By Olivier Gergaud, Professeur of Economics, Director of Centre of Excellence Food, Wine and Hospitality at KEDGE
Consumers have shown that they are willing to pay extra for organic produce grown without pesticides, even if it doesn’t taste better.
That has not been the case for organic wine. Organic-labeled wines generally sell at prices similar to those of non-organic wines. And that’s despite growing evidence that they actually do taste better.
A new study by Magali Delmas, an environmental economist at UCLA Anderson School of Management, and Olivier Gergaud, an economist at KEDGE Business School in Bordeaux, France, found that organic wines are judged to be higher quality by experts — but that the difference is not just a matter of whether the wines came from organic or conventionally grown grapes.
That is, the difference in quality is apparent for wines that certified organic by a third-party accreditation service, but not for those that are self-labeled by a French wine industry-backed group for using conscientious practices.
Three esteemed wine guides — Gault Millau, Gilbert Gaillard and Bettane Desseauve — scored the third-party–certified wines an average of 6.2% higher than those that were certified organic by an industry-backed group. The findings are based on ratings data for 128,182 French wines that were produced from 1995 to 2015.
Wines that were certified as biodynamic by the third-party association performed even better, scoring 11.8% higher. Biodynamic wines take organic farming a step further, using methods that time planting, trimming and harvests to coincide with seasonal and lunar cycles, and integrating animals for a more complete ecosystem.
“Organic and biodynamic wines showed much higher quality,” Delmas said. “It’s another example of sustainable goods providing additional benefits to consumers.”
The paper, published in Ecological Economics, follows a 2016 study by Delmas aind Gergaud that yielded similar findings for California wines. In that research, critics scored eco-labeled, organic California wines 4.1% better than unlabeled wines — those not certified by a third-party organization as organic or biodynamic.
A biodynamic vineyard near Ukiah, California. Biodynamic farming uses methods that time planting, trimming and harvests to coincide with seasonal and lunar cycles, and integrate animals for a more complete ecosystem.
Delmas conducted the new study on French varietals to understand whether the results would hold in the world’s second-largest wine producing country (after Italy). France’s wine-making traditions date back 2,600 years, and in 2019, the nation produced over 1 billion gallons of wine — enough to fill the 90,000-seat Rose Bowl in Pasadena 7.4 times.
Conventionally grown wine grapes use more pesticides than most other crops, Delmas said. That puts the health of farm workers, wildlife and neighboring communities at risk.
The dangers of pesticides’ use in winemaking was highlighted dramatically in 2014, when teachers and students at a rural school in Bordeaux were hospitalized due to exposure to the toxic chemicals. Protests followed, and winemakers faced strong public pressure. The wine industry in France has evolved more rapidly towards organic farming methods since then.
Rather than turning to third parties to certify that their wines are either organic or biodynamic — which would involve inspections and audits to ensure products meet certain criteria — some French winemakers devised their own industry certification standard. In the new study, wines that were self-labeled as having been produced using conscientious practices according to that standard received scores that weren’t measurably different from those of conventional wines.
Overall, more French winemakers are going organic or biodynamic. Among the wines analyzed in the study, just 3.87% of wines were third-party certified as organic or biodynamic from 1995 to 2000; the figure increased to 7.37% for wines produced between 2001 and 2015. Delmas said owners of smaller vineyards don’t want their families and farmworkers exposed to pesticides, and larger vineyards are beginning to follow their lead.
That’s worth clinking glasses about.
“It seems like another step in the right direction,” Delmas said. “Not just for the health and the environment, but for wine quality.”
The challenge of communicating to consumers that organic wines actually taste better, however, is another hurdle. In her 2018 book “The Green Bundle: Pairing the Market with the Planet”. Delmas suggests that wine producers advertise their products’ quality rather than their environmental benefits. And that they communicate that organic and biodynamic practices are actually in line with centuries-old practices — a nod to the fact that the industry is so steeped in tradition — whereas the use of synthetic pesticides didn’t begin until the 1930s.
About Olivier Gergaud:
Olivier Gergaud is Professor of Economics at KEDGE Business School and affiliate researcher at LIEPP in Sciences Po Paris. He holds a Ph.D. from the University of Reims, 2000 and an accreditation to supervise research from Sciences-Po Paris, 2009. His research areas are Cultural Economics, Wine Economics, Sports Economics, Economics of Pro-Social Behavior and Restaurants Economics. He has been visiting professor at different European (Sciences Po Paris, Université Libre de Bruxelles) and North American universities (NYU, UCLA, HEC Montréal). He has been awarded several prizes including the President’s prize during the 12th International Conference of the Association for Cultural Economics International (ACEI) and a Certificate of Merit for his Ph.D. from the French Economic Association. Olivier Gergaud has published several papers on different topics in applied economics, some of which appeared in international journals such as Economic Journal, Economic Inquiry, Journal of Portfolio Management, Family Business Review, Journal of Sports Economics, Journal of Wine Economics, Journal of Cultural Economics and got substantial coverage in the media (e.g., The New York Times, The Guardian, The Sunday Telegraph, The Washington Post, The Los Angeles Times, Financial Time, Le Monde, France 5, etc.). In addition, he serves on the Editorial Advisory Board of the Journal of Wine Economics and on the Editorial Board of the Journal of Prediction Markets.?
About KEDGE Business School:
KEDGE Business School is a benchmark French business school with 4 campuses in France (Paris, Bordeaux, Marseille and Toulon), 3 overseas (2 in China, in Shanghai and Suzhou, and 1 in Africa in Dakar) and 3 partner campuses (Avignon, Bastia and Bayonne). The KEDGE community is made up of 14,800 students (23% of whom are international students), 192 full-time lecturers (45% of whom are international), 201 international academic partners and 70,000 graduates worldwide. KEDGE offers a portfolio of 36 training programmes in management and design for students and industry professionals. It also provides customised educational programmes for businesses at national and international levels. KEDGE Business School is AACSB, EQUIS and AMBA-accredited, and is a member of the Conférence des Grandes Ecoles. It is also recognised by the French government, with officially approved programmes, and is EESPIG-certified. KEDGE is ranked 34st by the Financial Times in the European Business School rankings and 41th globally for its Executive MBA.