European winegrowing companies come in many shapes and forms. Yet they all face the same operational issues environmental, human and economic challenges and a strong underlying technological dimension. The real challenge for viticulture is to modernize wine estate management now to ensure the industry’s future.
Environmental challenges facing the wine industry
Human resources challenges for winegrowers
Economic challenges facing the wine sector
Environmental challenges facing the wine industry
The environmental challenges are huge. Pressure from consumers and citizens has required winegrowers to radically change the way they produce wine. Conventional viticulture is one of the agricultural activities that consumes the most crop protection products. The French wine industry has committed to reduce its use of such products by 50% by 2025.
The organic sector in Europe
Over the last decade, the organic sector has been growing in Europe. In 2018, over 11% of European vineyards were certified organic. Spain (with 113,420 ha or 32.6%), Italy (with 106,447 ha or 30.6%) and France (with 94,020 ha or 27%) together account for 90% of Europe’s organic vineyards. These three European countries are the top three organic wine-producing countries in the world.
Another interesting indicator is the conversion to organic farming among Grands Crus in Bordeaux and Burgundy.
Alternatives to crop protection products
Crop protection products include weedkillers, such as glyphosate, fungicides and insecticides.
Several alternatives to these products exist :
Biocontrol solutionsprovide an alternative to insecticides and fungicides. According to the French Vine and Wine Institute (IFV), biocontrol includes all preventive crop protection methods based on natural mechanisms for regulating bio-aggressors. Biocontrol is based on concepts of balance between different species. Rather than seeking to eradicate a parasite or a pathogen, it aims to limit their presence to prevent them from becoming harmful for crops. Some biocontrol techniques are already well-known: mating disruption, the use of insecticides containing bacillus thuringiensis or sulphur. These methods are partially effective in combating parasites.
According to IBMA (International Biocontrol Manufacturers Association) France, nearly 57% of French winegrowers use natural substances to protect their vineyards. Biocontrol products now account for over 20% of protection products sold in France according to the UIPP (Union des Industries de la Protection des Plantes), an association of plant protection industries.
Biostimulantsare substances and/or microorganisms used to stimulate natural processes and plant metabolism in order to improve tolerance to abiotic stress and optimize crop yield and quality. They are particularly helpful in fighting the effects of drought.
Tillage has made a big comeback as an alternative to weedkillers. In recent years, many winegrowers have returned to this practice, which offers a more environmentally-friendly way of removing the weeds that compete with grapevines and hinder their growth. When properly implemented, this mechanical weed control method can improve the soil’s aeration, physical structure, and water infiltration. It promotes biological activity and soil life, which improves vine nutrition. Deep ploughing, on the other hand, is not recommended since it is too disruptive for the soil.
Global warming and its impacts on grapevines
Global warming is responsible for many of the problems facing winegrowers around the world:
- Early grape harvests are becoming increasingly common. Grape harvesters have to work in extremely hot weather, resulting in more frequent breaks and production losses.
- It results in higher alcohol levels and changes in the wines’ aromas. Global warming leads to higher sugar content in the grapes.
- Early bud break (as early as March) is weakening the vine stock, exposing it to a greater risk of frost until May.
- Recurring droughts can destroy vine plants.
In some countries, like Argentina, viticulture is entirely dependent on irrigation (this is prohibited in France for appellation wines). Argentinians have therefore begun buying vineyards at higher altitudes or in Patagonia, in the southern part of the country.
Global wine industry trends reveal a clear shift towards the North Pole and South Pole to find more suitable areas for vineyards. In France, wines in the Loire Valley have increased in quality due to a 1°C temperature increase over the past 50 years.
Human resource challenges for winegrowers
- Hiring foreign workers
- Introducing autonomous robots
The use of vineyard robots, which is still uncommon practice around the world, offers several advantages. The robots make tasks less difficult, optimize working time (winegrowers can devote their time to activities with more added value) and increase profitability.
According to a survey conducted in 2019 by PwC (PricewaterCoopers) France of around one hundred entrepreneurs from the wine and spirits sector, 54% believe robotisation will have a major impact on vineyard management. Mechanised forms of harvesting have already become the norm. It is still very difficult to find any mechanised solutions for pruning, however. On the other hand, work requiring the use of a tractor and driver can be robotised.
French companies like Naïo Technologies in Toulouse and VitiBot in Reims are designing electrical agricultural robots that remove weeds automatically, thus reducing the use of weedkillers. These solutions are in keeping with the transition to more sustainable viticulture.
Economic challenges facing the wine sector
Significant investments are required in agricultural equipment and labour. The profitability of wine estates has therefore become an important issue. “The sometimes costly investments in wine estates can only be amortised through controlled profitability,” says Louis-Marie Deschamps, a partner with PwC for entrepreneurs.
A fast-changing global wine industry
In October 2019, the United States imposed additional customs duties of 25% on still (non-sparkling) wines in bottles of 2 litres or less and with an alcohol content of 14% or less. This Trump Tax dealt a hard bow to the wine industry in France, Germany, and Spain, and considerably reduced wine exports to the United States.
The organic wine market continues to grow
European winegrowers need to take account of developments in wine consumption. Wine drinkers are demanding more organic wine. Germany is leading the way in this demand, followed by France, the United Kingdom, and United States. According to the British institute IWSR (International Wines and Spirits Record), organic wine sales in France should double by 2022. Sales volume will soon exceed €1 billion, making it a promising market for the future.
Wine marketing goes digital
The wine sector is modernizing in all areas: from the earliest stages, in winegrowing practices, to the marketing stages. Many new digital wine marketplaces have emerged in recent years:
- Vivino.com, number 1 in Europe
- Wineandco.com
- Lesgrappes.com
- Lepetitballon.com
- Millesima.fr
- Not to mention giants like Cdiscount and Amazon.
The COVID-19 health crisis has sped up digitalisation in all areas, especially that of virtual wine tasting, which proved very successful in the United States during the first lockdown period.
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