Rising costs and climate: the most difficult challenges for the wine sector
According to the regular research of the University of Geisenheim commissioned by Prowein, the most significant issues for the wine business in the foreseeable future are growing prices and adaptation to climate change.
The Prowein Business Report provides a fascinating and valuable cross-section of thousands of wine industry operators' authoritative viewpoints. This year, the University of Geisenheim included wine industry operators from 48 nations in its investigation, and according to Simone Loose (director of the well-known German university's Institute of Wine and Beverages): "The entire industry has the task of adapting to climate change while also being environmentally friendly and sustainable, and convincing customers of this. This can only be achievable if the sector joins forces and winemakers, retailers, and gastronomy professionals can credibly communicate sustainability ".
But what are the most pressing challenges for the global wine industry? For the great majority of producers, the increase in expenses, beginning with energy prices, will have an unavoidable influence on the ultimate price of wines in the immediate term.
In addition, given the difficult economic situation impacted by the Russo-Ukrainian conflict and the pandemic's longevity, a reduction in wine consumption is expected (some signs in this direction are already coming from the large-scale retail trade).
The other major source of concern is climate change, which is regarded as the greatest threat by six out of 10 producers. It offers significant hurdles for wine growers, especially those with poor profitability, when combined with the tightening of environmental rules.
It is interesting to note how producers' concerns differ depending on their country of origin; for example, French and Germans see the European policy to reduce alcohol consumption as a very serious threat, whereas producers in the United States, Australia, and South Africa see trade war, competition from other beverages, and cannabis legalization as the most serious challenges.
It is fascinating to emphasize how, owing to good climatic circumstances, Spain and Italy are the most advanced and "certified" producing countries in terms of sustainability (respectively 61 percent and 52 percent of the sector leaders who participated in the survey). Significantly higher numbers than France (35%), Germany (21%), the New World (14%), and the European average of 21%.
Given the increased expenses that such a decision entails, it would be critical to be able to highlight Mediterranean viticulture's outstanding leadership in terms of sustainability, a true strategic aspect in terms of reputation and image among worldwide customers.
According to the survey, in fact, only 30% of German winegrowers, 40% of French and Italian winegrowers and 58% of Spanish winegrowers believe that organic viticulture is financially sustainable in the long run. Customers' willingness to pay the asking price, especially in climatically demanding wine-growing locations, would be an essential requirement for covering the costs of organic wine production.
Finally, it's worth noting that the wine business is becoming aware of the importance of making "sustainable" wine. The majority of wine shops (78 percent), hotels (77 percent), and restaurateurs (72 percent) believe organic wine production will continue to grow, according to the survey.
However, not everyone agrees: wine sellers in the Netherlands, Germany, and Eastern Europe report reduced demand for organic wines and a lack of desire to pay for them, making them less optimistic about their growth.