Winemaking weather woes muddle vineyard economics, study shows

As winemakers grapple with an onslaught of challenges – from fewer drinkers to steep labor costs – the toll of extreme weather is bringing up questions about the most fundamental aspects of the industry.

“Around the world, wine regions are confronting the same question: How do you keep making great wine when the climate that once defined your 'terroir’ is shifting?” 

That’s the question Cornell University researchers took on in a new study.

“Extreme temperatures, unpredictable rainfall, destructive hailstorms, declining groundwater quantity and quality, and rising soil salinity create significant year-to-year uncertainty in vine management,” the study says. “There is clearly a need to identify management practices that limit losses.”

Temperatures worldwide have climbed more than 1 degree Celsius, or 1.8 degrees Fahrenheit, since preindustrial times. At around 86 degrees Fahrenheit, a plant's ability to convert light from the sun into chemical energy starts to fail. At about 95 degrees Fahrenheit, compounds that give red wine its color begin to break down, and above 104, cells can become fully damaged, according to the study. 

Vintners in California’s roughly $70 billion wine industry have mulled in recent years the prospects of replacing iconic varietals in storied locations like Napa Valley, where thin-skinned pinot noir has been grown for more than a century, or perhaps moving north to produce in cooler conditions. The question of whether to “go, stay or change” is becoming more pressing as other problems intensify, like lower demand, regulatory woes and an ongoing labor crunch. 

Yet the connection consumers have with certain varietals makes replacing grapes a risky proposition. The 2004 Academy Award-winning movie “Sideways,” a film about a wine snob going through a midlife crisis that led to a surge in popularity of pinot noir, demonstrated the intensity of some wine lovers. 

“Wine grapes are unique in that people are very attached to certain cultivars and the sense of the place where they come from,” Justine E. Vanden Heuvel, a Cornell professor of horticulture, said in a statement. “That’s not true with most other crops. Do you care where your radish comes from?”

For a bottle of cabernet sauvignon, for example, the location of Napa Valley is a big deal. But blistering heat waves can drastically reduce production and change the wine’s flavor. 

Moving vineyards elsewhere may help alleviate the quality problem but there’s a potential economic cost on the branding side. 

“Cabernet commands some of the highest grape prices in the world. Consumers want to see it right on the label,” a summary of the study notes.

“Even inexpensive box and jug wine has the name of grape and place of origin on the front, and even among less-sophisticated consumers, there’s recognition of that,” said Bradley Rickard, Cornell professor of food and agricultural economics. 

The study looked at whether the grape, location or production method can affect what consumers are willing to pay for a bottle of wine. 

The researchers looked at the long-term economic return of three climate-adaption scenarios alongside a model of a vineyard’s life cycle, which can produce grapes for as many as three decades after waiting years for a first harvest. 

• Option one: Technology that shades vines from direct sunlight. This approach can lower grape temperatures and safeguard taste quality, but it’s also costly and requires replacement every few years
• Option two: Altering the grape. Rather than plant cabernet sauvignon, embrace varieties like as carignane that better handle hotter climates. “These grapes often yield more fruit in hot conditions, though they may fetch lower prices.” 
• Option three: Move. For example, leave Napa and go to a cooler area, like Lake County, which lies about 100 miles north of San Francisco. 

The report also polled more than 300 U.S. wine drinkers. Participants were shown hypothetical wine labels reflecting the three scenarios and asked how much they would be willing to pay.

Technology came out on top, with respondents saying they would pay about 17% more on average when told the wine used tools to guard grapes from excessive heat. Wines made from a different grape variety garnered a roughly 12% premium when consumers heard the change allowed growers handle climate change. 

Wines produced in a new region “received a modest boost in perceived value,” though the higher prices were likely temporary, lasting just a few years, before the novelty probably would fade, the researchers said. 

Overall, the optimal strategy changed depending on the severity of future heat waves. 

“If climate change brings only mild temperature increases, sticking with traditional cabernet sauvignon in Napa remains the most profitable approach,” the study found. “Under moderate heat stress, however, installing shade cloth can pay off, protecting yields enough to justify the added cost. And in the most extreme scenarios, switching to a heat-tolerant grape variety produced the strongest financial return.”