Vignes & Climat
π Planet
Wine industry: a sector evolving in the face of climate change?

Consumers are put off by “global warming wines”

Clément Boulle, Executive director of Polytechnique Insights
On March 18th, 2021 |
4 mins reading time
4
Consumers are put off by “global warming wines”
Eric Giraud-Héraud
Eric Giraud-Héraud
INRAE research director and research lead at Institut des Sciences de la Vigne et du Vin
Key takeaways
  • In 2015, Éric Giraud-Héraud conducted a survey with ISVV on 250 Bordeaux wine consumers to determine their willingness to pay for "global warming wines".
  • The result was that these wines, which are higher in alcohol, were initially appreciated by consumers... who, however, quickly tired of them, and saw their willingness to pay collapse.
  • The risk is that the red wine market will collapse to the benefit of other more dynamic segments, such as rosé wines or organic wines.

Can we tell if glob­al warm­ing is good or bad news for the wine business? 

Éric Giraud-Héraud. Not real­ly, no. But in order to answer cor­rect­ly we need to put things into con­text. If we look at the cur­rent mar­ket, glob­al con­sump­tion is sta­ble – even on the rise. Yet this ten­den­cy does not ben­e­fit every­one. Bor­deaux wines are an exam­ple of an eco­nom­ic cri­sis, part­ly explained by a change in what con­sumers want and the choice of prod­ucts on the market. 

Indeed, we have not­ed a struc­tur­al change in red wines for sev­er­al years. We see an increase in alco­hol con­tent, decrease in acid­i­ty and degra­da­tion of aro­mat­ic com­plex­i­ty. In addi­tion, wines are often more con­cen­trat­ed and dom­i­nat­ed by aro­mas of stewed fruits. 

We showed that this does not meet the expec­ta­tions of con­sumers of Bor­deaux wines. Yet over the past decade, pres­sure from wine-spe­cialised con­sul­tants and oth­er short-sight­ed advi­sors, many wine­mak­ers opt­ed to con­cen­trate their wines and arti­fi­cial­ly increase the degree of alco­hol when they didn’t need to, yet. This move­ment was fur­ther ampli­fied by what we call wine “park­eri­sa­tion”– named after the Amer­i­can wine crit­ic Robert Parker. 

In the end, though, the demand is dif­fer­ent. As it turns out, wines which pre­ma­ture­ly mim­ic the effects glob­al warm­ing are no longer in demand and the eco­nom­ic risk of such deci­sions is already kick­ing in.

What is the impact of these developments? 

In 2015, we con­duct­ed an exper­i­men­tal study with 250 con­sumers to try to under­stand what was hap­pen­ing. By using the method­ol­o­gy of exper­i­men­tal mar­kets, we mea­sured con­sumer will­ing­ness to pay for a wine in dif­fer­ent, con­trolled sit­u­a­tions (relat­ed to wines and their labels). Put sim­ply, we invit­ed a large num­ber of con­sumers rep­re­sen­ta­tive of a pop­u­la­tion. They were asked to “reveal” their will­ing­ness to pay for each pre-select­ed wine. To avoid bias, the wine was ran­dom­ly drawn in a bal­lot box and if its cost was low­er than the price the con­sumer was will­ing to pay, then he or she agreed to buy the wine in ques­tion. We per­formed this exper­i­ment with a well-known wine from Bor­deaux. The main grape vari­ety of this AOC is Mer­lot, which is vari­ety strong­ly affect­ed by glob­al warming.

What were the results of this study?

The study was car­ried out in two stages. First, with experts in sen­so­ry analy­sis of the ISVV, we select­ed 30 wines before keep­ing only three of them (I am not at lib­er­ty to reveal their names). Then, 250 con­sumers were recruit­ed to test the select­ed wines (colour, odour, taste) before reveal­ing their final willingness-to-pay. 

  • Wine A: a tra­di­tion­al wine of the AOC. Even though it had the low­est mar­ket price, it had a good com­plex­i­ty, and low alco­hol con­tent of 13.5%. 
  • Wine B: a wine regard­ed as a “glob­al warm­ing wine”, which is con­cen­trat­ed, pro­duced with low yield, and con­tains 15% alcohol.
  • Wine C: an inter­me­di­ary between A and B on the range of all the characteristics.

Results: con­sumers were will­ing to pay sig­nif­i­cant­ly high­er prices for wine B than wine A. Wine C came out some­where in the mid­dle (which was not clear at first). There­fore, the only pos­si­ble inter­pre­ta­tion was that the con­sumers pre­ferred con­cen­trat­ed wines with high­er alco­hol con­tent, and thus that con­sumers pre­fer “glob­al warm­ing wines”!

Were you sure of your conclusions? 

No. We thought that there might be a “flat­ter­ing” effect to this wine B and that we need­ed to test what we call “pref­er­ence sta­bil­i­ty”. This would mean that the con­sumers took plea­sure in drink­ing this type of wine at the time of the exper­i­ment, but that over time this demand might change. We there­fore moved on to the sec­ond stage of the exper­i­ment. We gave wines A and B to the con­sumers and asked them to taste these on four dif­fer­ent occa­sions dur­ing one week­end, i.e., twice per day. Then, with­out giv­ing fur­ther infor­ma­tion, we told them to come back and see us to reveal again their will­ing­ness-to-pay for wines A, B and C. The result is as fol­lows: the will­ing­ness-to-pay for wine B col­lapsed while the price for wine A stayed the same. Wine C kept its inter­me­di­ary posi­tion, with a slight decline in will­ing­ness-to-pay. We thus observed that con­sumers grew weary of wine B, which more or less gives some idea of the con­se­quences of glob­al warm­ing on Bor­deaux wines if we are not careful.

What com­mer­cial con­clu­sions can we draw from this exper­i­ment? 

In 2015, there­fore, we man­aged to mea­sure and char­ac­terise the eco­nom­ic risk that glob­al warm­ing can rep­re­sent: con­sumers grew weary of char­ac­ter­is­tics and no longer sought them. This effect is sys­tem­at­i­cal­ly neglect­ed by pro­fes­sion­als in the wine sec­tor because they make snap judge­ments, or even naïve deci­sions. We would need to per­form this exper­i­ment again with oth­er wines and pop­u­la­tions to sup­port our con­clu­sions; but by using only one exper­i­men­tal mar­ket we did nev­er­the­less show that (for this type of wine, at least), con­sumers do not nec­es­sar­i­ly demand a high degree in alco­hol, con­cen­tra­tion and con­sis­ten­cy. The past decade has con­firmed this through the mar­ket cri­sis for some red wines, the rise of rosé wines, and the devel­op­ment of com­plete­ly new mar­kets such as organ­ic wine, or alco­hol-free alternatives. 

Wine­mak­ers must there­fore devel­op the taste of their wines by draw­ing inspi­ra­tion from research stud­ies and inno­va­tions in the field of oenol­o­gy if they want to win back their markets.