BORDEAUX, FRANCE – June 21, 2017 – Climate – both political and planetary – was a major underlying theme of Vinexpo Bordeaux 2017, which draws to a close today at Bordeaux’s Parc des Expositions. The show lived up to its industry-leading reputation with a deep dive into global issues impacting the wine trade, from Brexit to climate change to the sustainability movement.
Vinexpo’s June 18 panel discussion, Fire and Rain: Climate Change and the Wine Industry, took on a heightened sense of urgency in the wake of the U.S.’s recent withdrawal from the Paris Agreement. Moderated by Wine Spectator’s Dana Nigro, the hard-hitting session addressed the impact of climate change on viticulture and wine quality, exploring the current science, intergovernmental initiatives, and climate-related challenges vintners are experiencing in their respective regions. Kathryn Hall, former U.S. ambassador and proprietor of Napa Valley’s Hall Vineyards, and John P. Holdren, former senior advisor to President Barack Obama and a leading international expert on energy and climate change, were among the panelists offering insights. Of note:
- What’s at stake? Reduced grape quality, increased vineyard costs and shifting geographic boundaries within which premium wine grapes flourish will result from a combination of the most obvious effects of climate change. For consumers, the result will be overripe fruit aromas and tastes, lower acidity, higher sugar and alcohol, and cooked flavors. While the impacts will vary, with temperature increases benefitting some regions and damaging others, per Holdren, the increases in extremes will be damaging for all.
- Individual experiments are underway. Spain’s Miguel A. Torres, president of Bodegas Torres, is aiming for a 30 percent reduction in CO2 emissions by 2020, with reduction levels already reaching almost 16 percent in 2016 compared to 2008. His bodegas are focused on water recycling, rainwater collection, changing rootstocks, lowering planting density, lighter bottles, and more bag in box packaging, among other efforts. In Italy, Super Tuscan powerhouse Gaja Winery is focused on diversifying the vineyard’s vines, grasses and insects to boost vine resilience, reduce the risks associated with monoculture and prevent a single pest gaining control, per Co-owner Gaia Gaja. Hall, whose eponymous Napa Valley winery was the first in California to be awarded a Gold Certificate for Leadership in Energy and Environmental Design, acknowledged that initial investments in green energy improvements such as solar paneling can be high, but they’ve seen energy cost reductions of 50 percent or more over the long-term.
- Napa Valley presents a united front while others feel divided. Hall noted that the current lack of national leadership to address climate change in the U.S. is being compensated for by local associations and regional leadership. For example, one of Napa Valley Vintners’(NVV) goals is to include all regional wineries in the Napa Green environmental certification program by 2020. Forty percent are currently engaged. In contrast, Torres and Gaja were less optimistic, with Torres saying he doesn’t see any real concern for climate change by Spain’s younger generation, who are more focused on economic challenges. Gaja suggested that her Italian contemporaries might adopt climate change initiatives once outcomes are proven, but noted testing is still a work in progress.
Taking the stance that environmental sustainability is the future of winemaking, NVV hosted a June 19 pop-up seminar at Vinexpo on Napa Green, a comprehensive environmental certification program for Napa wineries. Vintners from Silver Oak Cellars and Twomey Cellars briefed visitors on the program’s soil-to-bottle approach and guided a tasting of four wines that carry the Napa Green label: 2004 Robert Craig Cabernet Sauvignon, 2013 Twomey Merlot, 2005 White Rock Vineyards Laureate Cabernet Sauvignon and 2012 Silver Oak Napa Valley Cabernet Sauvignon. Wineries must exceed stringent environmental regulations aimed at conserving natural resources for the long-term, and recertification is required every three years to demonstrate continual improvement. Employee engagement and social responsibility are highly emphasized via the Napa Green Winery program, underscoring the importance of the human element to sustainability.
As a direct consequence of Brexit, wine has never been so expensive in the UK. Prices increased by three percent in the first quarter of 2017, compared with only a one percent increase in the previous two years, per Miles Beale, Chief Executive of the UK Wine and Spirit Trade Association during yesterday’s think-tank session, The Post-Brexit Wine and Spirits Market. Experts from across Europe discussed Brexit’s likely effects on duty, retail pricing, category management and distribution. The panel also looked at the impacts on travel, retail and the protection of origin destinations. Among their conclusions:
- Wine traders aim for a “no changes, please” Brexit. Panelists unanimously prioritized little or no change to current trading arrangements. Jean-Marie Barillère, president of the Union of Champagne Houses, said Brexit should be a “non-event” in UK-EU trade terms, despite political desire to make an example out of the UK. And it was agreed that the UK market is worth fighting for by traders on all sides, noting the symmetry of its trade balance, with about €2.5 billion worth of wine entering the UK, and about €2.2 billion worth of spirits exported.
- Political meddling should be minimized. Speakers were keen to see politicians act responsibility and avoid using any sector as a bargaining chip, particularly wine and spirits. Barillère used France’s experience as a cautionary tale, noting exports never fully recovered from global backlash to the 1990 nuclear weapons testing in the South Pacific.
- Labor and immigration are intertwined. Referencing those working in the hospitality trade, many of whom come from outside the UK, Sean Allison, director of Château du Seuil and a former Merrill Lynch economist, said, “The labour market is another way of saying immigration policy. If we don’t have access to those people, we will have a very difficult situation in terms of the profitability of these industries. I don’t see how we can decouple the immigration argument from the trade argument.”
- Market unsteadiness driven by Forex and taxes. Because the devaluation of sterling has pushed wine prices up, foreign exchange fluctuations were highlighted as a barrier to UK sales for some wines. Broadly speaking, however, forex was seen as less of a problem than taxes, with Conviviality’s Group Wine Buying Director Andrew Shaw saying currency swings are three percent or less of the total cost of the product.
- Premium wine may benefit in London. Discussing London’s standing as a fine wine hub, Shaw suggested that rising prices in the UK could lead customers to trade up, whether due to inflation or because they want to buy higher quality products. And that could, in turn, mean the London market “for fine wine increases because we engage with the customer at a different level.”
Founded by the Bordeaux Gironde Chamber of Commerce and Industry in 1981, Vinexpo is the world’s leading show for wine and spirits professionals and a partner for the wine and spirits industry worldwide. Vinexpo is held in Bordeaux in odd-numbered years. Since 1998, Vinexpo Hong Kong (formerly known as Vinexpo Asia-Pacific) has taken place in even-numbered years, and in 2014, Vinexpo expanded to the Japanese market with the debut of a third biannual fair Vinexpo Tokyo. The two have become key exhibitions of the industry in Asia. In 2017 Vinexpo launched a new concept, Vinexpo Explorer, featuring two days of business meetings and discovering vineyards. Vinexpo New York, which takes place for the first time March 5-6, 2018, will open doors to the U.S. market for international exhibitors.