Foster’s Turns to Tempranillo as Climate Change Bakes Vineyards
Aug. 21 (Bloomberg) -- Stuart McNab, head of Australian wine production at Foster’s Group Ltd., is planting Spanish varieties such as Tempranillo and cooling vines with sprinklers to combat one of the industry’s biggest threats: climate change.
“We could see one in ten vintages wiped out,” said McNab, standing on a mechanical harvester at the company’s Robe vineyard, 250 miles south of Adelaide. “If this doesn’t work, we may have to look at moving south.”
The world’s second-largest winemaker is harvesting on average three weeks earlier than two decades ago because of global warming, giving the grapes less time to develop flavors needed for wines such as its $500 Penfold’s Grange. The company is trying mist sprays, originally installed to battle frost, to cool grapes, while rival Constellation Brands Inc. is building underground watering systems and planting varieties like Spain’s Tempranillo.
Australia, which planted its first vineyards in 1788, has 170,000 hectares (420,000 acres) under vine, generating A$2.7 billion ($2.3 billion) in annual exports, according to government figures.
“Climate change is affecting everyone,” Australia’s Climate Change Minister Penny Wong said in a July 31 interview in Sydney. “Grape growers in the Adelaide Hills are being forced to look at other grape varieties.”
Australia’s average annual temperature has risen 0.9 degrees Celsius in the past 100 years, according to the Bureau of Meteorology. In grape growing regions, the weather could become a further 2.6 degrees Celsius warmer by 2050, according to modeling by the University of Melbourne.
For Foster’s and Constellation, solutions need to be found now to protect future vintages. Foster’s gets 46 percent of its A$4.5 billion of annual sales from wine. Constellation’s wine sales are worth $3.2 billion.
“With an agricultural product, which is what wine really is, you need to be conscious of these impacts and have a plan for it,” said Theo Maas, who helps manage $3.5 billion at Fortis Investment Partners in Sydney, including beverage stocks. “It’s creeping onto the radar screen of things to consider.”
Warmer weather shortens the growing season for grapes, accelerating the build up of sugar, which converts to alcohol, while limiting the development of flavor in the skin and juice for varieties grown in Australia like chardonnay and shiraz.
Spanish Grapes
Victor, New York-based Constellation, the world’s largest winemaker, began planting Tempranillo, Montepulciano and Vermentino in some regions to see if the varieties that prosper in warmer parts of Spain and Italy can succeed in the hot Riverland area of Australia.
Foster’s is employing technologies such as infra-red sensing to maintain quality. Planes take images of the vineyard to see where growth is most vigorous. The data is sent to GPS- equipped harvesters that adjust their picking, said McNab.
About 23 percent of Foster’s vineyards are in regions classified as cool, with that proportion expected to fall to around 3 percent in 2030 if weather trends continue. While only 10 percent of current plantings are considered hot to very hot, that would rise to about 21 percent, according to the company.
In the Barossa Valley, which produces more than 25,000 metric tons of shiraz annually, Foster’s picked the 1992 harvest on March 29. In 2007, the grapes reached the desired sugar level on Feb. 28.
More Alcohol
“If you leave the grapes on the vine longer to develop flavor in the skins, you end up with much more sugar and then alcohol and that is all the drinker ends up tasting,” said Snow Barlow, who heads the University of Melbourne Viticulture Group, which studies vineyard management. “Climate change affects that whole equation.”
In Spain, warmer weather prompted makers such as Miguel Torres SA to develop vineyards in cooler areas such as Catalonia while the French legalized irrigation of some vineyards in the past four years, ending a century-old ban.
Colder wine-growing regions like southern England are benefiting, with producers such as Ridgeview Wine Estate Ltd. in Sussex harvesting French grape varieties. Wine writer Oz Clarke said Scotland may one day make the world’s best wine because of climate change.
“There are no great wine regions unaffected by this and if you wait until you have the perfect answer you will either be dead or you will be broke,” said Barlow. “You can go back to Darwin to know it’s not the biggest or the most intelligent that necessarily survive, it’s those that adapt.”
In addition to the mist sprinklers, new varieties and use of the leaf canopy to shade the grapes, Foster’s is considering buying land on the southern island of Tasmania.
Moving South
The problems with moving to Tasmania or higher ground in Victoria state are the cost of land, terrain unfit for mechanical harvesters, and competition for water with cities and other crops, said McNab.
“You don’t just need enough water for today, you need to know it will be enough in 50 years,” Barlow said. “If you don’t have access to water, it doesn’t matter how much cooler the weather is.”
The flow of water into the Murray Darling River Basin, where 83 percent of Australia’s grapes are grown, is at a 117- year low because of a decade-long drought.
Ten years ago, McNab decided to end red wine production at the Drumborg vineyard, Foster’s most southerly mainland plantings, because grapes struggled to ripen.
“I’m the person who ordered the death sentence for Drumborg cabernet sauvignon because it was only producing a decent wine every 5 years or so,” McNab said. “I might be pushing to re-plant it in 10 years’ time.”