Sustainable Wine – Balancing Environmental, Social and Economic Issues

I am often asked, “What does sustainability mean for wine?”   Given that I work for a company called Aura Sustainability, as a specialist consultant to the wine industry, this is a fair enough question.

[Join TSSS for a live event on this subject with the owner of the Canadian Sustainable Vineyard, Southbrook – the event will be offerred via LIVESTREAM for those who are not able to attend in person.  Click here to learn more.]

I see sustainability much as I do wine – as a journey not a destination.  It’s about continual improvement; sustainability is much more about a cultural imperative, and less about a tangible definitive.   It is also a very holistic term and the reason I find it so compelling is the symbiosis and balance (and often imbalance) between the environmental, economic and social elements that make up “sustainability”.

So, what does sustainability mean for wine?  How does meeting the needs of today, without compromising future generations’ ability to meet their needs, affect the wine industry?  I will attempt to deal with this question over a series of blogs.  But to start with here is a bit of a background on the sustainability issues facing the wine industry.

As a luxury product, wine relies on marketing to ensure that consumers perceive its value at a level that allows for a sustainable profit for its producers.  Wine must have marketability, a reason why consumers should pick up the bottle and take it to the checkout.  One of the common ways wine is marketed is by harnessing the natural and romantic qualities of wine production.  Sweeping vineyards tended to by generations of the same family, grapes being crushed by foot, juice being fermented in oak casks in caves, etc.  Of course the reality of most commercially available wines is very different indeed.  More recently there has been an abundance of what the industry likes to call “critter labels” – images of flora and fauna that adorn wine labels to validate the relationship between wine and nature.

Given that wine has long been marketed as a natural product, it is of little surprise that this industry has been one of the first agricultural sectors to embrace the concept of sustainability, particularly to evoke in consumers a feeling that wine is a natural product and not industrially manufactured.

In New Zealand, where our head offices are based, there is a strong industry approach towards promoting wines as “sustainable”.  There is now an industry wide environmental management programme in place and there are efforts to ensure that much of the industry is certified to this programme.  New Zealand’s lead has seen similar programmes put in place in other world wine regions such as California, Oregon, South Africa and Australia.  The wine industry is working to recognize initiative in areas such as organic production, bio-dynamics, carbon labeling and packaging innovation,

This leading approach by the wine industry is to be applauded, but we need to bear in mind that sustainability is not just about the environment, it’s about social and economic impacts as well.  When you take this into account you have to ask how sustainable current wine production is in places like New Zealand and Australia?

In New Zealand 30% (if not more) of wine made in 2011 could be sold in bulk to agents and retailers who then ship it overseas to be bottled.  In many instances, the price paid for this bulk wine by the agent or retailer is less than the cost to sustainably produce it.  This has been brought about by an oversupply made possible primarily by a lack of regulation whilst the industry was expanding – such a common occurrence in Australasia over the years that it even has its own moniker – “boom and bust agriculture”.  The New Zealand wine industry aims to be to be 100% environmentally sustainable by 2012, but ironically, in the short term, the majority of its production could well be economically unsustainable.

The Australian wine industry has been in similar straits for the last 10 years and this has been compounded by droughts and floods that have been attributed in part to climate change.  For example, the iconic and naturally beautiful Clare Valley, one of the finest producers of cool climate Riesling and Shiraz in the world, was so impacted by climate in 2007 that winemakers in the region could produce only 50% of the previous year’s wine volume.

This impacted both their short term profitability and their ability to supply the market.  Slowly wines from the Clare started to give up their shelf space to wines from other wine regions.  When wine production went back to normal they found it very hard to fight their way back onto the shelf, with buyers using this oversupply to drive the price of Clare Valley wines downwards.  This lack of profitability led to a number of large corporate wine companies leaving the region.

Given that the very fabric of wine is built around seasonality it is tragic that the long term viability of a historic 170 year old wine region could be put in jeopardy by one low volume annual harvest.  For any wine region it is imperative that supply meet demand so that there is not a reduction in the region’s brand equity.

There is a clear link between economic and social sustainability.  If there is less economic benefit from wine production, then wine dependant regions will see a reduction in social equity as with a reduction in agricultural profits can come a reduction in quality of life, employment and community infrastructure.  A significant amount of wine sold on supermarket shelves around the world does not meet the requirements of Fair Trade in regards to fair payments to producers throughout the supply chain.

True sustainability in the wine industry is only possible with a commitment from producers, distributors and consumers.  I leave you with one thought on sustainability and wine: The next time you pick up a wine in your local store and are looking for a sign that it was made sustainably, price could be your first indicator – remember, you get what you pay for.  But in this case, it may also be other people and the planet that pay.

Roger Kerrison is a consultant who works in the Food and Beverage industry in the fields of design, development, systems and management in sustainability for Asia Pacific consultancy Aura Sustainability.