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The future of the wine industry: overlapping insights from international leaders Sourced from “Wine vision 2040” (25th of June 2020, UBC Wine Research Centre). Original language of the article: English.

Just as many other sectors, the wine industry has suffered these last months. In times of crisis, it is natural for us to plan for contingencies, to live day by day and hope for a better tomorrow. ‘To think about tomorrow’ was the theme that we asked our four contributors to ponder, so they could share their thoughts with an international audience from more than 30 countries.

We intentionally decided to leave it open-ended, with no directives or predefined topics. It was up to each individual to decide which subjects they wanted to focus on. Those that were important to them, based on their experience, background and vision for the distant years to come.

The panel was deliberately made up of varying profiles from different cultures. American, Argentinian, Spanish and French, the vineyards they originate from represent more than 50% of wine production worldwide. We also deliberately chose representatives from each of the essential components of the sector’s operation: a vineyard estate, a regional professional body, a specialized university and an international institution. Some countries have other kinds of organizations, which could have taken part in this roundtable. This multitude of actors, in an industry often described as fragmented, is also one of its characteristics. And it certainly is one of its strengths, as Pau points out, it is also one of its best bulwarks against crisis situations.

Not surprisingly, the contributions of Wine Vision 2040 feature many points of convergence. Although a certain interpretation should also be recognized, specific to each individual and dependent on their economic and social environment. Ultimately, as different as they are in their respective roles, Laura Catena, Pau Roca, Linda Reiff and Pierre-Louis Teissedre are all looking toward the same horizon, that of the sector’s future.

A shared vision on the challenges ahead and the basic elements to be preserved

The year 2020 was marked by unprecedented fires along the west coast of America and throughout Australia over the course of the last austral summer. This devastation naturally leads Linda to remind us of the challenges inherent in climate change. In Napa, winegrowers observe that fires are starting earlier in the season and their domino-like propagation in various places. Australia was also deeply affected by the immense spread of forest fires over a large part of the island-continent. Thanks to the reversed rhythm of seasons between the two hemispheres and the ability to benefit from one another’s experiences, Linda underlines how vital cooperation between the regions is for the future of industry. Pau makes the climate challenge his number one priority, with a particular emphasis on the notion of the preservation of species and our role as human beings in this respect. Laura also explored the theme of preservation, when she chose to create the concept of Catenamics and to highlight the importance of work carried out by the Catena Institute of Wine on the Malbec grape variety and its cultivation in the typical climate of the Andean foothills. It is interesting to read her persistence regarding a certain form of regionalism that addresses the fundamental question of identity in wine, and illustrates the ineffective nature of wanting to import to one region methods applied in another. The questions raised on the quality of resistant grape varieties, the adaptation of varieties, bio-protection in vines and wine... Many fields of research emanate or result from the effects of climate change, and Pierre-Louis reminds us how numerous these questions are, how they stimulate scientific thought and will require answers in the coming years.

At the same time, our contributors are faced with the issue of typicality. For Laura, for example, it’s about the character of Argentinian wines, which needs to be preserved and publicized; for Pierre-Louis, it’s about the search for authenticity and the inherent question of traceability; or for Pau, it’s about identifying with the terroir. In an interpretation of the future that calls for a broad vision, it is reassuring to observe that everyone pleads for a distinctive local or regional branding. Regularly, a form of historical irony demonstrates the merit of regional solutions in response to major global challenges. The future of the wine industry and the impact of globalization, as commented on by each speaker in their own way, is no exception to the rule, and the specific characteristics of a wine region are its best assets for succeeding in the commercial arena.

Among these characteristics, right at the forefront, are the human beings that compose it. The contributions from this future-oriented workshop retrace life stories and raise the question of human organization. Laura talks about her international experience and her personal reflection which led her quite naturally to take on the family business over the course of her life. Linda fulfills her role at Napa Vintners through the women and men who are the wine producers of Napa. Pau perceives a form of symbiosis in the thousands of actors attached to a territory and who together defend a brand or an origin. And Pierre-Louis asks if we should also address the question of education in wine and particularly, the type of wine that future consumers will be able to appreciate.

An interpretation of the future shaped by contextual realities

Of course, the world of wine will not escape societal issues. Pierre-Louis highlights the growing concern for public health issues and the safety of foodstuffs. It is necessary to improve the use of the antimicrobial formulations that come into contact with wine and to encourage responsible practices worldwide for vineyards and wineries. A focal point lies in the search for an alternative to sulfur dioxide, which protects the wine from oxidation. The USA, the world’s leading market in terms of value, has its own issues. Linda’s desire to introduce, as part of this reflection on the future, the question of inclusion and diversity in the wine producing sector is no coincidence. The topic is particularly sensitive in the USA, and it is clear that it is an underlying theme in many other regions of the world.

The creation of multiple value chains and the fragmentation of the actors are probably the industry’s best weapons against the crisis, because they are a source of micro-strategies and resilience, according to Pau. Inevitably, a wine producing sector that builds itself up year after year becomes a pillar of regional development and the emergence of a wine region invariably contributes to its economic growth. Laura Catena compares the Mendoza of yesterday to today’s Mendoza and the many changes that have taken place.

Unavoidably, the economic vision comes up against current circumstances and the COVID crisis forces us to rethink the sensory approach and customer relations. The OIV sees this as an opportunity to reconsider our growth model. Napa reviews its marketing methods to improve the notion of consumer commitment and seeks answers to questions by stimulating cooperation between actors. And it is up to scientific research to investigate the future of wines with a lower alcohol content or, on a different note, the real potential of derivative products from vines and wine.

The interesting thing about the prospective exercise is that it affords complete freedom to the structuring of thought and vision. While the contributions converge on a number of points, they differ in the nature of their testimony. One should not look for similarity in the style of the contributions, as there is none to be found. Each individual considers the future based on their own life accomplishments. The narrative options are naturally different, because for the future of wine, as for everything else, there can be no single point of view. Like wine, the diversity of the contributions is above all their primary asset.

The winery of the future (Laura Catena, Bodega Catena Zapata)

Laura Catena, Bodega Catena Zapata

I’m going to start by telling you a little bit about my story of how I went into wine, and then I will share with you one of my ideas for what the winery of the future should look like.

I’m the 4th generation of my family making wine. My family winery was started by my great-grandfather, Nicola Catena, who came from Italy to Argentina, and he was followed by the oldest son of the family, my grandfather, Domingo Vicente, who was followed by the next oldest son, my father, Nicolás Catena. So, not only did I have the wrong sex to follow my grandfather, but also, I had absolutely no interest in following anybody into the family winery because my objective in life was to help people and I didn’t think I could help people with wine, but I did think I could help people by being a doctor. So, I decided to study medicine.

But one day, in the mid ‘90s, my father called me, and this was after I had finished my studies in Biology at Harvard, Medicine at Stanford and the Emergency Medicine Residency at UCLA, and he said: “Laurita, we need your help. You need to go represent the winery at the ‘New York Wine Experience’, this very prestigious event in New York. They have invited us as the first South American winery and nobody here speaks English well, so you must go.” So I bought my first suit that I’d ever had, I went to this event, and I was in New York with my little booth, next to all the other wineries at this event, and I was all alone because the long lines were at the Californian wineries, the French wineries, the Italian wineries, and, worst of all, I had a very well-known Californian producer next to me… and people would taste their wine and then use my spittoon to spit, but they would not drink my wine.

The next day I called my father and said: “Papá, this dream you have…” Because my father had this dream of making Argentine wines that could stand with the best of the world. He had been to California as a visiting scholar at Berkeley and he had heard of the Californian wine revolution, he had heard of the Judgement of Paris and he had said: “I want to try and do this in Argentina.” He was trying to make Argentine wines that could stand with the best in the world. But I said to him: “This is an impossible dream because maybe you can make some good wines, but you won’t be able to sell them because there’s no market.” And so I decided to come work with my father to help him and our family. But I continued as a doctor because I still wanted to help others.

The next step was applying my knowledge, because I didn’t know that much about wine, but I did know about science and research. And, you know, in medicine, we have something we call “evidence-based medicine”, that you apply what you learn through science. What I found in wine was that there were lots of opinions, but often they weren’t science-based opinions. But first, I decided to go and do some research with my father, and we traveled to France. And the news we heard was not good. We went to see a friend in Bordeaux, we presented one of our wines from the more traditional regions, a Cabernet Sauvignon and he said to us: “This wine makes me think of a really nice Cabernet from the Languedoc.” And today the Languedoc is a very important region, making fantastic wines, but at that time for somebody from Bordeaux to say “your wines taste like Languedoc” was an insult. And what he was saying was: “This wine is from a region that’s too warm.” Then, you know, we talked to another producer in France, and he said: “Oh, you irrigate your vineyards…you can’t possibly have ‘terroir’ if you irrigate your vineyards.” And I was terrified… You know… We don’t have terroir… We cannot make one of these great wines. So, my father’s first solution was to hire consultants. He had consultants from France, from Italy, from the United States.

But what we found very quickly was that these consultants were trying to apply the knowledge from a different region to our region, which is by the Andes mountains and is a desert; it’s completely different from anything you have in Europe or even in other parts of the Americas. And for example, one of the consultants said: “You must remove the leaves, let the sunlight come into the vineyard.” And what happened in high altitude at 5,000 feet elevation? The grapes burnt. Then, another consultant told us: “You need to make Malbec like Cabernet Sauvignon, because it’s a Bordeaux variety.” And when you make Malbec like Cabernet Sauvignon, with very long macerations, you lose the fruit, and you don’t actually acquire anything in the flavor. Malbec actually needs to be made more like Pinot Noir, more like a white wine. This is what we discovered.

When I started working with my father after all this exploration, I decided to found the Catena Institute of Wine in 1995. And at the Institute we started studying our climate and what we found was that we did have a cool climate in Mendoza, in fact at 5,000 feet elevation, in a place where there were no vineyards. But we decided to plant. This was basically the Burgundian Champagne climate. But because of the cold weather in this place, we were told the grapes would not ripen, not red grapes like Malbec. But Malbec did ripen because of the sunlight.

So, you know, some of the things we did were following science and some of them were basically taking risks. And this is another thing I think will be important for the winery of the future. You need to take risks; you need to test hypotheses and then you need to use science to know if they are working or not.

Today the Catena Institute of Wine does over 1,000 micro-vinifications per year, we collaborate with local universities, with UC Davis, with University of Bordeaux, the University of Burgundy… maybe we will collaborate with the UBC – it sounds exciting – with Jacques Olivier and his team. But basically, what we found was that we needed to have our own internal team to understand our terroir, our altitude. And what we were able to find was that we could produce these great wines because we have this cool climate, and actually, that without irrigation – which was the way our land became fertile, we are a dessert, the irrigation canals were created by the native people hundreds of years ago – we would not have farming in Mendoza. But actually, these irrigation canals and our traditional methods of irrigation that involve looking at the vineyard with the eyes – it’s like art – actually did give place for terroir.

And at the Catena Institute of Wine, we did research and found that in two different parcels, one next to each other, we have completely different flavors and aromas of Malbec. So actually, our traditional way of irrigation did lead to deep root systems, two meters root systems, and we did have terroir.

A lot of this research that has happened over the last two decades has led us to a vision for the future. And we call this vision the Catenamics – our family name Catena means “chain” in Italian and, for me, Catenamics stands for the chain of life. And the ‘namics’ comes a little bit from biodynamics because my initial thought was ‘let’s do something that’s been tried somewhere else, like biodynamics,’ but then I thought: ‘Why should I use something that has been used 100 years ago in Austria, in Argentina?’ So, the concept of Catenamics is to use science to preserve nature and culture. And lastly, I want to talk about preserving culture. So Catenamics is science to preserve nature and culture. And I think this needs to be the vision for the future.

So, you know that for example, in Burgundy they have the name of World Heritage and I wanted Malbec to be recognized as a ‘world heritage’ grape because it’s a grape that’s 2,000 years old and that almost went extinct. And so this became one of our goals: ‘How do we preserve Malbec?’ And actually, we’ve done a really exciting wine label with the Malbec variety and I want you to take a look at it: ‘Malbec Argentino’ – you can find it on wine.com or any website, but it tells the story of the variety through the art, through the label. So just to finish, my journey first starting with ‘how could I help people make wine,’ and leading up to today, I believe that I actually help a lot more people making wine than as a physician – although I do help people as a physician – because if you were to see Mendoza when I was growing up, a very poor region, and you were to see Mendoza today, how it’s been transformed by viticulture, and because we are not exporting bulk wine or low quality wine, wine that would be a commodity, but high-quality wine, wine has brought prosperity to my region. And through wine, through elevating Argentine wine, I can actually help hundreds of thousands of millions of people in my region… And so that’s how my journey has ended.

Thriving through global collaboration (Linda Reiff, Napa Valley Vintners)

Linda Reiff, Napa Valley Vintners

Normally during times of challenge, we tend to retreat and withdraw to try to weather the storm, yet I propose something quite different as a way not just to survive but thrive. I challenge all of us to think of these times as opportunities to reach out even more, beyond our souls and beyond our borders to help each other, to share ideas, resources, and tips for success, because that can help all of us during times of crisis, and make us even more successful in the good times in the years ahead.

There are a lot of great organizations involved in today’s session, many focused on technical, regulatory and academic topics, and I am going to focus on tangible things for the producers in our regions, to try to help them immediately in these times. These are ways that you might be able to help, and we can help one another. I am going to offer three examples.

1/ Climate change and sustainability

My first example is actually a subset of that topic: wildfires. In 2017 we were hit by devastating wildfires in the north coast of California. I immediately reached out to colleagues in Washington State and in Australia for help and then we, the Napa Valley Vintners, developed a whole host of information, resources, contacts and ways to help our wineries in the immediate, real time during that crisis, which was influenced by what I had acquired from our colleagues around the world. These were practical, hands-on measures, and what our producers needed at that time – ranging from production methods, power and utilities, insurance issues, human resources, and media relations. And then earlier this year when horrible wildfires struck Australia, I reached out to our colleagues there and I shared everything that we had developed, and I know that they will do the same when unfortunately, another region has to deal with such a challenge. I hate what happened to us and to the other regions, but it has made our businesses stronger, and I know that we are now better able to deal with other natural disasters.

2/ Current global crisis Covid-19

We had a dramatic, negative impact on all of our businesses and organizations, industries and economies. Again, we went into action, using some of the same approaches from the previous challenge of the wildfires. Some examples of what we did: we created educational offerings, resources, contacts and ideas in real time to help our wineries and their employees. We’ve put together 60 webinars within topics, such as how to continue essential winery operations, how to set up remote working systems for organizations that never had to do this before, how to dramatically increase virtual sales, how to improve social media presence, and how to care for employees and their families. And more recently, we helped establish and educate everyone on proper health and safety protocols as we begin to reopen and welcome back customers. We’ve reached thousands of winery principals, employees and their families.

The second area within this crisis that we’ve been working is developing completely new ways of marketing and promotions. We’ve created 20 new programs to completely change the way that we are marketing and selling wine and we’ve had an 800% increase in engagement, which shows this is something that we probably all should have been doing better before the crisis. We have had wineries reporting record direct sales without visitation. We’ve helped our wineries, they are stronger now, and I know that they are going to be able to use all those skills: virtual engagement, different ways for operating their businesses, promoting their brands, and increasing sales. Meanwhile, we are sharing all of this with our counterparts in other regions. We have a weekly Zoom session in which are participating with all of my counterparts around California -- I am sharing everything that we are doing, and they are sharing back. I have also participated in and helped to organize similar sessions for international colleagues in organizations that we’re linked with. I have really enjoyed listening and learning from them, and I have been able to incorporate their ideas, and I know that they have done the same.

3/ Race relations

We need to bring understanding, inclusivity and diversity in our wine industry and wine communities. What has happened in the United States has brought our full attention to this topic – and I don’t believe this is just an issue for the United States -- so I want to share with you what we’ve been doing in the past few weeks. We hosted a listen and learning session with black leaders in our community and in the wine industry. With feedback from them, we put together a resource guide to help our members continue to read, watch, listen, learn, think and act. We put in place a diversity task force and we are now pursuing new mentorship, internship and scholarship programs. Meanwhile, we are also evolving a number of our marketing and promotions endeavors, and again, I am happy to share what we are doing, and I would love learning from others what they are doing. We had another Zoom learning session with 12 of my counterparts from around the state on this topic, and I know that we are going to be better for this, not just as human beings but as companies, organizations and regions and the global wine industry. I think that we are going to build our workforce, our communities and our consumer base, so I would like to challenge everyone to think of this as an opportunity to connect and make significant and positive change.

In conclusion, I just want to say that challenges bring opportunities. Wine connects us, and we are so lucky to work in this business and be connected as vineyards, wineries, regions, organizations, government entities and universities. We’ve got a great opportunity to create something more, and to be inspired and help one another. Let’s continue to connect, share, collaborate, evolve and thrive, which will help us in all of the times ahead, both good and bad.

“One Wine Planet” (Pau Roca, Director General of the OIV)

Pau Roca, Director General of the OIV

Climate Change will undoubtedly change the economy. If only a virus has had the impact we have seen recently, imagine a change in climate.

Every crisis is part of an evolution, and we have to look at how systems evolve. The economy will also need to evolve, and we had better look at some patterns of evolution that can be compatible with what climate change will provoke, and its cycles. I strongly recommend looking at ecosystems and how they evolve. Mature ecosystems are complex, diverse and energy efficient.

Now let’s think about which elements will be a sign of performance. Everybody agrees that conservation of the planet is one of the most important elements. The biosphere is in danger, so the absolute value is maintaining this planet’s life. Human activity has put it in danger, the only species among 8 million animal species has risked destroying its own environment. At the same time, only humans can agree to revert this tendency, so the performance of human activity must be measured in terms of preserving this single capital, which is the planet, Earth. I have no doubt that the next economy will not measure human performance in terms of growth, but in terms of the conservation of nature. To find an equivalent parameter, we are talking these days about “sustainability” as a concept, even though we have not yet agreed to measure sustainability.

For many reasons, the wine sector, its value chain, has many of the attributes required to be a successful economic cluster. First, wine has never been in denial, since climate change is a contrasting truth, in terms of crop and the historical register that many wineries maintain, since they are permanent units of production, in some cases for more than 150-200 years, so they have been witnessing the Industrial Revolution all along.

The second characteristic is that the value chain (or the many value chains) is a myriad of profit units, thousands of actors linked to a territory. The notoriety of the brand system can be found in several thousands of wine cellars, based on origin. Private brand and origin are in symbiosis. This leads to a compromise with land, with the community, and prices are constructed for the empowerment of farmers when governance integrates this reality. This can perfectly contribute to a large segmentation of prices. The unicity of a territory or origin plays a role on scarcity if players know how to manage limitation, terroir-identification, yields and number of bottles in the market.

Third, this atomization of actors, the fragmentation of the sector, is a plus, rather than a handicap in this new global economy, since diversity and complexity are key factors for overall performance and for resilience. Multiple responses and diverse micro-strategies are a guarantee of success by adaptation. We are also confronted here with natural selection, as described by Darwin, applied to the economy.

We could look for other attributes of the viticulture sector that could confirm the capacity for resilience, such as the large number of long-term assets required to operate, and that would remind us of the complexity of structures in climax ecosystems.

So, in my personal opinion, the wine economy can be a paradigm of sustainability if we continue to do things right. The wine economy has many of the elements needed to be successful in a future economy.

In conclusion

Sustainable Development Goals (SDG) are one of the current considerations handled within the OIV Strategic Plan 2020-2024 that integrates 13 of the 17 SDGs into its work.

The strategies developed to adapt to the environmental, economic and social impacts of climate change will dictate the future wellbeing of the sector. Grape producers, luckily, have never been in denial because they have been on the frontline of the consequences of climate change for years.

We are entering a new era, in which a new economic model needs to be deployed, with less emphasis on growth and more on managing the natural equilibrium. And the Covid-19 crisis has strengthened that need. If sustainability were a single measurement or a parameter, we would reach this new economic era where performance is measured based on conservation of a new limited capital and wealth: earth conservation. Sustainability as a new value for growth.

Digital transformation will accelerate all processes. But we have to be careful not to create a revolution of distortion of rights and freedom for small businesses, which are a key factor for sustainability and adaptation.

The translation of this article into English was offered to you by Moët Hennessy.

Authors


Jacques-Olivier Pesme

Affiliation : The University of British Columbia - UBC Wine Research Centre
Country : France

jpesme@mail.ubc.ca

Laura Catena

Affiliation : Bodega Catena Zapata
Country : Argentina


Linda Reiff

Affiliation : Napa Valley Vintners
Country : United States


Pau Roca

Affiliation : Organisation Internationale de la vigne et du vin
Country : Spain

References

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