Roosevelt Institute | Cornell University

Global Warming's Next Victim: Wine

By Kavin LamPublished November 6, 2014

The effects of global warming may often seem impalpable. However, they can definitely be close to home, as revealed by how wine growing is directly threatened by global warming. The damage to the wine industry exemplifies how global warming affects all aspects of our lives.
By Kavin Lam, 11/6/14

The London International Vintners Exchange (Liv-ex) is the major international market for wine. Trading on the Liv-ex has ramped up and has comparable profit margins to the S&P 500. From 2005 to 2013, the compounded annual growth rate of Liv-ex was 3.4%, while the compounded annual growth rate for the S&P 500 was 4.61%.

The international thirst for wine is largely driven by Chinese demand. The Lafite, a Bordeaux red, is especially popular and is seen as a status symbol in Chinese society. As a result, the Chinese bought 1.86 billion bottles of red wine in 2013.

As the demand for wine increases, the price does as well. A bottle of Lafite 1982 was originally worth $3,946, but today is now worth $40,250. Compared to 2010, the wine grape prices in 2011 saw a 12% increase for red grapes and an 8% increase for white grapes.

Surges in prices of wine grapes and wine consumption have made the wine market very lucrative, but also increasingly vulnerable to supply shocks.

Global warming is especially threatening to wine grape crops globally because of its detrimental impacts on local climates. Wines are distinguished by the terroir of their respective regions. Their unique flavors are largely determined by the local geographical and climatological conditions. This has such a large influence that wine made in France is named by its terroir, instead of the grape variety. Maintaining each region's wine producing abilities is vital to sustaining the wine trade and local economies.

Global climate change has profoundly affected winegrowing. In nearly every winegrowing region, from California to Australia, vineyards have had to adjust to earlier growing seasons and greater average temperatures. Earlier growing seasons and warmer average temperatures makes pest and disease management difficult. The earlier growing seasons is representative of the imminent effects of climate change. Additionally, cooler regions, such as Mosel in France and the Rhine Valley in Germany, have produced less acidic wines. Mosel and Rhine Valley are both known for their acidic, less sweet wines. With rising temperatures, this damages these region's abilities to stand out in the international wine market.    

Some wine-producing regions have benefited from climate change. 2009 and 2010 Bordeaux wines were praised for their exceptional quality, while wines from California produced in 2012 came from huge yields of high-quality grapes. However, these appear to be outliers in the broader landscape of wine production.

The future doesn't appear to be very sweet. Grapevines are extremely sensitive to climate change. Wine grapes are heavily dependent on the weather for their flavor because variations in sun exposure changes compounds in the grapes that turn certain flavors into undesired sugars. Additionally, climatic patterns also affect a wine's alcohol content, tannin, and color. Even though the California grape harvest of 2012 was high, California has seen a consistently smaller harvest, particularly in 2009 and 2010. Bordeaux and other regions of France will have compressed growing seasons once it gets too warm. Bordeaux also experienced a terrible year in 2013 due to rain, hail, and rot. A recent climate projection predicts significant decreases in wine production by 2050, including an 85% decrease in production in Bordeaux, Rhone, and Tuscany, a 74% drop in Australia, a 70% drop in California, and a 55% drop in South Africa.

Even though climate change has many known detrimental impacts, it also has hidden consequences with major economic implications. To preserve the wine production industry, we need to mitigate climate change.