This 12 months’s wine harvest is in full swing on the perennially popular Greek island of Santorini, but for local winemaker Yiannis Paraskevopoulos, the prospects don’t look good.
Extreme temperatures are threatening production of the indigenous Assyrtiko grape, critical to the island’s internationally recognized nice white wines. Last 12 months’s output at Paraskevopoulos’s Gaia Wines was around one-third of 2022 production. This 12 months’s harvest is estimated to fall to one-sixth of 2022 levels.
“We thought we had seen the worst. But no, we hadn’t: 2024 has gone beyond all expectations,” Paraskevopoulos told CNBC over the phone.
In line with Gaia Wine’s 2023 estimates, Assyrtiko could face extinction by 2040. Now, that timeline looks optimistic.
“It brings the trend line even closer to the current,” Paraskevopoulos said.
Falling wine production
The Assyrtiko grape just isn’t alone. Global wine production fell 10% in 2023 to 237.3 million hectolitres, the bottom level in over 60 years, as “extreme climactic conditions” weighed on harvests, according to the International Organisation of Vine and Wine (OIV).
The problems facing wineries prompted the European Union to last month launch a high level group on wine policy to debate the “challenges and opportunities for the sector.”
Production in Greece plunged greater than one-third in 2023, while output from Italy and Spain dropped by greater than one-fifth, based on OIV, as wineries in southern Europe increasingly experienced hostile weather effects including heavy rainfall, drought and early frost.
Such weather events can impact not only a given 12 months’s harvest but additionally production in following years.
“We’re absolutely affected by climate change,” a guide at Castello di Volpaia told CNBC during a recent tour of the twelfth century winery in Tuscany, Italy.
Large barrels store Chianti Classico wine at Castello di Volpaia in Tuscany, Italy.
CNBC
“Climate change is significantly influencing wine production and its quality,” Marco Fizialetti, industrial director at nearby Castello di Querceto, said via email. “This example has created difficulties for all producers who already had to administer high temperatures up to now.”
Weaker output and more difficult production conditions are pushing up costs in an already largely price sensitive consumer market. Wine consumption was down 2.6% annually in 2023, hitting its lowest level since 1996, because of higher production and distribution costs which led to higher prices for consumers, OIV estimates showed.
That is champagne prices. When a bottle is dearer than a Burgundy, what is going to a buyer do?
Yiannis Paraskevopoulos
co-founder of Gaia Wines
As of August 2024, one kilogram of Assyrtiko grapes cost eight ($8.9) to 10 euros, around double 2022 prices.
“That is champagne prices,” Paraskevopoulos said, noting that Gaia Wines has not yet reflected the heightened costs in its final bottle price. Nonetheless, he said it is going to need to accomplish that eventually, and that may hurt business.
“When a bottle is dearer than a Burgundy, what is going to a buyer do? We’ll lose market that we have now struggled to be in,” he said.
Changing production methods
Some winemakers are actually altering their production methods to adapt to the shifting environmental landscape.
At Antinori nel Chianti Classico, the latest in a set of estates belonging to Marchesi Antinori, one in every of Italy’s oldest and largest winemakers, vines are actually being planted in latest directions to reap the benefits of the increased sun exposure.
“Until just a few years ago, you’ll plant the vineyards southwest facing. Now you may plant them northeast facing due to the acute heat you get exposure” from each directions, President Albiera Antinori told CNBC over the phone.
Close up of kouloura style vines in Santorini, Greece.
Erica Ruth Neubauer | Istock | Getty Images
Other techniques the estate is employing include raising trellises to extend air circulation and planting grass in between vines. Antinori said that has helped the estate improve production quality over recent years at the same time as quantity has fallen.
Nonetheless, she described the boost as “la vittoria di pirro,” or Pyrrhic victory, a feat which incurs such a value it’s barely value winning.
Sergio Fuster, CEO of Spanish wine group Raventós Codorniu, noted that lots of the regions during which it owns vineyards are in a state of emergency and, as such, they’ve needed to grow to be “increasingly efficient” with water usage, as an example by utilizing buried irrigation systems.
Other winemakers are working the fields in the peak of summer to reply to earlier harvests. At Domaine Skouras in Greece’s Nemea, this 12 months’s harvest began a record 20 days early. Winemaker Dimitris Skouras said a discount in fungal disease had improved grape quality, nevertheless he still expects lower yields overall.
We cannot predict the changes to come back or the acute weather we’d face.
Dimitris Skouras
winemaker at Domaine Skouras
“This 12 months has been exceptionally hot. The winter was unusually short, and temperatures rose rapidly afterward, with July being the most popular on record. In our vineyards, we’re seeing lower production levels than last 12 months, which was already quite low, especially for Agiorgitiko,” he told CNBC via email, referring to the grape variety utilized in the region’s red wines.
Skouras is now planting vineyards at higher altitudes, where temperatures are generally lower, and he’s identifying areas with higher water supply to assist the vines withstand the warmth.
“There aren’t any definitive solutions yet, as we cannot predict the changes to come back or the acute weather we’d face. Our strategy is to adapt to this latest reality in viticulture as best we are able to,” Skouras said, referring to the study of cultivating grapes.
Elsewhere, nevertheless, the hopes of adaptation are less clear. On Santorini, where grapes are grown in traditional “koulouras,” or baskets, to guard them from the island’s strong winds and intense sunlight, the vines risk becoming much more exposed to harsh weather conditions.
“These vines have root systems that return three, 4, five centuries, and so they’re dying,” Gaia Wine’s Paraskevopoulos said.
Tourism accountable?
Extreme weather just isn’t the one issue afflicting Europe’s vineyards. Increased tourism has also seen investment and manpower shift traditional agricultural work to the hospitality sector.
For thus-called agritourism destinations, resembling Tuscany’s Castello di Volpaia, which houses a small accommodation complex on the estate, guest stays can offset the prices related to weaker production output. At Marchesi Antinori, cellar tours and cookery classes are all a part of the offering.
“We’re fortunate to be in a region and a rustic where we do not see a discount in tourism – quite the other,” Antinori said.
A winery in Tuscany, Italy.
CNBC
But Paraskevopoulos said he fears that places like Santorini, which have ridden the wave of rising tourism, could ultimately grow to be victims of their very own success.
“Climatic change is definitely very alarming, but tourism can also be accountable,” he said. “Young Santorinians don’t put money into wineries anymore because they produce other ways of getting cash.”
The shifting landscape will now see EU representatives and industry stakeholders gather for wine policy discussions, with their first meeting due next month. The group is because of meet at the very least thrice this 12 months, before presenting their recommendations in the beginning of 2025.
It’s hoped that such measures could reduce a few of the biggest risks facing the industry, which across the bloc alone employs around 3 million people and contributes an estimated 130 billion euros to EU gross domestic product.
“That is the trend line if you happen to don’t intervene,” Paraskevopoulos said of the Assyrtiko extinction forecast. “And that is the query: will we intervene in time and can we achieve success?”
