“Wine does not come in plastic; Wine Understands.”
Good wine is one of life’s greatest pleasures; whether a novice or a connoisseur, enjoying a glass of wine can be a sublime experience. To appreciate wine as something more than a drink, one needs a conscious, deliberate awareness since it is a very personal endeavour. Response of experimenting with a glass of wine is as individual as fingerprints. An aroma or flavour that is pleasing to many may not be pleasing to others. The trick is translating preferences into words.
So, how do we begin? Let us begin a quest for wine knowledge while entering a whole new world. It is a world of understanding the wine, the industry from where and how it started, and it is presently.
Wine has been produced for thousands of years, with evidence of ancient wine production in Georgia (C. 6000 B.C.), China (C. 7000 B.C.), Iran from 5000 B.C. and Sicily from 4000 B.C. Wine production and consumption increased, burgeoning from the 15th century onwards as part of the European Expansion. Fifty years later, a few European countries in western Europe accounted for all exports of wine and almost all of its production and consumption. The scenario has changed dramatically, and now almost all the continents have major wine-producing and consuming countries.
The dramatic change has been chiefly science and technology-driven, giving rise to new nations becoming the winemakers. The change can also be attributed to the economies associated with the wine industry. All these factors have led to magnitude shifts in the consumption and production of wine across the globe. Wine being an alcoholic drink primarily made from grapes, the archaeological evidence of winemaking cannot be precisely established since the presence of fruits does not indicate the exact implication of wine production. However, the two main methods of identifying winemaking, widely accepted by the researchers, are the presence of domesticated stocks and evidence of grapes processing.
Until the 20th century, wines were fermented with yeast and the entire process relied on naturally occurring yeasts. The wine fermentation led to inconsistent results, and since the process took a long time to complete, the chances of spoilage also increased vastly. Amongst many, the most significant advances in winemaking were the introduction of pure starter strains of Mediterranean Saccharomyces cerevisiae (commonly known as brewer’s yeast) by the 1960s. Since then, commercial wine fermentation has included these S. cerevisiae strains, which has led to multiple wine yeast starters cultures across the globe. Another game-changing innovation was the introduction of screw-cap tops and synthetic corks. These new-age bottles hugely challenged the traditional natural cork and made a significant impact on 20th-century winemaking.
With the onset of the 21st century, another exciting innovation came, i.e., a process termed micro-oxygenation (in the trade known as “MOX”) that reduces some risks associated with the ageing of red wine due to traditional methods. Apart from the “mox process”, DNA sequencing has been a recent trend that enabled the researchers to trace the spread of S. Cerevisiae in commercial wines providing the possibility for improved wines in the future.
Despite all the technological and scientific innovations, winemaking and wine consumption invoke images of luxurious slow life with bucolic landscapes. Saying so, it is a significant business sector with a mix of ancient markets that serve as a home to some of the finest ancient wines along with modern-day markets that are developed in recent history with the increase in scientific innovations and consumption patterns. The most established wine markets in Europe (namely Portugal, Italy, France) have their per capita consumption at over 35 litres/ person per year compared to Australia with 23.9, the US 9.9 and just 3.5 litres per person per year in China. The largest aggregate wine markets are the USA, China and France due to population numbers.
The biggest wine importers are Germany, the USA and the United Kingdom since wine consumption depicts a luxurious lifestyle where consumers of the developed economies look forward to new tastes and experiences. Premiumization has become the new buzzword for wine consumers, thereby attracting long-term revenue from the world.
Despite all the history of winemaking, modern-day winemaking is a highly industrialized sector that is outgrowing its consumption numbers with each passing decade. Being a highly industrialized market, the present-day winemaking market has its own set of constraints and drivers to succeed in the years to come. Let us take a look at some of these:
Winemaking Market Drivers
Wine consumption has witnessed rapid development in the past few decades, where consuming a glass of wine has become a sign of social status, supporting the growth of low alcoholic beverages in the market. Moreover, with an increase in demand amongst the millennials, owing to its refreshing appeal and ABV offerings, the wine manufacturers are encouraged to launch and innovate products, ensuring market growth.
Another key driver to the growth of the wine industry is the emergence and rapid growth in the e-commerce sector. Apart from purchasing from specialized stores, buying alcohol from e-commerce sources has picked up as a trend, and according to the industry sources, the trend is here to stay.s
According to the Ministry of Foreign Affairs Netherlands, online sales in developed nations like Europe and North America are expected to grow by approximately 15% annually. Focussing on the trend, manufacturers are developing new e-commerce platforms to expand their sales in the market. The report by the ministry further explained that with an improvement in the distribution network and technical advancements, the e-commerce sector could further bolster growth in the future.
Winemaking Market Restraints
With the upward trend comes the downward trend, and the same applies to all market sectors. One of the significant restrictions in the wine industry is introducing new alcoholic beverages, making the consumer shift to a new format. The above trend can halt the consumption of wine and reduce its market share considerably compared to other alcoholic beverages.
Another constraint can be the tariffs imposed upon by the importing countries, thereby increasing the cost of a wine bottle. These tariffs can be expressed as: “ad valorem“, with one rate or different rates according to the price level of the product; specific volume-based tariffs (per litre); specific alcohol-based (alcohol strength); a mix of ad valorem and specific.
Apart from tariff trade barriers, non-tariff barriers refer to a broad and heterogeneous range of policy interventions. These non-tariff barriers are other than border tariffs that affect and distort trade in goods, services, and production factors. These include technical barriers to trade which the WTO has regulated through two agreements (Agreement on Technical Barriers to Trade and the Sanitary and Phytosanitary Agreement) based on shared principles of harmonization, equivalence and mutual recognition. Implementation of such WTO regulations has given rise to some critical issues and has not proved effective at preventing such technical barriers.
Global Wine Market
The global wine market is expected to reach a healthy CAGR (Compound Annual Growth Rate) of 7.1% in the forecast period between 2019-2026. The latest report available for the wine market contains data for historic years 2017, the base year of calculation as 2018 and the forecast period of 2019-2026.
The wine market is segmented, and the growth of the industry is based on various segments. To understand the global wine market, let us give a closer look at each of the segments:
a. Based on the type of wine
The sector can be divided into still wine, sparkling wine, fortified wine and others. In 2019, the still wine segment was expected to grow at a CAGR of 7.0% in the forecast period of 2019-2026. However, it is the sparkling wine segment that grew by 8.0% for the same forecast period.
b. Based on Color
Red wine primarily dominates the segment, closely followed by white wine, rose wine and others. In 2019, the red wine segment grew at a CAGR of 7.30% for the forecast period of 2019-2026. However, the white wine had the edge over the red wine for the same period and grew at a CAGR value of 7.33% for the same forecast period.
c. Based on product type
The market is segmented between flavoured and unflavored wines. In 2019, the unflavored segment was expected to grow at the CAGR of 7.49% in the forecast period of 2019-2026. The growth has been the highest recorded growth for the segment.
d. Based on packaging type
Bottles, cans and others categorize the segment. The bottling segment can be sub-segmented as the plastic bottles and the glass bottles. The bottling segment being a pioneer, is expected to grow at a CAGR of 6.9% in the forecast period of 2019-2026. However, an interesting observation that gained huge interest was that the canned segment is expected to grow with the highest CAGR of 7.9% for the same forecast period.
e. Based on Body Type
High, medium and full-bodied wines ornament the segment. In 2019, the full-bodied segment was expected to grow at a CAGR of 7.2% in the forecast period of 2019-2026.
f. Distribution Channel
The market under the segment is labelled as on-trade and off-trade distribution channels. The on-trade segment is further sub-segmented as the speciality stores, online retailers and others. In 2019, the off-trade segment was expected to grow at a CAGR of 7.2% in the forecast period of 2019-2026.
Due to the health benefits, people globally prefer wine consumption, and the production is ever-increasing in the present century. With the lifestyle changes, wine is being consumed more (being an elite drink) in comparison to other beverages. If wine consumption and production maintain the pace at which it is growing presently, the industry has a bright future. However, it is essential to mention here that globalization has brought many changes in the production of wine and its distribution networks. Some of the changes can be:
· cost of producing wine (which is considered a barrier) in increasing the overall sales of wine.
· Set of regulations that have become stricter by the year. These regulations are in the form of market intervention, rules concerning marketing and production, trade with other countries and the level of competition.
All these factors pose a heavy understanding of entering into an international market, making it even more challenging to capture the desired results.
With multiple benefits coupled with few disadvantages, wine and wine production remain the most elite form of alcoholic beverage. It is still amongst the essential agricultural activities around the world. So, how does wine production gets impacted due to global warming? How does wine become sustainable to minimize the use of crucial natural resources?
Let us understand the first phase, i.e., how global warming impacts wine and wine production globally?
Global Warming and Wine Industry
For most of the wine-growing regions, impacts of climate change can be seen and felt, resulting in significant shifts in sustainable viticultural development and production for the decades to come. Severe changes in the weather have destroyed the vineyards, where wine grapes are highly susceptible to changes in the climate. The production of wine is vulnerable to climate change, from the tangible health of wines to the taste and quality of the finished bottles created.
According to a study published in the Proceedings of the National Academy of Sciences (PNAS), up to 56% of current wine-growing lands may no longer be suitable for vineyards if the planet warms up by two-degree celsius. The figure could climb manifolds is by 85% when the temperature increases by four-degree celsius. The study used historical data for eleven grape varieties to create the model. According to the same study, cooler regions such as New Zealand, the Pacific Northwest and Germany would remain relatively unaffected by the changes in the climate. The winemaking industry has been hit very hard as its core ingredient, i.e., the grapes behave somewhat finicky with the hotter temperatures. The hot temperatures produce overripe grapes, which in turn wines that tastes strangely than what it must taste like, and the changes are only to intensify in the future.
Climate Change will lead to economic impacts at different levels of the wine industry, and the changes in flavour, composition, and yield could bring harsh impacts on the farmer’s income due to irregular crop production. Additionally, it will impact the value associated with the vineyards as competition for growing grapes would be higher in many different regions. With a geographical shift and a possible redistribution of the regions favourable for growing wines, competition might increase between regions and markets. With all these problems associated with the increase of global temperatures, the policymakers must move ahead and take concrete steps to curb the rise in temperature so that the global wine industry is saved from destruction and extinction both at the same time.
Additionally, the winemakers must also embrace green and sustainable technology to stay relevant in the present scenario. In this context, embracing solar energy, zero-carbon footprints, and adopting sustainable ways of living have become the need of the hour and can be called the irreplaceable measures in the decades to come.
So, before we understand how we can adapt to climate change by adopting sustainable ways of winemaking, we must spare some of our thoughts in understanding what sustainable wine-growing is?
Sustainable Wine-Growing
Sustainable wine grape growing is about calculating the costs involved in growing grapes and how it is sold to adopt sustainable farming methods to achieve the desired results. In other words, in order to restrict the impact of climate change and also adapt to practices like cover-cropping, compost addition, use of organic or synthetic fertilizers, choosing amongst the pesticides, mowing vs sheep grazing, management of hedgerows for bio-diversity and so forth to achieve environmental sustainability and economic profitability.
It is vital to understand that to achieve higher prices for the crop, vineyards must adopt all the practices mentioned above. However, it is ironic that these sustainable practices can only be adopted when the farmers receive a fair price for their crop.
Sustainable wine-growing is all about adapting to weather conditions and yet producing premium wines. The recent trend has suggested that many vineyards have shifted polewards to restore the grape quality and maintain a healthy ecosystem to achieve sustainability at the production stage. As per a study (Kay, 2006), the USA could lose 81% of its premium wine grape acreage by 2100, and to restore the quality of the grapes and subsequently of the vineyards, efforts must be made in collaboration with both the government and the farmers that vineyards are converted into more heat-resistant ones along with sowing of hybrid variety of grapes that are adaptive to climate change. Both those mentioned above will ensure a high amount of sustainability at the production stage.
Sustainable wine-growing can happen once we understand how climate change is impacting vineyards and grape production. It is easier said than done, but to achieve high levels of sustainability, we must study the impact of rising temperatures in an in-depth manner. The factors on which the impact of climate change can be felt are:
1. According to a study done to study the impact of climate change, a rise in temperatures coupled with rising CO2 levels along with a shift in the humidity may increase the biomass, increased sugar (thus alcohol), and a decrease in acid levels leading to a significant impact on grape aroma and flavour change resulting to a significant shift in grape chemistry. The above will ultimately impact the industry at a substantial level.
2. Another global warming impact is the rise of sea levels which will ultimately inundate some of the most outstanding vineyards and wine-producing regions with floods. In addition to these, more inland vineyards may face highlighting levels of salinity in groundwater which affect wine growth. The sea-level rise will lead to the fear of earthquake that can spoil the vineyards completely.
3. Another negative impact that is important to mention is the rise in insects and insect-borne diseases as their temperature limits movement to polewards. These humidity borne insects may pose severe threats to more poleward resisting vineyards as the climate changes.
4. Changes to weather patterns and CO2 levels may affect the development and quality of OAK, the primary wood use to age wine in a barrel. The above would mean that when subject to increased CO2, it may result in an overall quality wine barrel by lessening the tannins released into the finished wine.
With the severe and adverse effects on wine production and the overall industrial damage due to climate change, it becomes mandatory that the global wine industry adapts to the global rise in temperature by adopting solutions. These solutions can be categorized as suggestions to the vineyards and suggestions to the winemakers. Let us take a closer look:
Suggestions for the Vineyards
i. To combat the rise in global greenhouse gases and temperatures, the vineyards must consider improving the soil-water balance through a change in canopy management to provide shade to reduce sugar and increase acids.
ii. Vineyards must consider nighttime harvesting and quicker delivery of the barriers to assure cooler berry temperature and avoid spoilage.
iii. Vineyards must consider introducing water cover crops in areas capable of supporting that are equipped to support such crops so that soil erosion is minimal and water and nutrient storage gets maximized.
iv. Vineyards must increase their usage of recycled water and create ways and means to reuse the water to practice water conservation at the highest level.
v. Vineyards also must focus on soil-water balance by adopting the following measures:
· Adopting effective irrigation delivery via drip-irrigation
· Enhanced soil structure/ composition (for water retention and nutrient load)
· Ensure effective erosion control and nutrient storage through the use of cover crops
· Reducing evapotranspiration by employing less frequent tilling and cultivation
These steps will balance the reduced water supply (Source: the impact of climate change on global wine industry- (ScienceDirect, 10th August 2014)
vi. Vineyards should also consider deficit irrigation strategies to offset the reduced water supply and promote optimal grape maturity and wine quality.
vii. The vineyards must ensure heat and light abrading cultural practices to offset the heat, drought, and light intensity in the vineyard and adjust and maintain berry and wine quality.
viii. Improvement in the cooling techniques can be another method to offset the impact of heat
ix. Vineyards can consider markedly increasing the wine crop load. The delay caused due to the technique mentioned will lead to the onset of fruit maturation
x. Vineyards should also consider grafting over a complete vineyard reinstallation to grapes that are more closely adaptable to the environment. The strategy ensures combating the impacts of climate change by a vineyard.
xi. To control the impact of increased sunlight, the vineyards must consider training techniques and row orientation.
xii. Integrated Pests Management (IPM) is recommended to offset the increase in pests. The technique will ultimately ensure climate management by less dependence on agrochemicals, thus, controlling chemical emissions due to decomposition.
Suggestions for Winemakers
In addition to the above measures, the winemakers can also adopt the following measures:
· Installing cooling equipment in the winery to offset the impact of warming temperatures, ensuring completed primary and malolactic fermentation
· Reinspection of cellular hygiene practices along with the use of antimicrobials and antioxidants to reduce the impact of warm temperatures
· Alcohol-tolerant yeast can be used to control the effect of higher sugar and alcohol levels
· Install sugar reducing techniques within the winery to curb the higher sugar levels
· Acidification in the winery can help reducing acidity and promote microbial stability
· New blending techniques such as blending wines from different terroirs and regions to offset the vintage variability must be adopted
· Leaving the white wine longer on their lees to conserve fruit-aroma compounds and protect them from oxidation must be considered to reduce acidic levels and stop early harvesting
· Scheduling harvesting to offset the early onset of ripening of fruit
· Renewable sources instead of the burning of fossil fuels must be incorporated
· To maintain operational viability and competitiveness, a system of “planned change” must be introduced
By understanding the ways that can be adopted to reduce the harsh climate impacts on the vineyards and the overall wine production, wineries can aim at becoming sustainable in every possible way, i.e., achieving the long-term vision of attaining economic viability and reducing environmental unsustainability.
“Sustainability is the need of the hour.” Every industry must aim to achieve sustainability at the lowest level of its value chain to attain the global target of net-zero emissions.
So, how does the wine industry is preparing itself to be environmentally sustainable and economically profitable both at the same time? Let us understand:
Sustainability and Wine Industry
We all know that sustainability and the environment have been increasingly gaining momentum, and the wine producers hope to build commercial success around sustainability and environmentally friendly wines. To review the progress made in the direction of sustainable winemaking, it is necessary to refer to the work done by various international agencies, namely the International Organization of Vine and Wine (OIV) and the International Federation of Wine Spirits. Most of the wine-producing countries are a part of either both or at least one of these organizations. The joint efforts of these two organizations have led to the development of two major guidelines:
a) Guidelines for Sustainable vitiviniculture (production, processing and packaging of products)
b) The Global Wine Sector Sustainability Principles Project
The guidelines for sustainable viticulture are that the triple bottom line of economic, environmental and social sustainability should be promoted by implementing appropriate environment sustainable programs applied to production, transformation, warehousing and packaging. Identification of these environmentally sustainable activities must be based on risk assessment of the environment, and priority should be given to unique risks in individual geographical regions where the vineyards are located.
As per the OIV guidelines, the risks can be assessed based on on-site selections (of the vineyards), bio-diversity, variety selection (for new vineyards), solid waste management, and agrochemical use. Additionally, the Global Wine Sector Sustainability project guidelines consider carbon accounting, transportation and fossil fuels. Moreover, promoting awareness through educational opportunities and partnerships with stakeholders can strategically support action to improve sector sustainability.
As per the guidelines, it becomes essential that the implementation process is smooth and collaborative. With multiple ways and means available for sustainable implementation in the wine industry, careful analysis and detailed research marks implementing these measures. Some of these measures are:
Amongst the non-conventional production and transformation practices, methods that minimize the negative impact of agricultural and food production: two primary standards are organic and biodynamic. In this regard, for wine, as for food, there exists a variety of country-specific regulations, certifications, logos, and schemes. The essential requirement at this stage for organic winemaking is the use of organically grown grapes. However, the definition of organically grown grapes differs from country to country based on the use and non-use of preservatives during the production process. The difference in regulations represent the importance of non-tariff barriers to international trade and hinder growth in organic and bio-dynamic exports.
It is necessary to mention here that the European Union recently (the year 2012) approved an organic winemaking regulation, while viticulture has been regulated since 1991.
There must be a fair trade based on economic, environmental and social standards in all business forms. In this regard, wineries must create environmental friendly viticulture, protect ecosystems and their workers’ health to achieve sustainability at the lowest possible levels. It is interesting to note that globally, nearly 21 million litres of wine were sold via fair trade practices in 2013, which was 27% above what was sold in 2012.
The above sustainable practices can be achieved by introducing and adapting to various wine-growing programs that enhance the sustainability efforts of the individual winemakers and the wine-growing areas. These sustainable programs can be in the form of education and training to the wine producers and their workers to achieve continuous improvements in sustainability efforts. However, achieving the above-said sustainability can be crucial since resources are scarce, and efforts in the direction of incorporating sustainability as an important part of carrying out business activities are limited.
Christ and Burritt conducted a detailed analysis in the mentioned regard and summarised these said limitations as follows (in the words of the authors itself):
a. Water usage and management have been crucial since the wineries do not have the data to control the usage of water and identify the process responsible for wastewaters. With a view regarding resource availability in various regions, water usage in the wineries is optimal and fall short of best practices.
b. Solid-waste management is another factor during the winemaking process. The waste is either organic waste or inorganic waste. Organic waste does have a reuse market; however, the inorganic waste (i.e. packing materials, chemical containers, landfills and incineration, and more.) does not have a beneficial environmental impact and lack reuse and recycle.
c. Energy use and the emissions from the GHG is another aspect that needs to addressed immediately as a large amount of energy is consumed in winemaking generating significant gases. The use of fertilizers at the vineyard level is low on emission levels; choosing and adopting ecological transportation options at the bottling stage and consuming recycled bottles are ways to curb the harmful gas emissions.
d. Vineyards in many countries have shifted towards the northern pole to get an environment conducive for wine growth, resulting in deforestation and hydro-ecological imbalance. This has made the land usage and impacts arising from the excessive usage prone to environmental imbalance.
The above can be stated as some fundamental ways to adopt sustainability at various levels. However, the path to achieving the said sustainability is challenging and long-drawn; adopting such practices will give the wineries and the winemakers an edge over the other competitors. Adapting to these practices can help them gain a competitive edge, create differentiation (in techniques/ practices/ management processes), build brand reputation and public image, improve the quality of their product, lower their legal regulations, and achieve greater operational efficiency and achieve overall economic profitability.
CONCLUSION
The wine industry worldwide operates in different natural and social contexts; thus, the one-model-fits-all approach to implementing three dimensions of sustainability (environment, social and economic) is not realistic. The competition amongst companies and the countries for a market share of wine production is fierce and ever-growing.
As consumers become more aware of the vulnerable global environment, demand for eco-friendly agricultural products and practices is continuously increasing. The future wine producer would be perceived as the conscious environmental steward and adopts all necessary steps and practices. Overall, the industry is on its path of adopting environmental friendly measures and is taking initiatives on war footing to curb soil erosion and pesticides on the overall environment.
Lastly, as we learn the basic biology of human perception and flavour preferences, wines will become more targeted to the generic differences of the consumers. Consumer olfactory profiling will be standard and used to guide production decisions and the marketing of wines. Additionally, the industry must play a proactive role in promoting sound and sustainable stewardship, as it will be a decisive motivational factor for wines.
The need of the hour is to act promptly and responsive to achieve sustainability and control the impact of climate change.
Let us hope we achieve it fast…..