Climate change poses challenges for drinks industry
Hotter summers may have created some bumper years for drinks producers but climate change represents serious challenges to the drinks industry, not only in areas such as water and energy supply but in the case of wine in threatening the viability of established growing areas. Mark Rowe reports.
Climate change, the general scientific consensus now holds, is taking place, and will continue to happen even were we to stop our fossil fuel emissions overnight. And while some may glibly suggest that hotter summers would be good news for drinks manufacturers, the reality is that the drinks sector faces as many challenges as any other industry, in terms of ingredient and energy supplies, production adjustments and related commercial issues.
According to the UK's Met (Meteorological) Office, a security of supply in all energy markets is important to drink manufacturers and this is the economic consideration most threatened by climate change. Failures of supply - either by extreme events such as droughts or storms, or through long-term changes in weather patterns - would result in lost production and the need to switch to more expensive energy sources, which would increase costs and damage competitiveness.
Water scarcity, the Met Office says, is also a potentially huge issue. Reliability of water is, naturally, essential to the drinks manufacturing industry, with shortages threatening damage to crops by drought and to production facilities that are unable to cool their apparatus with sufficient water.
The drinks sector is responding in two ways: it is drawing on precise forecasting services, such as those offered by the Met Office, which can provide companies with reliably accurate and tailored risk assessment forecasts of when to start upping supplies of drinks to their markets; when they would have to make additional plans for water sourcing; and where, in terms of locality, may be the best places to plant certain ingredient crops.
The challenge is clear enough. According to research in the US scientific journal Agricultural and Forest Meteorology, wine production losses in California could hit 40% because of rising temperatures due to climate change.
In Oregon, where the wine industry is worth around US$1bn, vintners are already relocating their vines uphill to keep them cool as summers heat up. Furthermore, researchers from the north-west US's University of Washington predict the region's climate will soon become unsuitable for growing wines in their present location. This is because uncharacteristic heavy winter rains are likely to intensify, begin earlier, and fall in place of snow.
Over in France, at the vineyards of the Loire Valley, harvests now start ten days earlier than 20 years ago. And the country's wealthy Champagne houses, which are also establishing a presence in California and New Zealand, are increasingly looking at future land purchases across the English Channel. More sun, and a rise of 0.5 degrees in recent years, has already made the chalk North Downs of Kent a more sympathetic home to sparkling wine than has historically been the case by increasing the ripening period, and local estate agents have confirmed they are representing French Champagne producers. "The half a degree rise does help," said Frazer Thompson, chief executive of English Wines Group. "But there will be other minor differences such as wind strength."
While Thompson acknowledges that an increased level of flooding would cause some problems, he believes climate change will benefit the English wine and sparking wine industry. "We're seeing a line move northwards, turning marginal areas into viable areas, and viable areas into thriving ones," he said. "But in its wake [to the south] it will leave a lot of devastation."
According to the Confederation of Food and Drink Industries of the European Union (EU), hops may also start to march northwards from traditional heartlands such as Germany. "The big issue for all brewers is water," said a spokesman. Areas in the UK, such as Herefordshire and Worcestershire, where temperatures and rainfall are expected to rise, may enjoy a boom in hop growing.
But a lack of cold, as well as excessive heat, is a challenge too: Canada's ice wine industry, which relies on freezing grapes and thawing to dehydrate the fruit and concentrate the sugars, acid and berry extracts, faces an uncertain future, thanks to a succession of erratic winters. Frosts have come later, sometimes not until March.
Yet the picture is mixed. The lack of frosts has been keenly felt in eastern Canada; but in British Columbia, ice wine growers staged an early harvest this season. "The concern is much about the rapid changes in temperature," said Laurie Macdonald, executive director of the Vintners' Quality Alliance in Ontario. "Ideally, wines have a lot of time to adapt and to go into dormancy and gradually wake up but sometimes the temperature changes have been very fast."
Canadian ice wine manufacturer Paul Bosc Jr, of Chateau des Charmes, admitted that climate change poses a daunting challenge. "Since it's illegal to artificially freeze the grapes here in Canada, I have no idea what we would do in the event of winters that became too mild to naturally freeze grapes at the required temperatures," he said. "If such scenarios become commonplace in 30 or 40 years then my kids will harvest the grapes in September or October and make table wine."
Hotter summers may have created some bumper years for drinks producers but climate change represents serious challenges to the drinks industry, not only in areas such as water and energy supply but in...
- Analysis - SABMiller to add bolt-ons in Africa?
- A-B InBev's Move on Tennent's Super Makes Sense
- India: Everyone's Favourite Spirits Market
- Brand Diversification Driving Craft Brewery Growth
- Comment - SABMiller and Diageo: A Tie-Up Too Far
- Diageo scraps Arthur's Day, but singer left sad
- William Grant sinks GBP185,000 into "No" camp
- SodaStream silent on John Lewis pullout in UK
- PepsiCo CEO sees "profound" change in US consumers
- William Grant & Sons boosts Travel Retail team