Wineries in Italy, Greece, Spain battle extreme heat, lower production

This yr’s wine harvest is in full swing on the perennially common Greek island of Santorini, however for native winemaker Yiannis Paraskevopoulos, the prospects don’t look good.

Extreme temperatures are threatening production of the indigenous Assyrtiko grape, important to the island’s internationally acknowledged superb white wines. Final yr’s output at Paraskevopoulos’s Gaia Wines was round one-third of 2022 production. This yr’s harvest is estimated to fall to one-sixth of 2022 ranges.

“We thought we had seen the worst. But no, we hadn’t: 2024 has gone beyond all expectations,” Paraskevopoulos advised CNBC over the telephone.

Based on Gaia Wine’s 2023 estimates, Assyrtiko might face extinction by 2040. Now, that timeline seems optimistic.

“It brings the trend line even closer to the present,” Paraskevopoulos stated.

Falling wine production

The Assyrtiko grape isn’t alone. World wine production fell 10% in 2023 to 237.3 million hectolitres, the bottom degree in over 60 years, as “extreme climactic conditions” weighed on harvests, according to the Worldwide Organisation of Vine and Wine (OIV).

The problems going through wineries prompted the European Union to last month launch a excessive degree group on wine coverage to debate the “challenges and opportunities for the sector.”

Production in Greece plunged greater than one-third in 2023, whereas output from Italy and Spain dropped by greater than one-fifth, based on OIV, as wineries in southern Europe more and more skilled antagonistic climate results together with heavy rainfall, drought and early frost.

Such climate occasions can influence not solely a given yr’s harvest but additionally production in following years.

“We are absolutely affected by climate change,” a information at Castello di Volpaia advised CNBC throughout a current tour of the twelfth century vineyard in Tuscany, Italy.

Giant barrels retailer Chianti Classico wine at Castello di Volpaia in Tuscany, Italy.

CNBC

“Climate change is significantly influencing wine production and its quality,” Marco Fizialetti, business director at close by Castello di Querceto, stated by way of e-mail. “This situation has created difficulties for all producers who already had to manage high temperatures in the past.”

Weaker output and tougher production circumstances are pushing up prices in an already largely value delicate client market. Wine consumption was down 2.6% yearly in 2023, hitting its lowest degree since 1996, attributable to greater production and distribution prices which led to greater costs for customers, OIV estimates confirmed.

That is champagne costs. When a bottle is dearer than a Burgundy, what’s going to a purchaser do?

Yiannis Paraskevopoulos

co-founder of Gaia Wines

As of August 2024, one kilogram of Assyrtiko grapes value eight ($8.9) to 10 euros, round double 2022 costs.

“That’s champagne prices,” Paraskevopoulos stated, noting that Gaia Wines has not but mirrored the heightened prices in its closing bottle value. Nevertheless, he stated it can have to take action finally, and that may harm enterprise.

“When a bottle is more expensive than a Burgundy, what will a buyer do? We will lose market that we have struggled to be in,” he stated.

Altering production strategies

Some winemakers at the moment are altering their production strategies to adapt to the shifting environmental panorama.

At Antinori nel Chianti Classico, the latest in a set of estates belonging to Marchesi Antinori, considered one of Italy’s oldest and largest winemakers, vines at the moment are being planted in new instructions to reap the benefits of the elevated solar publicity.

“Until a few years ago, you would plant the vineyards southwest facing. Now you can plant them northeast facing because of the extreme heat you get exposure” from each instructions, President Albiera Antinori advised CNBC over the telephone.

Shut up of kouloura model vines in Santorini, Greece.

Erica Ruth Neubauer | Istock | Getty Photos

Different strategies the property is using embody elevating trellises to extend air circulation and planting grass in between vines. Antinori stated that has helped the property enhance production high quality over current years at the same time as amount has fallen.

Nevertheless, she described the enhance as “la vittoria di pirro,” or Pyrrhic victory, a feat which incurs such a price it’s barely value profitable.

Sergio Fuster, CEO of Spanish wine group Raventós Codorniu, famous that most of the areas in which it owns vineyards are in a state of emergency and, as such, they’ve wanted to develop into “increasingly efficient” with water utilization, as an example through the use of buried irrigation methods.

Different winemakers are working the fields in the peak of summer season to reply to earlier harvests. At Domaine Skouras in Greece’s Nemea, this yr’s harvest began a report 20 days early. Winemaker Dimitris Skouras stated a discount in fungal illness had improved grape high quality, nonetheless he nonetheless expects lower yields total.

We can’t predict the modifications to come back or the extreme climate we would face.

Dimitris Skouras

winemaker at Domaine Skouras

“This year has been exceptionally hot. The winter was unusually short, and temperatures rose rapidly afterward, with July being the hottest on record. In our vineyards, we’re seeing lower production levels than last year, which was already quite low, especially for Agiorgitiko,” he advised CNBC by way of e-mail, referring to the grape selection used in the area’s pink wines.

Skouras is now planting vineyards at greater altitudes, the place temperatures are typically lower, and he’s figuring out areas with higher water provide to assist the vines stand up to the warmth.

“There are no definitive solutions yet, as we cannot predict the changes to come or the extreme weather we might face. Our strategy is to adapt to this new reality in viticulture as best we can,” Skouras stated, referring to the research of cultivating grapes.

Elsewhere, nonetheless, the hopes of adaptation are much less clear. On Santorini, the place grapes are grown in conventional “koulouras,” or baskets, to guard them from the island’s robust winds and intense daylight, the vines threat turning into much more uncovered to harsh climate circumstances.

“These vines have root systems that go back three, four, five centuries, and they’re dying,” Gaia Wine’s Paraskevopoulos stated.

Tourism in charge?

Extreme climate isn’t the one difficulty afflicting Europe’s vineyards. Elevated tourism has additionally seen funding and manpower shift conventional agricultural work to the hospitality sector.

For therefore-called agritourism locations, akin to Tuscany’s Castello di Volpaia, which homes a small lodging complicated on the property, visitor stays can offset the prices related to weaker production output. At Marchesi Antinori, cellar excursions and cookery lessons are all a part of the providing.

“We are fortunate to be in a region and a country where we don’t see a reduction in tourism – quite the opposite,” Antinori stated.

A vineyard in Tuscany, Italy.

CNBC

However Paraskevopoulos stated he fears that locations like Santorini, which have ridden the wave of rising tourism, might in the end develop into victims of their very own success.

“Climatic change is surely very alarming, but tourism is also to blame,” he stated. “Young Santorinians don’t invest in wineries anymore because they have other ways of making money.”

The shifting panorama will now see EU representatives and business stakeholders collect for wine coverage discussions, with their first assembly due subsequent month. The group is because of meet at the very least 3 times this yr, earlier than presenting their suggestions at the beginning of 2025.

It’s hoped that such measures might scale back among the greatest dangers going through the business, which throughout the bloc alone employs round 3 million individuals and contributes an estimated 130 billion euros to EU gross home product.

“That’s the trend line if you do not intervene,” Paraskevopoulos stated of the Assyrtiko extinction forecast. “And this is the question: will we intervene in time and will we be successful?”