current define them.

Other regions will will cease to be viable for quality wine grapes – period – while elsewhere we’ll see areas in the spotlight as emerging wine regions. All this will take place in the context of increasing instability of weather patterns, which most of us have already observed.

Outside the Wine Box

All these factors are important, but I think it is necessary to think further outside the wine box. Climate change will impact all of agriculture in one way or another and a great many other industries, too. The problem of feeding the world (and earning an income in it) will not grow easier overall if trends continue. This will put a squeeze on living standards and wine, because it is far from a necessity, will be squeezed harder than some other products.

At some point, and I hope it is sooner rather than later, coordinated action to slow or potentially reverse climate change is in the cards. Economists like me have long advocated a carbon tax as part of the package. Carbon taxes exist today, but in a patchwork quilt of policies and regulations with widely varying tax rates.

Carbon Tax and Wine

A coordinated carbon tax works by raising the relative price of goods and services that contribute to climate change problems. Consumers are discouraged from purchasing them by the higher price. Producers are given an incentive to innovate products and processes that replace old systems to lessen tax burdens and climate change impacts at the same time. Economists favor a carbon tax because it creates incentives for private actors to reduce emissions whereas direct regulation creates incentives to get around the regulations (see VW diesel emissions fraud).

A well-designed broad-based carbon tax might be the best way to counter climate change. It would harness private self interest to combat climate change in a way that other solutions cannot.

If climate change will affect wine as noted above, how would the carbon tax impact the industry? Well, the modern globally-integrated wine industry has a substantial carbon footprint and a carbon tax would be a big shock. Even firms that are carbon neutral in the vineyard and cellar face the fact that the supply chain is a problem.

Take glass bottles, for example. Glass of course takes a lot of energy to make, which is an important issue, but that’s not the end of the story. The U.S. wine industry is dependent on glass bottle imports from China. The ships that carry containers full of glass bottles are significant sources of pollution. Transportation from bottling plant to warehouse to retailer to consumer adds to the carbon footprint, too.

Beer and spirits might well be less affected by a carbon tax since they can more efficiently be produced close to major markets using ingredients such as grains that can be shipped efficiently by rail. The fact that wine is mainly produced close to the agricultural source and then shipped to far away markets is a disadvantage in a carbon tax system compared with products where weight and bulk (in the form of water) can be added closer to the final consumer.

Need to Do More

I have obviously just scratched the surface here, both in terms of the broader impact of climate change on the wine industry’s economic environment and the potential impacts of policies designed to resist or reverse current trends. But I hope my point clear. The impact of climate change on your wine business goes beyond what you see in your vineyard or cellar and the cost of inaction now in terms of future consequences is likely to be pretty high.

Climate change creates losers and some winners and the policies that are eventually adopted to deal with it will be the same. It is difficult to imagine a scenario where wine will be among the winners and we can already see the negative effects. It’s time to join Miguel Torres and the Porto Protocol team who ask us all to do more.

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An earlier version of this article made referenced to a report in The Drinks Business about Richard Smart’s views about climate change and hybrid grapes. Smart disagreed with the way his views were reported and the interview was removed. Here is the explanation.

Rethinking the Business Side of Climate Change and Wine

 

Last week’s column about the Porto conference on Climate Change and Wine struck an optimistic note. Powered in part by the Porto Protocol the big international gathering showed that the wine industry is moving the needle on climate change, both in terms of mitigating the impacts and addressing causes.

Sue and I learned a lot from the experts who spoke on the science and technology aspects of climate change and wine, but of course it was the business side we were most interested in.  If you have a little time, for example, I recommend watching the video of the session on “Consumer Expectations and Sensible Marketing” featuring Marks & Spencer’s Paul Willgoss, Antonio Amorim of Amorim Cork, and moderator Richard Halstead.

“Economy & Efficiency: Call to Action” was the title of the final session on the second day, which featured Stephen Rannekleiv of Rabobank, Robert Swaak of PriceWaterhouseCooers, and me as speaker/moderator. I led off the discussion, focusing on the need to rethink the relationship between economics and the environment and issuing a call to action.

Stephen was next up, showing how Rabobank has gone beyond its traditional role as an agricultural lender to creating platforms where innovative solutions can be tested and developoed.  He followed up with a program on this subject on the popular Rabobank beverage industry podcast Liquid Assets.

Robert’s powerful talk covered several important points, but was especially effective in developing the notion that climate change introduces or magnifies a number of risks, which wine businesses need explicitly to take into account and act upon.

 

As I wrote in the run up to the conference, Sue and I were interested in the trade show that took place along side the sessions. We were hoping to see a showing of the products and services that vendors provide to firms that are committed to climate change action. What we found was different from our expectations. The trade show mainly gave conference sponsors (see graphic below) an opportunity to demonstrate their commitment to the cause. sponsors

We were a little disappointed, but I think we harbored unrealistic expectations. Vendors are  more likely to put their efforts into meetings that attract thousands, not hundreds, of wine industry actors. The Unified Symposium in the U.S., for example. Or SIMEI in Milan. We will look closely when we are at these and similar events to see to what extent climate change is being integrated into the daily business of wine.

Field Notes from the Porto Conference on Climate Change and Wine

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Sue and I were in Porto earlier this month for the global conference on climate change and wine. The event started with a day and a half of presentations and discussions directed at climate change solutions for the wine industry and then concluded with a half-day summit on climate change more generally.

The highlight of the summit was a presentation by Al Gore, the prominent climate change activist and former U.S. Vice President. Gore’s presentation was intense, focused, and inspiring. Sue called it a “stem-winder” of a speech — it really got the audience worked up.

The conference itself featured speakers from almost all corners of the wine world (Asia was the missing corner, with one non-wine speaker, Afroz Shah, a United Nations Champion of the Earth, from India, and Rajeev Samant, CEO of India’s Sula Vineyards, in the audience).

Herewith are some field notes from the eleven sessions. I recommend Richard Siddle’s report on the conference for additional detail and analysis. Videos of the presentations are being posted on the Climate Change Leadership YouTube.com page.

Ground Hog Day?

In a pre-conference column I wrote about the tragedy of the Groundhog Day syndrome — experts meet to talk about climate change, but it is mainly talk and nothing really gets done. The next meeting is pretty much like the last one, repeating with only minor variations, as the in the popular Bill Murray film.

The Porto gathering promised to break out of the Groundhog Day cycle and offer real solutions; I am happy to say that it generally delivered. Starting with Miguel Torres, we were offered concrete examples of determined companies and leaders who backed their talk with action.

One thing I learned is this: the basic outline for progress on climate change issues is fairly clear. Start with an environmental audit to establish a baseline, set specific quantitative goals to reduce emissions and improve efficiency, evaluate results, then repeat the process. Some of the achievements reported here were startling and show just how much can be accomplished once a serious commitment is made.

You could tell that many actors were still struggling a bit with exactly where to put priorities: Try to make progress everywhere? Or focus on a few big goals, either the ones that would be easiest or cheapest to achieve or perhaps the ones that would have the biggest impact? I do not know what the answer to that question is, but it is better to know what you want to do than to thrash around blindly.

The Porto Protocol

Participants were encouraged to sign the Porto Protocol, a platform created last July in the first iteration of this conference (which featured a keynote by Barack Obama).  Those who sign the protocol commit to doing more in the future than they are doing now and to sharing their methods and results with others. The idea is to create an open source database that will help everyone do more, faster, better.

Interestingly, Sue and I ran into several people who confided that their organizations were having trouble deciding whether to sign up, which was puzzling because each of them has developed a strong program to promote sustainability and confront climate change.

What’s the problem? One colleague said that his organization was already doing more than the protocol currently requires, so there was a concern that they might not get credit for what they have done. No one said it, but I think it is possible that the transparency requirement could also be an issue. If that’s the case, I hope we can get past it. As Adrian Bridge, the CEO of Taylor’s and the driving force behind this initiative, has said, “There is no time, and no need, to reinvent things. If we share our successes and experiences, we will all benefit.” He is certainly right.

Does Climate Change Action Pay?

This is the question that I am often asked about both climate change programs and sustainability measures generally.  The gist is that these programs are costly. Who is going to pay for them?

I do not recall hearing anyone say that consumers would be willing to pay a premium for climate change-friendly wine, although some of us talked at dinner about what could be done to draw consumer attention to wineries that are taking climate change action.

Does that mean that the costs fall like a tax on the wineries who fight climate change (and not on those who don’t)? Yes and no. Some of the defensive costs of mitigating climate change, especially in the vineyard, are going to be unavoidable. Better to treat them as a sunk cost and move on.

Some positive actions have the potential to pay for themselves, at least in part. Katie Jackson of Jackson Family Wines, told the story of the decision to move to slightly (one ounce) lighter-weight bottles for some of the millions of cases of wine that they sell. The conventional wisdom is that consumers associate lower bottle weight with lower quality, so there was pushback about this method to reduce the firm’s carbon footprint.

Happily, according to Jackson, consumers didn’t notice the difference and the environmental savings became a cost-reducing part of Jackson’s carbon-reducing program. The world is not filled with free lunches like this, but there were several examples given of actions that paid for themselves, contributing to both financial and environmental bottom lines.

All Along the Value Chain

Antonio Amorim, president of the world’s largest natural cork producer, argued for the environmental benefits of natural cork closures. The cork closure, which captures carbon rather than releasing it, can offset the carbon generated by the glass bottle it seals, he said. Amorim announced plans to expand cork forests, building upon previous innovations aimed at speeding up the long cork harvest cycle and ridding corks of perceptible cork taint.

Other speakers addressed issues up and down the supply chain, illustrating both the challenges and opportunities that climate change action presents.

U.C. Davis professor Roger Boulton’s presentation on “The Winery of the Future” was a fascinating deep dive into what is possible with current technology if you decide to design a winery from scratch to have zero or negative emissions. It is like a Rubik’s Cube in a way, since each action has many reactions, but Boulton showed that a solution is possible, with a super-efficient production facility the result.

Call to Action

Stephen Rannekleiv of Rabobank, Robert Swaak of PricewaterhouseCoopers, and I had the final session of the conference, “Efficiency and Economics: Call to Action” We presented in a “two-minute drill” mode because the earlier sessions went over time and the we had to finish on schedule so that the room could be turned for the afternoon summit.

Rannekleiv focused on the many steps that Rabobank is taking to foster innovation in the food and agriculture sector to address sustainability and climate change issues. Swaak could have touted PwC’s environmental impact assessment practice, but choose instead to add a new dimension to the discussion by highlighting how climate change impacts businesses, and not just wine, through the various often unseen risks that it introduces or magnifies.

I talked about the fact that climate change requires new ways of thinking (which fit in very well with my colleagues’ remarks) and issued the call for action. Wine gets it, I said, but that’s not enough. The wine industry needs to extend its influence across the value chain in order to maximize its impact.

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Sue and I want to thank Adrian, Taylor’s Port, Pancho, and David Furer for organizing this conference and give special thanks to Greg for suggesting that we participate.  To everyone we met at the conference: we hope our paths cross again very soon.

Wine & Climate Change: Groundhogs, Gulliver & the Porto Summit Challenge

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Porto will host a global gathering next week devoted to the topic of Climate Change Leadership: Solutions for the Wine Industry. Sue and I will attend the meetings, including a session on “Economics & Efficiency: A Call to Action” where I will speak along with Stephen Rannekleiv of Rabobank and Robert Swaak of PriceWaterhouseCoopers.

The program is a who’s who of wine industry leaders who have chosen to have a dog in the climate change fight. The list begins with Adrian Bridge, CEO of Taylor’s Port,  who was instrumental in organizing the event, and continues with Miguel Torres, Cristina Mariani-May, Pau Roca, Antonio Amorim, Greg Jones, Roger Boulton, Jamie Goode, Gerard Bertrand, and on and on. Some guy named Al Gore is giving the summit keynote. Anyone heard of him?

I will be very interested in how the conversation evolves both in the official sessions and in the informal discussions that are sometimes more important. Sue will be paying special attention to the associated trade show because she’s very interested in how talk about climate change and wine translates into action and both the nature of the vendor turnout and the quality of interaction will be a good indicator of potential success.

Groundhog Day Syndrome?

There are lots of meetings and conferences about the environment, sustainability, and climate change. Sometimes in the past they have reminded me of the 1993 film Groundhog Day, where the same talk and motions are repeated as if on an endless loop and little of substance seems to change (until, at last, it does). Climate change has reached a critical moment, however, which demands action over talk.

I’m hopeful that the Porto meeting will avoid the Groundhog Day syndrome and one reason why is the focus on solutions — concrete steps to address climate change issues. And that’s why the trade show will be important, too, because it will an indicator of how seriously the market has embraced the importance of climate change and the opportunity for solutions.

The Gulliver Problem

But then there is the Gulliver problem.  Jonathan Swift’s Gulliver found himself in Lilliput where he was vastly larger and more powerful than the tiny citizens. His every action posed a threat to their world and their only hope was to work together to control the giant. Lacking a massive rope to tie the big guy down, the Lilliputians teamed up with thousands of tiny strands.

Climate change is a bit like Gulliver in that it is a huge force that none of us has the power to stop by ourselves. Top-down initiatives like the Paris Agreement are very important, but need to have bottom-up support. Grassroots. Tiny strands. Addressing climate change head on requires thousands of small concrete actions that taken together can have real meaning.

Why is Wine Different?

So where does the wine industry come in? What is different about wine that makes its Lilliputians think that they can take on Gulliver? This is one of the themes of my talk and, while I don’t want to give too much away just yet, let me share a little of my thinking.

There are many reasons why wine is particularly responsive to climate change issues (you have probably already thought of a few reasons as you read this sentence). But here is an important one. Climate change is an existential threat to civilization and the natural environment, but it is not taken seriously enough by many people because its impacts are uncertain, uneven, and projected into the future.

But wine really is different. The future is now for climate change and wine as the combination of higher temperatures and more frequent extreme weather events redraws the world wine map. Wine is fragile, vulnerable. Ultimately there is not escaping the climate change threat.

Wine people have little choice but to seize their Lilliputian tools and work to save their businesses, their vineyards, and ultimately themselves.  Porto will be an opportunity to see both the small and the big. Hope to see you there.

What’s Ahead for 2019? Wine Economist World Tour Update

51ppzy7bwzl-_sx332_bo1204203200_The Wine Economist World tour continues in 2019 and I thought you might  be interested in the who/what/when/where because I think my speaking schedule reflects some important issues and concerns in the  global wine business. Here’s an annotated itinerary.

Unified Wine and Grape Symposium

The Unified Wine & Grape Symposium is the Big Show, the largest wine industry gathering in the hemisphere. About 14,000 people will come to Sacramento for the sessions, trade show, and networking opportunities. The Wednesday morning State of the Industry session draws a huge standing-room-only audience that will be anxious to hear about this year’s special challenges: slowing economy, plateauing demand, surplus stocks, and useful strategies to deal with these problems.

I will moderate the session and present, too, along with Jeff Bitter, Allied Grape Growers, Danny Brager, The Nielsen Company, Marissa Lange, LangeTwins Family Winery and Vineyards, and Glenn Proctor, Ciatti Company. This is a fantastic lineup of speakers with much to say about the industry today and in the future. Not to be missed.

I will be busy again on Thursday morning as co-moderator with L. Federico Casassa, California Polytechnic State University, of “Technology Thursday: From Drones to Chatbots; How the Wine Industry is Embracing Digitalization.”  The speakers will examine digital technology in the vineyard, cellar, and beyond, revealing what’s already available, what is coming soon, and what the  distant future holds. The distant future, by the way, is only ten years away — the pace of technological change is that fast.

There is much to discuss, so there will be about a dozen speakers including Bob Coleman, Treasury Wine Estates, Nick Dokoozlian, E. & J. Gallo Winery, David S. Ebert, Purdue University, Nick Goldschmidt, Goldschmidt Vineyards, Liz Mercer, WISE Academy,  Miguel Pedroza, California State University, Fresno. and Will Thomas, Ridge Vineyards, California. . Each speaker will have just ten “Ted Talk” minutes, so hold onto your hats!

Washington Winegrowers Convention

I will be a busy guy at the Washington Winegrowers Convention & Trade Show in Kennewick, Washington, February 11-14, 2019. I’ll begin early on the morning of the 12th moderating and presenting at the State of the Industry session, which will deal with some of the economic challenges facing the region’s wine businesses today.

Joining me will be Wade Wolfe, Thurston Wolfe Winery, Chris Bitter, Vintage Economics, Steve Fredricks, Turrentine Brokerage, and Jim Mortensen, President & CEO,  Ste. Michelle Wine Estates.

In the afternoon I will be part of a session on “Intentional Rosé.”Rosé is the hottest category in wine and so it is no surprise that it gets a full session here and also at the Unified.

I will talk about the global market dynamic and be joined by Megan Hughes, Barnard Griffin winery, Rob Griffin, founder of Barnard Griffin winery, Lacey Lybeck , Vineyard Manager at Sagemoor Vineyards, and Vincent Garge, Maison Henri Garde, Bordeaux. Fred Dex with lead a tasting of Rosé from around the world.

Porto Climate Change and Wine Conference

Sue and I are looking forward to the discussion at Climate Change: Solutions for the Wine Industry in Porto on March 6-7. The focus will be on action, not just talk, which is much appreciated. Al Gore is giving the closing address and a host of wine industry leaders will speak on their concrete efforts to address the challenge of climate change. Climate change is such an obvious risk to the wine industry. It is great to see so many rise to meet the challenge.

I will be moderating and presenting at a session called “Efficiency & Economics: Call to Action,” which I assure you will be more interesting than it sounds. Joining me on the panel are Stephen Rannekleiv, Executive Director, Food & Agribusiness Research at Rabobank, and Malcom Preston, Global Head of Sustainability Services at PricewaterhouseCoopers.

Chile’s National Wine Fair

Sue and I are looking forward to being at Viña Viñamar, Chile on May 15-16 for the Feira Nacional Vitivinicola.  I will be speaking about Chilean wine on the global stage, which is appropriate given that Chile is such an important wine exporting nation. Chile is hosting the Asia Pacific Economic Cooperation (APEC) meetings in 2019 and I expect that the National Wine Fair will take full advantage of this opportunity. The U.K. and U.S. have long been Chile’s top export markets, but China became #1 in 2017.

British Columbia Winegrape Council Conference

I’ve been invited to speak about the economics of sustainable winegrowing at the BC Winegrape Council Enology & Viticulture Conference and Tradeshow in Penticton, British Columbia in July  Sustainability is on everyone’s lips (see climate change conference above), but the transition from theory to practice or talk to action is a challenge. Looking forward to discussing this issue with my BC friends and colleagues.

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Change is the common feature of all these programs. Changing economic conditions, changing market focus (who would have guessed that everyone would be talking about Rosé?), climate change and sustainable practices, and technological change, too. Change is always disruptive and always interesting, too. Hope to see you somewhere along the wine road in 2019.

Fly-over Vineyards: How Climate Change Redraws the Global Wine Map


There has been a lot of buzz about climate change and the future of wine recently, starting with a New York Times article on Sunday and spreading all around the web. Now there is a video to help us envision the research.

They say that a picture is worth a thousand words, so a cool “fly-over” animation like the one at the top of this post must speak volumes (see this article about the video and the research behind it). As you circle the globe in the video, keep these color codes in mind so that you can interpret the images.

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Bear in mind that forecasting is difficult, especially about the future, so projections shouldn’t be confused with fact. But quality wine grapes are sensitive to climate change as this chart from Bemjamin Lewin’s Wine Myths and Realities (see p. 79)  makes clear. Relatively small changes in average temperature can have significant impacts on vineyard patterns and, as the video suggests, the impact varies in different regions.

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While the dramatic changes you see in the video may not happen, they certain could. And some of the possible climate effects go beyond the sort of changes that might be mitigated by adaptations and innovations in viticultural practices.

Food for thought.

The Real Dirt on the Parker Theory and Chateau Al Gore

The new issue of the Journal of Wine Economics (JWE) leads off with a fascinating article by Julian M. Alston, Kate B. Fuller, James T. Lapsley and George Soleas titled “Too Much of a Good Thing? Causes and Consequences of Increases in Sugar Content of California Wine Grapes.”  It’s the kind of wine economics research that makes me smile: rigorous, clever, relevant — and it even includes a poem! What could be better!

Demand-Side Explanations: The Parker Theory

The puzzle that the article examines is why sugar levels (measured in degrees Brix) have risen in California, taking wine alcohol levels with them. Sugar levels in white grapes grown in California increased 12% from 1980-84 to 2005-08, for example, with the average degree Brix rising from 20.7 to 23.2. Average Brix for red grape varieties increased from 22.2 degrees Brix to 24.3. Sugar levels in Cabernet Sauvignon grapes increased from 22.8 to 25.0 degrees Brix at harvest.  Higher sugar levels mean higher alcohol levels, all else being equal.

Two simple explanations are usually cited to explain the rising sugar/alcohol trend. The first is based on changes in demand. Robert Parker (and some other powerful wine critics) are said to prefer a certain style of wine that is riper. Sugar and alcohol levels have increased as wine growers have worked to produce the grapes that make the wines that most please the Golden Palate of Robert P. (or that otherwise appeal to changing consumer preferences).

Supply-Side Explanations: Chateau Al Gore

I call the second theory the “Chateau Al Gore” hypothesis because Al Gore is associated in popular culture with global climate change and that’s what this theory is about. Rising temperatures, according to this line of reasoning, produce riper grapes pushing up sugar levels, boosting alcohol.

It is pretty easy to line up facts to make a persuasive case for Chateau Al Gore. Temperatures as measured by a heat index have been rising in California, according to the article’s authors. Sugar and alcohol levels have increased, too. Although additional sugar may be welcome (the Parker principle), there are indications that producers would prefer lower levels. A good deal of wine in California is partially de-alcoholized, for example. Alcohol is removed from a portion of the vintage (using reverse osmosis or the spinning cone method I am told) and then the treated wine is blended back, reducing overall alcohol levels and allowing winemakers the opportunity to find the “sweet spot” alcohol level for their wines.

Some of the de-alcoholization may be motivated by federal taxes, which increase substantially on a per-gallon basis for wines that rise above the 14% ABV level. The extra 50 cents tax per gallon may not concern the makers of expensive wines like Screaming Eagle, but it can be a significant cost factor for bulk producters and thus worth the expense of alcohol reduction. In any case, the authors find that lower-priced grapes tend to have lower average Brix readings, which is consistent with the tax hypothesis but doesn’t prove it.

If alcohol levels of wine have increased even after partial dealcoholization, this suggests that rising sugar levels must be unwanted and this notion is at least partially confirmed by preliminary data reported here that many wineries under-estimate alcohol levels on product labels. The authors have obtained access to data from the Liquor Control Board of Ontario (one of the largest wine merchants in the world), which show that the average stated alcohol level of California wine exported to Ontario was 12.63 percent in the sample period while the actual level was 13.35 percent. The gap is clear, but the authors suggest that more work is needed to fully understand it. I’ll be interested to read their final report.

Ceteris Paribus

The Chateau Al Gore theory seems pretty persuasive. Ceteris paribus (holding everything else constant) it makes sense that sugar and alcohol levels would rise with average vineyard temperature. The fact that winemakers work to offset the alcohol boost and maybe fudge it a bit (within legal limits)  on the label suggests that this is a climate change event that they struggle to contain.

But ceteris is seldom really paribus in wine. Employing multi-factor regression analysis, the authors find that the rising heat index is responsible for some of the increase in sugar levels, but not all of it. Put another way, climate factors alone are not sufficient to explain the total increase in sugar and alcohol. Other factors must also be at work.

Which pushes us back to the demand-side Parker Theory, but in a  usefully complicated way. It is important to understand how much the California wine industry has changed in the last 30 years. The type of wine produced has changed, for example, with varietal wine (Chardonnay, Cabernet Sauvignon) increasing faster than production of generic wine (“Chablis,” “Burgundy”). Varietal wines accounted for 71% of California production in 2000, according to the authors, compared to just 19% in 1985.

The move upmarket required different grape varieties of higher quality from different production zones. Thus while total California wine grape production rose by 60% in the survey period, the biggest increase (+185%) was in the Delta region (including the Lodi AVA) with the North Coast (including Napa and Sonoma Valleys) increasing by 128%.  Wine grape production in the San Joaquin Valley rose but by a much smaller amount. The southern San Joaquin valley accounted for just 30% of California vineyard acreage in 2008 (down from 50% in 1981), although it still produced more than 60% of wine grape tonnage because of higher yields.

So wine grape production has increased and also shifted in terms of desired quality, price per ton, grape variety and growing location. It is perhaps not surprising that average sugar levels would change too. Much of the growth in the California wine industry has thus been associated with the demand shift towards premium and ultra-premium wines and the rising sugar levels are to some extent associated with this “grape transformation” of the American palate. Robert Parker is part of this movement although I think it would be unfair to give him all the credit or blame for the changes noted here.

Getting to the Root of the Problem

So the JWE article finds evidence for both the demand-side and supply-side theories of rising sugar levels. But wait, there is more, including rootstocks (this is the “real dirt” in the title of this post).

Phylloxera struck California starting in the mid-1980s when the supposedly Phylloxera resistant AxR#1 rootstock was found to be susceptible to this root-sucking parasite. Eventually nearly all the vines affected were grubbed up and replaced with vines grafted to different (and hopefully more resistant) rootstocks. Several winemakers have suggested to me that the new rootstocks and associated changes in viticultural practices affect grape ripening — sugar levels peak before the desired flavor profile (phenolic ripeness) has been achieved. Longer hang times are needed to get the flavors right,  leaving wine growers with the problem of too much sugar and so forth.

The rootstock hypothesis is beyond the scope of the JWE study, but it indicates how complicated it can be to explain seemingly simple questions in wine economics and how much wine remains an agricultural product after all.

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I don’t think I’ve done justice to this research so I hope you will click on the link in the first paragraph above and read the study yourself.