Is it just trendy to talk about sustainability in the wine sector or is it time that European wine producers and industry-related stakeholders fully embrace it? The business case is becoming very clear as the wine market becomes increasingly competitive.
Consumers are becoming more interested in not just the cost and the taste of the wine: they want to know about how it was produced, the wine producer’s heritage and if sustainable practices are used to produce the wine. It is against this consumer trend that European wine producers are now engaging in an ever increasing global competitive market place.
The Global Market for Wine
TechNavio’s report on the Global Wine Market for 2015 to 2019 highlights some alarming global trends from the perspective of European wine producers. In 2014, France was the foremost wine producing country in the world with a yield of 46.7 mhl. Italy was second place with a total volume of 44.7 mhl. This is perhaps not a surprise given that together with Spain, these European wine giants account for up to 47 per cent of worldwide annual wine production. Whilst it is clear that France, Italy and Spain remain the global leaders of the international wine trade, the industry is seeing a subtle, but constant shift of power from these ‘traditional’ wine countries to ‘newer’ wine producing nations.
At the turn of the century, Europe supplied 73 per cent of the wine in the international market. Today, it accounts for approximately 60 per cent of the annual yield of wine. If this this trend continues, European wine producers will cease to be the world’s largest wine producer by 2030. Whilst European countries are producing less and less wine, the so-called new wine producing countries such as Australia, New Zealand, Chile and South Africa are experiencing massive growth.
Is Sustainability the Answer?
The need to develop a sustainable European wine sector has been recognised for many years. Indeed the Comité Européen des Entreprises Vins (CEEV), the representative professional body of the EU wine industry representing 23 national associations has as one of its objectives:
“To promote the improvement of the energy and environmental performance of wine production and trade, identifying opportunities for innovation and cost-savings, and coordinating the EU wine sector efforts towards a more environmentally sustainable viti-viniculture as a valuable wine industry’s contribution to the Europe 2020 strategy for sustainable growth”
Europe’s commitment to sustainable wine production has to be considered in the context of the new wine producing nations and their strategies for sustainable wine production. For example, New Zealand has its New Zealand Winegrowers’ Sustainability Policy; Australia has its Australia’s “Sustaining Success” Strategy. In California, sustainability is being led by the California Sustainable Winegrowing Alliance (CSWA) with similar initiatives being implemented in South Africa (e.g. Sustainable Wine South Africa). In Chile, the wine sector has the objective of becoming the number one New World exporter of sustainable wine by 2020 and has developed a Sustainability Program and Sustainability Code to promote this development in the industry.
Obviously, the global wine market and economy is complex. One recurring theme or question that is being asked within the industry is:
“Is there a relationship between the new world wine’s commitment to sustainability and the popularity and growth of their wines?”
Clearly, it is not possible to attribute the success to sustainability alone, it is possible that it is one factor. In these countries, there is considerable government and regional/local financial and other support for wine producers. Of course, the same is true in Europe, but maybe it is time to place a renewed emphasis upon sustainability and to re-think how sustainability can be used as a business development tool rather than just as an environmental consideration.
Research from the UseWine benchmarking study shows there is a high level of interest in sustainability by wine producers. However, for many wine producers survival and a lack of capital available for investment in new technology, plant and sustainable schemes is very challenging. Whilst it is the case that many small, rural wine producers need to be convinced of the strong business case many are making tremendous progress.
For many wine producers, especially the smaller, more rural producers, there can be an uneasy tension between the aspiration of adopting sustainable policies and practices and the need to survive and to generate cash flow and profit. The UseWine project aims to provide a business model capable of addressing both of these needs. However, wine producers do not exist in isolation and often their needs are overlooked.
The understanding and awareness by local and regional stakeholders (e.g. local authorities, government agencies and business support agencies) of the challenges faced by small, rural wine producers is weak. Without access to practical business support, and vocational education and training and the availability of financial assistance, the situation is unlikely to improve anytime soon.
Given the contribution to the many local and regional economies in terms of providing jobs and contributing to GDP, the wine sector perhaps merits more attention and support. If small, rural wine producers are to survive and thrive, more needs to be done to support them. The case is not purely an environmental one, but economic and social one.
The UseWine Project
Working across eight different European countries, UseWine has benchmarked the status and understanding of sustainability as a business tool. This has resulted in the development of the UseWine Benchmarking Tool. The tool provides a simple diagnostic report enabling wine producers to identify key aspects of their business ripe for development. The UseWine project is committed to training a network of Facilitators to use and implement the tool with small rural wine producers. In addition to diagnosing areas for development, the Facilitators will help the owners to identify a set of practical actions and strategies that will improve the business’s performance at the same time as addressing sustainability challenges.
UseWine Facilitators will subsequently work with wine producers to support them with the development and implementation of sustainable plans using the UseWine Triple Bottom-line Model.
The project is about to move from its research and development phase into the piloting and implementation stage. To learn more about the UseWine project contact your National Partner – details available from http://www.usewine-project.com