The frost damage in parts of England, France and notably Bordeaux have made national news headlines never mind send waves around the wine industry. Whilst it’s too early to say for sure how damaging the frosts have been it’s clear the fall out is going to be significant. But how much do buyers, distributors and retailers really care about the plight of wine producers or do they simply switch supply to unaffected areas? Richard Siddle looks at how strong producer relationships really are.
The wine industry might feel sorry for producers hit by damaging frosts and lost production, but what steps are really being taken to help and build relationships with them or are they quickly forgotten as the need to find alternative suppliers takes over?
For those of us in the UK wine industry tasked with importing, distributing, selling, and commentating about wine then the cold snap over the last couple of weeks has meant putting on a jumper or an extra layer of clothing. For many of the growers, winemakers and producers who make that wine, the last couple of weeks have been described as anything from “catastrophic” to “a disaster”.
Particularly for those in the UK, France and northern Italy. The scale and the impact of frost in some parts has not been seen for decades. With the timing being particularly bad as exposed, vulnerable buds have been hit, and in some places wiped out.
For key regions of France it’s been like being stuck in Groundhog Day. Having suffered awful weather in 2016 which saw parts of Burgundy, Chablis the Loire and other key French wine growing regions lose over half their annual crop due to fierce frosts and floods, the very same thing is happening all over again this year.
Only this time more regions in the south are being hit as well with both Bordeaux and areas of the Languedoc, which has not had suffered frost damage since 1988, being particularly badly affected.
Bordeaux has seen its worst frost in years. Gavin Quinney, owner and winemaker at Chateau Bauduc in Créon, summarises the situation across the entire Bordeaux region in this comprehensive blog, and says his own production is likely to be down by half. But in some ways he has been fortunate as many producers in Bordeaux may not have a harvest at all in 2017.
Closer to home English vineyards are also facing up to large-scale frost damage with some fearing as much as 80% has been lost. Others have been less affected. Either way the English Wine Producers said the impact has been “significant” just at a time when English wine is enjoying such demand from key markets around the world.
Then there is Italy which has also seen violent hail storms and frost taking its toll. Again precise figures are hard to come by but estimates put damage at between 20% to 40% to 80% depending on different regions.
It won’t probably be until later in June that the real impact of all this frost damage is known for sure, but it is the scale and the widespread nature of the recent weather burst that makes us all sit up and take notice.
Is climate change to blame?
How much of this is down to bad luck and how much is due to long term climate change is clearly open to debate, but what is clear vines are changing the world over how they behave. Buds are breaking earlier, grapes are ripening quicker and the impact of sunlight on unprotected grapes is arguably having a bigger effect than ever before.
For some parts of the world climate change seems very real. Take the Loire and appellations like Montlouis. It is facing up to another bad year on the back of up to 70% losses in 2016. The region has now had three of its last five crops badly hit by frosts.
Producers are now being forced to take more steps than normal to protect their crops. Some at great cost. It is thought, for example, that it costs around $220 to hire a helicopter to protect just one hectare of vines in France. If you don’t have access to a helicopter then an article in Wine Spectator this week estimates it could cost up to $2,170 per hectare in candles to protect the buds and grapes. Or forking out $32,500 on a wind turbine to blow air offer affected areas.
Precarious wine market
It also serves to remind us just how precarious making wine actually is. For all the homogenised mass of me too wines we can find across all our supermarket shelves and casual dining restaurant wine lists, if you strip back where that wine comes from then there will be a grower, with a vineyard, totally dependent on the weather on how much of it ends up here to sell.
It is a fact often forgotten in the clinical world of international trade shows awash with wines and producers from all over the world. Or on the back of the major wine competitions ploughing through thousands of bottles each vying for our attention.
For all the attempts to get more people to buy wine, or trade up to better quality, higher priced options, the reality is its supply and demand really comes down to the vagaries of the weather.
Those involved in sourcing and buying wine will only be too aware of what impact bad weather had across all the major wine producing countries last year.
2016 really was the world’s annus horriblis when it came to bad weather. Not only were large parts of northern Europe hit badly but vineyards across the world had to face up to their own weather difficulties, some more damaging than others. Be it in Chile to Argentina to South Africa, California, Australia and New Zealand there were combinations of frosts, floods, fires, through to months of drought. All doing their own version of damage to the vines.
The OIV estimates the global harvest in 2016 was down around 3%, and it looks like being down again if the recent troubles in the northern hemisphere are anything to go by. Whilst producers can normally cope with one bad year by dipping in to reserves from bumper years, like the English growers claim they will be able to do, few can take back to back poor harvests without there being some real impact on the bottom line.
All of which puts stresses and strains right throughout the global wine supply chain. It also accentuates and makes it even tougher to find the right wine at the right price, particularly for UK buyers faced with such an uncompetitive sterling and an expensive market for producers to do business in.
On the back foot
It means producers and buyers are already on the back foot when it comes to planning ahead. Taking more confidence out of the market at just the time it needs it.
With less volumes of wine to be bought it means basic grape and bulk prices are going up for certain varieties from some wine producing countries. There are always winners and losers in the annual bun fight for buyers to pin down the right level of supply. But it seems there are going to be more losers than ever before in the coming year.
Just at a time when there is growing demand for wine from the world’s two dormant wine consuming beasts: the US and China. Fortunately for the global wine industry the demand in these two colossal emerging markets is for slightly higher priced wines. But conversely it means there will be less of those aspiring wines to go round for markets such as the UK, which will be encouraged to carry on buying at the lower end of the market.
Need for real partnerships
The big fear for those producers that are continuously being hit by frosts, hail, rain and floods is that whilst there is initial sympathy for their plight – as we have seen over the last week – this is a cut throat business. Buyers will just quietly move on to the next producer, the next country that can provide them with the grapes and volumes they need at the prices they want.
But when it comes to the weather, no-one is immune and it is worth us all reflecting on the damage that has been done over the last couple of weeks in the northern hemisphere and what this means about relationships between producers, buyer, distributors and retailers.
There has been a lot of talk recently across the UK wine industry about the need to tie in longer term partnerships with producers around the world in order to protect price points and allocations of wine in to the UK in the face of such an uncompetitive pound and impending Brexit.
But as we know currency rates are as predictable as the weather and perhaps we all need to think again about how we are working with producers in more vulnerable areas of the world to help them through such periods of bad weather. That is when the talk of “partnerships” and “relationships” will actually mean something.
- This is an extended and adapted version of an article that was first published on www.Vinex.market.