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Climate Change Threatens the Wine Sector and Wineries Prepare for a Reform Costing Millions

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Droughts, hailstorms, damages... Vineyards are seeking ways to adapt to increasingly adverse weather conditions within strict regulations

The Marquis of Grinon, Carlos Falco, walks between his vines at his 700-hectare (1,700-acre) estate in Malpica del Tajo, in the heart of Spain's central La Mancha region
The Marquis of Grinon, Carlos Falco, walks between his vines at his 700-hectare (1,700-acre) estate in Malpica del Tajo, in the heart of Spain's central La Mancha regionAP

The years 2022 and 2023 dealt a severe blow to Spanish wine. Neither the war in Europe nor the inflation crisis: drought was (and continues to be, despite Donald Trump's tariff threat) the sector's nightmare, and the aftermath still lingers. Regardless of whether it is a cyclical climatological phenomenon (different experts note that drought periods are cyclical), its consequences are beginning to become chronic in the Mediterranean arc area. Added to this are other climate upheavals, such as damages or strong hailstorms, which also damage crops. The latest studies on the subject indicate that these extreme weather events will become common in the coming years. Higher temperatures, more extreme precipitation, and more intense droughts form the trident that keeps the wine industry awake at night.

This is reflected in the latest report from the World Meteorological Organization (WMO), which estimates that 2024, despite being the warmest year in history, is likely to be surpassed (with an 80% probability) between the years 2025 and 2029. Faced with an increasingly changing and extreme climate, the wine sector is preparing for a significant impact. According to the International Vine and Wine Observatory (OIV), the year 2024 saw a production of 226 million hectoliters, "the lowest in over 60 years, with a 5% decrease compared to 2023. This is largely due to extreme and unpredictable meteorological phenomena in both hemispheres, caused by climate change."

Climate change has a direct effect on the vine, the origin of the beverage. For about a decade, the National Wine Federation (FEV) has noticed its effect on harvests, with uneven grape ripening due to lack of water, high temperatures, and irregular rainfall. This alters the evolution of sugars that later transform into alcohol, and in parallel, form other compounds (which affect aroma or color).

"We have grapes with lower quality for the wine we expect. And also, an increasing alcohol content, precisely against what the market and consumers demand, which are wines with lower alcohol content and more freshness," explains Trinidad Márquez, technical director of the FEV. Failing to meet consumer expectations is another way to see the profitability of wineries decline, which with a raw material (grapes) increasingly delicate and scarce, see production costs rise. All this results in the increase in the price of bottles.

This situation is familiar to one of the most representative Spanish cava firms: in recent years, Freixenet has resorted to a restructuring of the company's model (and its staff) due to the drop in productivity, which they directly attribute to climate change. After months of silence, the Catalan firm explains that climate change, for an industry like cava with long production cycles, is no longer a specific problem but a "profound structural change that affects the entire value chain." The company refrains from delving into details of its protocol, although in 2024, it had to adapt its product catalog due to the lack of grapes in the DO Cava. "Since 2022, cava grape harvests have decreased by 45% in the Penedès area," they claim. In their case, they regret that the regulatory framework to which they belong limits their actions.

Data from the aforementioned DO for the year 2024 reflects a 13.39% decrease in sales (totaling 218 million cava bottles) compared to the previous year. From Cava, this loss of sales is attributed to a lower "productive capacity and supply" resulting from recent droughts.

Márquez adds, to the loss of productivity, the proliferation of plant diseases. Climate change also affects the life cycles of fungi, viruses, and pests that attack the vine. All this worsens the situation in the harvests because the plant that survives the heat may then face disease.

A Problem for All Varieties and Wineries

In summary, as Márquez points out, there is "a very significant effect at the vineyard level, on the business's profitability, competitiveness, and survival," which depending on the size of the company can be considerable. And also, widespread. Climate projections for the next 50 and 100 years predict a "significant decrease" in climatically optimal years for vine cultivation, especially impactful in regions such as Castilla-La Mancha, Extremadura, Andalucía, the Mediterranean coast, and the Ebro Valley.

"Any wine subject to these climate adversities is suffering," explains Joaquim Tosas, president of the Cava Producers Association (Aecava), who extends the climate blow from quieter wines (like red) to sparkling wines (like cava). For example, the rise in average temperatures in territories like El Penedés (Catalonia) has led to harvests being brought forward by about 30 to 40 days compared to the timelines managed three decades ago. In line with Márquez's argument about the loss of raw material and productivity, the president of Aecava summarizes: "We do not have the capacity to produce enough compared to sales from a few years ago."

In the Penedés Valley lies Juvé&Camps. Their production is distributed at three different altitudes (450, 420, and up to 650 meters above sea level), allowing them to observe one of the main effects of climate change: "Before, you could have about three years of drought every ten years, now we have three years of drought and three good years," they explain to EL MUNDO. In their action protocol, they have three strategies: the first, with a margin of between twenty and thirty years, will be to plant at higher altitudes and always within the Penedés (as they belong to this DO). The second will be to introduce native varieties into their crops such as mucharelo, garnacha, macabeo, or parellada. And the third step, increase thedistance between one vine and another so that, in case of drought, there are more chances of survival. Although the company cannot quantify the cost of these techniques economically, they can clarify that the cost of planting a hectare of vineyard is around 16,000 euros, although their plan is based on progressive regeneration.

Expert assessments demonstrate that the sector's worst fears are coming true. Already in 2020, the consulting firm McKinsey & Company focused on the problems that climate change would bring to Mediterranean wine producers, stating that rising temperatures in the region would lead to certain grape varieties no longer growing where they had for generations. The worst predictions, according to the consultancy, indicated that the Mediterranean surface suitable for viticulture could be reduced by up to 70%. "Certain cultivation areas in Italy, Portugal, and Spain could experience significant drops in production or even collapse," McKinsey warned in its report on climate change.

An Adaptation Costing 3.7 Billion Euros

It is expected that Spanish wine-producing regions, due to their geographical location, will be among the most affected by climate change. Consequently, the sector is seeking new tools to adapt to the new conditions as efficiently as possible. "This is what wineries are doing," emphasizes Márquez.

The FEV, representing over 950 wineries throughout Spain, established in the Climate Change Adaptation Plan for the 2024-2029 period a roadmap with a dual objective: to promote specific measures and obtain financial support to cover the significant investment in technology, mitigation mechanisms, or R&D projects with research centers to seek innovative solutions to this challenge.

However, not everything is yet to come: Spanish wineries have already taken action. In the short term, it is urgent to protect the vines from the sun's rays when, rather than nourishing the plant, they burn it. Shade nets or specific pruning are some of the simplest and most effective solutions. Other times, it is necessary to resort to chemicals, such as when the grapes ripen unevenly and treatments must be used to control and balance the fruit's pH.

There is still work to be done. There is no single recipe for adaptation, because conditions are not the same in all regions. While Castilla-La Mancha and Andalusia are experiencing historic temperature increases, the main problem in Galicia is the proliferation of diseases. And there is an added difficulty in terms of geography: industry laws and regulations (such as the Designation of Origin, DO) have become a barrier to making decisions to alleviate the impact of climate change. "These are things that we also have to analyze from the FEV's point of view to see how they can be made more flexible, because the scenario in the coming years will probably require it," reflects Márquez.

In recent years, wineries have gradually advanced their action protocols. The FEV points out that the wine industry has approximately 4,000 registered companies, many of them small family businesses without the financial muscle to make such investments. For this reason, one of the objectives set by the federation is to secure specific lines of financing estimated at more than ¤3.7 billion. With this amount, they estimate that around 34% of the current vineyard area, 326,000 hectares in the most vulnerable areas, could be protected for the coming years.

The fight against climate change from the vineyards is also making its way into universities and institutions. This is the case of the Catalan Institute of Vine and Wine (Incavi), whose 2030 Research Plan includes 19 "transformative" projects with a cost of ¤7 million and objectives such as recovering 20 types of grapes before 2030 or developing microbiological tools such as yeasts.

The Rioja Qualified Designation of Origin (DOCa) is already using AI and data collection. Taking advantage of the great diversity of climate in the Rioja region, with its Data Doc tool and more than 30 weather stations in 170 vineyards, they have set out to monitor the relationship between climate and the production of Tempranillo wine (80% of their total production). With this, they hope to create a model that anticipates the evolution of harvests. Partners such as the Institute of Vine and Wine Sciences and CESIC support this project, which has also received financial backing from European, state, and regional funds. In total, this investment amounts to ¤275,000.

Back to basics: another grape, another land

Committing to the region's historic grapes is a measure that is gaining popularity. This is the case, explains Tosas (Aecava), of the change from Chardonnay (a grape typical of cool and humid regions in France) to Charelo (another white grape native to the territory). On the other hand, there are other more modern techniques, such as the development of support irrigation systems (more typical of vineyards than fruit trees) or thermal satellite photography (to measure the water stress of plants and soil). The Codorníu company is using the latter techniques. "Last year, due to the persistent drought, we suffered yield reductions of up to 30% on some farms. Economically, this has been a major challenge," they acknowledge to this media outlet, although they hope that the situation will be corrected in the next harvest with a yield 35% higher than that of 2024. As part of its adaptation program, already underway, it plans to increase the use of drip irrigation systems; the use of moisture sensors and precision farming tools, such as underground irrigation; cultivation practices such as rootstock selection; and an R&D program focused on the genetic improvement of plants for their resistance to water stress.

The return to the origins also includes the land. Antonio J. Moral of the Spanish Federation of Oenology points out how southern England is becoming a target for investment groups, who are buying land for the production of sparkling wines. This trend has been joined by wineries in the French region of Champagne, taking advantage of the climatic conditions that still exist in British soil and date back several centuries, when Roman times allowed wines to be produced in Wales.

In Spain, the first experiments involve viticulture in areas where wine was not previously grown, in addition to the Pyrenees. For companies, the obstacles are once again the strict regulation of the sector and the DO, which is linked to a specific territory and characteristics that (for now) close the door to relocation. This is the case of the small family winery Clos Figueras, in the Priorat region (Catalonia). The last three years of drought have been very problematic for the old vines, destroying between 3% and 4% of their 2023 plantation. For replanting, they had to opt for other grape varieties, precisely because their DO prohibits them from trying their luck in the Pyrenees. Although each one prepares in its own way, adds its owner, Anne-Joséphine Cannan, because "there are areas in Bordeaux that have added vine varieties that were not previously approved by the DO, but are more adapted to climate change."

In fact, the consulting firm PwC recently explained how adaptation to climate change challenges the DO system in France, Spain, Italy, and other countries. The firm's analysts point out that wines within this regulation grow in relatively small climate zones, and with global temperatures rising above 2°C, the proportion of European land suitable for making good wine "plummets." Spain, Italy, and Greece are seen as particularly vulnerable by experts, who already estimate a loss of 90% of its Mediterranean wine-growing areas by the end of the century due to heat waves.

Aid to the sector

In 2022, the government approved a new Wine Sector Intervention (ISV) within the framework of the new Common Agricultural Policy (CAP), with a budget of ¤202.1 million per year between 2024 and 2027. Among the objectives of this new ISV, always within the fight against climate change, is the restructuring and conversion of vineyards and the infrastructure that forms part of the wine-growing process. However, the various companies consulted by this media outlet insist that the aid and support measures for the sector are "derisory" and that climate change is, right now, the elephant in the room for their wineries.

The rains of 2024, although welcome, may not be enough. The latest data from the Ministry of Agriculture, Fisheries, and Food for the 2024-2025 season indicate that wine and must production will reach 36.8 million hectoliters, an increase of 15% over the previous harvest but still 6% below the average for the last five years.

"This is going to be a relatively good year in terms of harvest," confirms Tosas. However, he points out that plants have memory, and after such severe droughts in the last three years, the vines are still too weak to recover their previous production rate.

As things stand, the sector can only cross its fingers and hope that 2025 will bring some respite (in terms of weather) and protect its crops from another year of severe droughts, storms, or hailstorms.