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Part II Bordeaux climate change: adaptive viticulture the way forward?

With vineyard temperatures on the rise in Bordeaux, WineCap spoke with leading Bordeaux estates about how they’re fighting back to protect both wine heritage and future generations.

  • Adaptive viticulture is a widespread method of coping with climate change.
  • Traditional and experimental moderating methods are both in use.
  • High temperatures can be beneficial for recent and, potentially, near-term vintage quality.

Vineyard layout, clones, rootstocks, and varietal proportion: Château Beau-Séjour Bécot, Château Margaux, Château La Conseillante, and Château Pavie

To moderate the impact of climate change, Julien Barthe, co-owner of Beau-Séjour Becot has implemented a radical vineyard layout change to prevent berry burn. ‘The vineyard was formerly planted in an east-west direction. From mid-day to 1 pm, the sun arrived on the west side, right on the berries. This is why we changed the orientation from north to south ­— to avoid the same effect.’

Philippe Bascaules, managing director of Château Margaux has taken the same approach. ‘We decided to change the orientation of our rows,’ he told WineCap.

Barthe also explained that the house is using new clonal selections of Cabernet Franc to help retain the freshness in its Merlot-dominant blends.

Cultivating resilient vines was, similarly, the approach of Marielle Cazaux, the general manager of La Conseillante. ‘Climate change is a big question. We are thinking long term about rootstocks and grape variety.’

Referring to early-ripening Merlot’s vulnerability to climate change, Cazaux stressed the importance of preserving its classic wine profile. ‘We are adapting the rootstock to be more resilient against hydraulic stress and thinking about changing the clones a little bit.’

Olivier Gailly from Château Pavie said that his team had already begun experimenting with climate-resistant proportions of grape varietals at the turn of the century. The house replanted its vineyards with an increased quantity of later-ripening Cabernet Sauvignon and similarly-behaving Cabernet Franc to blend with Merlot. This proportion has helped to maintain wine freshness as temperatures rise. 

Adaptive vineyard management: Château Cheval Blanc, Château Angelus, and Château Calon Segur

Traditional vineyard management techniques such as dense canopy cultivation, durable old vine revival, and biodiversity practices that support the mitigation of climate change have been intensified around Bordeaux since at least the millennium. While some methods have a short time frame, Pierre-Oliver Clouet, winemaker and technical manager at Château Cheval Blanc, which famously voluntarily withdrew from the Saint-Émilion classification system in 2021, spoke about the need for a long-term view.

‘We should adapt today to preserve Cheval Blanc in 20 years,’ he told WineCap. ‘Global warming is going to be a problem because, with two or three more degrees, the wine quality is still going to be good enough, but the identity will not be the same.’

Clouet said the château implements cover crop techniques to protect the soil from high temperatures, enhance soil nutrients and resilience, and to conserve rainwater more efficiently. He has also planted trees to expand cooling shade for vines and is training plants that are heat- and disease-resistant.

Saint-Émilion peer Château Angelus, which also opted out of the appellation’s classification system in 2022, uses a device that assists with hydrating and cooling vines in a region with stringent irrigation rules. President and CEO Stéphanie de Boüard-Rivoal explained: For hail, we have a device that is a balloon that auto launches. It’s blown with helium and contains salt crystals so when it’s swollen by a cloud, it spreads out the salt and allows the ice to melt. Instead of having hail, we have rain,’ she told WineCap.

Cooling heat-stressed plants was also a priority for Vincent Millet, general manager of Château Calon Ségur. He told WineCap how he and his team are refining a mechanism to conserve cooling dampness in vineyard plots: ‘We are setting up specific enclosure systems which can trap and return humidity to the plant.’

Research and experimentation: Château La Dominique

While age-old vineyard methods are adapted to counter the perils of global warming, innovation is a key part of Château La Dominique’s philosophy.

General manager, Gwendoline Lucas, detailed the producer’s efforts in this area. ‘We are very concerned about climate change, so we started working with Bordeaux Sciences Agro years ago to do some research about how we can better manage our vineyard,’ she told WineCap. ‘We are also part of VitiREV, which is the first European fund specialising in viticultural ecological transition. We are like a laboratory testing new solutions from startups. We see a lot of proposals and when we think that something is quite interesting, we try it in our vineyard.’

Beneficial natural environment: Château Pavie, Château Canon, Cos d’Estournel, and Château Margaux

While acknowledging the potential hazards of climate change, several producers told WineCap that they had, to date, avoided any serious consequences of rising temperatures across Bordeaux by dint of resilient terroir. Whether location or soil composition, nature provides a mitigating influence to the heat, ensuring balance and traditional character in yield and wines.

‘We are fortunate to have this exceptional limestone terroir which really keeps a lot of freshness in the wine,’ said Olivier Gailly, commercial director of Saint-Émilion house Château Pavie. ‘Then we have the forests around the château which are very important to keep a bit cooler.’

Soil make-up was also cited by Nicolas Audebert, winemaker and general manager at fellow Saint-Émilion house, Château Canon. Referring to climate change, he said: ‘We see it in berry ripeness every day, but we still have a long way to go before we get into trouble because we are on a fantastic, limestone terroir.’

The water-retaining freshness of limestone guarantees that vines do not suffer severe heat stress, Audebert added, also noting the benefits of micro-practices.

‘There are a lot of fantastic wine producing regions in the world where the climate is warmer than here and they manage,’ he said. ‘I spent ten years in Argentina making wine so I have some experience of how we can evolve our viticulture to protect it. There are thousands of small things we can adapt to keep that elegant, vibrant, precise, style we like.’

Vineyard coolness was also cited by Charles Thomas, commercial director at Cos d’Estournel. ‘We are lucky enough to be in the north part of the Médoc where we have the Gironde River providing freshness to the vineyard.’

Not all Bordeaux producers regard climate change unfavourably and are optimistic that, with a responsive approach, the trials of the decades ahead will be overcome.

‘I think we are just at the beginning,’ Philippe Bascaules of Château Margaux told WineCap. ‘For the last ten years, summer drought and heat have helped us to make even better wine. But, of course, we know that if the temperatures continue to increase, we will be in big trouble because it will not only change the quantity of wine but also the style of the wine we want to produce.’

To this end, the chateau continues to be attentive and flexible in the face of global warming. ‘At least for the next 50 years, I’m quite optimistic that we will find the parameters and the techniques to continue to produce the wine of Château Margaux as it exists today,’ he said. ‘I don’t know about after that because who knows what the temperature will be in Bordeaux in 50 years?’

See also our Bordeaux I Regional Report

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Climate change in Bordeaux: are new varieties the answer?

WineCap spoke with leading Bordeaux estates on the much-discussed possibility of introducing new, heat-resistant grape varietals to this leading wine region to mitigate the impact of global warming.

    • Adaptive viticulture and winemaking were the prevalent answers to coping with climate change.
    • The minority considered old resilient Bordeaux varietals and new grapes.
    • Heritage and current appellation laws are significant.

 Adaptive winemaking: Château Pichon-Baron

Christian Seely, managing director of AXA Millésimes, owner of Château Pichon-Baron was firm that the response to climate change was not the introduction of new cultivars but rather adaptive winemaking.

‘Here at Pichon, 25 years ago, the blend tended to be around 65% Cabernet Sauvignon, 35% Merlot. These days, it’s 80% or more Cabernet Sauvignon and 20% Merlot,’ he told WineCap. ‘It’s not an answer to climate change, but it’s how we’re adapting because we are having more hot, sunny years which enable us to get the Cabernets magnificently ripe. In the old days, when we hadn’t got the Cabernets perfectly ripe, a nice bit of ripe Merlot was a useful element in the blend. It’s still a useful element, but we need less of it.’

This approach also softens the grape alcohol content that has steadily risen along with warmer growing seasons. ‘Merlot grapes here will probably have one degree more of alcohol than Cabernet. If you want to keep your wines under 14% abv, which we do at Pichon, one way of doing that is to increase the proportion of Cabernet Sauvignon.’

Traditional vineyard management and quality over trend: Château Canon-la-Gaffelière and Château Calon Segur

Stéphane von Neipperg, proprietor of Château Canon-la-Gaffelière, was uncompromising on his views about new varieties, preferring skilled, traditional viticulture instead.

‘Increasingly, some technical people are speaking about new varieties for wines. I’m just against it,’ he told WineCap. ‘They’re not proving that the quality is outstanding. They only prove that they don’t need to spray against mildew.’

Von Neipperg stressed the château’s effective practice of copper spraying which complements the composition of its vineyard soils and its cultivation of old vines that display hardiness to warmer summers.

‘We are well known for old vines. We have our own genetics and I think this is much more important than these new varieties.’

Vincent Millet, general manager of Château Calon Ségur has a similar approach to dealing with rising temperatures: massal selection and a decades-long vineyard restructuring plan to be completed in 2035.

‘We recovered old Merlot vines from 1940, Petit Verdot from the 1930s, and Cabernet Franc from the 1970s. We have created our own collection,’ he told WineCap. ‘This collection allows us to preserve a genetic heritage…which allows us to try to resist the increases in temperature.’

Under this climate change-defying scheme, rather than planting new cultivars, the château plans to plant more Cabernet Sauvignon and adjust the quantities of the other traditional Bordeaux varietals.

Potential of resilient Bordeaux varieties: Château Saint Pierre and Château Beychevelle

For co-owner of Château Saint Pierre, Jean Triaud, there is the possibility of regional heat-tolerant grape varieties thriving in warmer climates, making a comeback. He cited Malbec, a varietal that originated and still grows in southwest France and now flourishes in Argentina and Carménère, formerly planted widely in the Médoc and now the flagship black grape of Chile.

‘Those great varieties come from Bordeaux, but finally work much better in other places thanks to the weather. Why not come back?’

However, referring to appellation laws, he acknowledged that the situation was complex. ‘But it’s not so easy because here we don’t decide all the rules,’ he added.

While acknowledging the strict limitations of the appellation system, Philippe Blanc of Château Beychevelle had a similar perspective.

‘The most sensible thing would be to take varieties coming from the south, mainly Spain and Portugal, and see how they adapt here,’ he told WineCap. ‘It’s always this way. You go north and plant Pinot Noir in Sweden or Brittany or Chardonnay in Kent. Maybe it’s good to invest in Brittany or Normandy to make new vineyards in the future.’

Restrictive appellation laws: Château Beychevelle

General manager of Château Beychevelle, Philippe Blanc, is open to the possibility of introducing new heat-resistant grape varieties but recognises that the French appellation system is slow to react and evolve.

‘It takes a lot of time to reach an agreement. If I decide to plant Shiraz, I can make Vin de France, but I can’t make Saint-Julien. So, in terms of value, it’s difficult to do,’ he said. ‘I’ve got no new varieties but, we’ll keep an eye on this and as soon as we’re allowed to plant new grapes, even 2% or 3%, we’ll do it.’

Value of regional heritage and legacy: Château Margaux and Château Troplong Montot

Philippe Bascaules, managing director of Château Margaux said that the estate has the possibility of cultivar changes in mind and a designated block of vineyard for experimentation with new varietals. However, he told WineCap, ‘it’s not decided’.

‘Cabernet Sauvignon is the core of the blend of Château Margaux. The decision to change that is a big one. I’m not considering doing it in the next 50 years.’

Commercial director of Château Troplong Montot, Ferréol du Fou, was more direct about the option to use heat-resistant grapes as a buffer against climate change.

‘Burgundy has Pinot Noir. Bordeaux has Merlot, Cabernet Franc, Cabernet Sauvignon, and Petit Verdot. The solution is to work more in the vineyard, it’s not planting Tempranillo. It’s a plaster, it’s a bandage. We have to think about the next generation,’ he told WineCap. ‘Making Tempranillo in Bordeaux is stupid. I’m a bit harsh, but this is the truth for me.’

See also our Bordeaux I Regional Report

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

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The impact of climate change on wine investment

  • Environmental considerations are the number one reason why UK investors choose to invest in fine wine.
  • Fine wine itself is facing the effects of climate change such as reduction in yields.
  • Scarcity can drive demand and prices higher, but also lead to the broadening of the fine wine market.

Climate change and environmental considerations are the number one reason why UK investors choose to invest in fine wine, according to the results of our Global Wealth Manager Survey 2023. Over half (54%) of our respondents cited fine wine’s low carbon footprint as a key reason for adding it to their portfolio.

While there is a strong case why fine wine can be considered an ESG investment that is a good for the environment, fine wine itself is facing the impact of climate change. Like all agriculture, viticulture is at the mercy of the environment, making climate change a pressing issue for wine investors.

Changing weather patterns affect wine quality and quantity – two of the main factors that can make an investment profitable.

How changing weather patterns affect wine quality and quantity

In general, climate change can lead to alterations in grape ripening cycles, water stress, diseases and pests, and can affect berry size and composition.

Rising temperatures can cause early ripening, potentially disrupting the balance of sugars, acids and tannins – factors crucial for the quality of the wine and its ageing potential. Meanwhile, drought and irregular rainfall can lead to excessive water stress in the vines, affecting fruit development. Warmer temperatures can also bring new pests and diseases to regions previously unaffected, while heatwaves can cause grapes to sunburn, reducing yield and quality.

For instance, in 2023, two of the main fine wine producing countries, France and Italy, faced diverse weather patterns. France’s 2023 wine harvest projects between 44-47 million hectolitres, benefiting from potentially strong yields in Champagne and Burgundy. Italy, however, might see up to 14% reduction in yields due to extreme weather, marking it among its smallest harvests.

What does this mean for fine wine investment

Smaller harvests lead to reduced supply, and assuming that demand remains constant or increases, prices tend to rise. When news of a small harvest breaks, especially from a reputable wine-producing region, it can create a buzz in the trade. Buyers and collectors might perceive wines from that harvest as more valuable or unique, driving up demand and, subsequently, prices.

Moreover, a smaller harvest doesn’t necessarily mean reduced costs. Wineries still have to maintain vineyards, pay labour, and cover all production expenses. With fewer bottles to sell, the cost per bottle increases, which can result in higher prices for the consumer.

Supply and demand

This is a particularly pertinent question for regions, where scarcity is the main driver behind their investment appeal such as Burgundy. A recent example was the 2021 Burgundy En Primeur campaign, which saw drastically low volumes. The Bourgogne Wine Board (BIVB) pointed to a crop of 900 to 950,000 hectolitres, representing about 50% of a normal year and 2/3 of the average in recent years.

As a result, allocations were low and release prices were up 25% on average. This stimulated demand for older vintages at comparatively low prices, such as 2012, 2014 and 2017, as examined in our Q1 2023 report.

Overall, climate change can create scarcity in the market, pushing the entry point into some fine wine regions higher.

The broadening fine wine market

The rarity of some wines is leading buyers to also consider alternatives from other regions, impacting the size of the market. Today there are more fine wine investment opportunities than in any other point in history.

Changing weather patterns have also led to the emergence of new wine producing regions. For instance, England is now producing award-winning sparkling wines, due to warming temperatures. The country is still a niche player in the investment market, but some brands such as Nyetimber and Gusbourne Estate are making waves.

Climate change is reshaping the fine wine market, with some of the traditional regions forced to adapt their strategies. It is more than an abstract global concern; its palpable effects are shaping the fine wine industry, from agriculture to investment.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

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How Climate Change Affects the Value of Fine Wine

The greatest risk for many investors today is – undoubtedly – the climate crisis. Each year the planet warms by 0.018 degrees Celsius[1]. And the past six have been among the hottest since records began. The resulting floods, fires and changing biodiversity are impacting nearly all asset classes and investment types. By 2050, climate change is anticipated to restrict global GDP by 14%[2].

For investors in fine wine, the rising heat could signify the end of an era for some of the greatest flavours, adding further scarcity to valuable bottles. On the other hand, the changing temperatures could offer interesting opportunities elsewhere.

In this article, we’ll uncover the major threats and opportunities for fine wine investors.

Scarcity will make much-loved bottles more valuable

Vineyards across Southern Europe and wine regions of North America are facing an uphill battle trying to mitigate the effects of climate change. In August 2022, an unprecedented hailstorm tore through Châteauneuf-du-Pape vineyards in France. The 120 mile-per-hour wind destroyed up to 90% of the vines in some of the most celebrated plots. So extreme was the storm that one vineyard owner described the scene as ‘completely shredded’ and ‘not a leaf is left'[3].

On the other end of the spectrum, extreme heat waves combined with drought in the summer provoke catastrophic forest fires. While only a small number of vineyards are caught up in the blaze, the resulting smoke can disrupt the delicate flavours and quality of the wine. Smoke taint – the ashy taste that lingers – can render entire harvests useless, leaving assets stranded. Even prized and world-famous regions like Bordeaux are feeling the painful financial impact.

It seems inevitable that many of the most-loved wines will become less and less available in the future. What this means for investors is that already-rare bottles are likely to become even more scarce and sought-after. Fine wine is already a limited and depleting asset, which climate change exacerbates. What’s more, as hungry new collectors enter the market, demand could even further outstrip supply, further raising the value of fine wine.

What’s more, according to 2021 data from Knight Frank, the average fine wine investment has returned a staggering 127% over ten years. Sticking to the strategy almost always pays off.

New flavours may be hard for investors to stomach

Even for regions without droughts or forest fires, climate change can seriously impact the flavour of wine. This is because the lack of water irrigation, combined with heat waves creates more sweetness and less acidity in the grapes. To avoid the wine becoming too sweet, producers may need to harvest early, which risks missing out on characteristic and valuable secondary flavours.

Not only could iconic wines now start to lack their defining volume, but the added sweetness could mean different varieties taste more alike. For wine lovers, who may enjoy certain brands or pride themselves on detecting notes, this development could be hard to stomach. There is a serious investment risk that future bottles could lose value, compared to their ancestors.

To avoid this cultural and financial damage, some regions are now lifting regulations to allow irrigation. In August 2022, for example, the Institut National de l’Origine et de la Qualité gave special dispensation for three sites in Bordeaux to water their vines. What this means for investors is still unclear. Depending on the success of regulations and irrigation systems, future harvests may yet retain their distinctive taste and value.

Another intriguing development triggered by climate change is the renewed focus on hybrid grapes. As famed vineyards look to adapt and mitigate against extreme weather, producers are working side-by-side with scientists to create more resilient grapes. While many critics remain sceptical, hybrid grapes could help vineyards restore some of their former glory..

Exciting investment opportunities are entering the scene

There are not many silver linings to the catastrophic climate situation. However, for investors in fine wine, there is a unique and exciting opportunity to buy new varieties early. As the planet warms, new terrains are opening, in previously unthinkable places.

Incredibly, vineyards are popping up in the UK, Belgium, Norway, and Sweden. In the UK, the wine real estate market is enjoying unprecedented growth, with land selling for £25,000 per acre[4]. English land dedicated to winemaking has more than doubled in the past eight years and looks set to continue[5]. As increasing numbers of producers and investors snatch up these pockets of land, it seems likely that the British wine scene is about to mature. Sparkling wines in particular, such as those produced in Sussex are exploding in popularity, with some critics describing the taste as comparable to Champagne. As of July 2022, sales of English and Welsh wine have surged by 69% from 2019[6]. Whether this boost will translate over to the fine wine market has yet to be seen, but with the warmer climate, British bottles could prove to be an interesting investment opportunity.

Vineyards with a sustainable focus look promising

Of course, the impacts of the climate crisis go far beyond the physical weather changes. Consumers are increasingly looking at the sustainability of their products too and thinking about how their money affects the planet. According to 2022 research, 48% of US alcohol drinkers say that they’re more likely to buy bottles if they see the company has sustainable or environmental initiatives[7].

In many ways, fine wine investments are already good for the environment, which is good news for the market. And it seems that those vineyards with extra sustainable initiatives in place could be even better positioned to capitalise on this trend.

 

[1] Source: Visual Capitalist

[2] Source: SwissRe

[3] Source: Wine Spectator

[4] Source: Spears Wealth Management

[5] Source: Wine GB

[6] Source: Wine GB

[7] Source: IWSR