From risk to reward: the strategic advantages of diversifying grape varietals
International Journal of Contemporary Hospitality Management
ISSN: 0959-6119
Article publication date: 5 January 2024
Abstract
Purpose
The purpose of this study is to evaluate whether a diversification by grape varieties may help wine producers reduce uncertainty in quantity and quality variations due to increasingly erratic climate conditions.
Design/methodology/approach
This study hand-collects granular quantity and quality data from wine harvest reports for vintages 2003 to 2017 for the Valais region in Switzerland. The data allows us to obtain detailed data on harvested kilograms/liters and Oechsle/Brix degrees. It is then merged with precise meteorological data over the same sample period. The authors use this data set to capture weather conditions and their impact on harvested quantities and quality. Finally, they build portfolios including different grape varieties to evaluate whether this reduces variations in quality and quantity over vintages.
Findings
The findings highlight that the weather varies relatively strongly over the sample period and that climate hazards such as hail, frost or ensuing vine diseases effectively occur. These strongly impact the harvested quantities but less the quality of the wine. The authors further show that planting different grape varieties allows for a significant reduction in the variation of harvested quantities over time and thus acts as a good solution against climate risk.
Originality/value
The effect of climate change on viticulture is becoming increasingly important and felt and bears real economic and social consequences. This study transposes portfolio diversification which is central to reducing risk in the finance industry, into the wine industry and shows that the same principle holds. The authors thus propose a novel idea on how to mitigate climate risk.
Keywords
Acknowledgements
The authors thank two anonymous reviewers, the editor and two guest editors for valuable comments and guidance. They also thank participants and discussants at the AAWE, EUAWE and ARWHM conferences for their feedback. The authors acknowledge financial support by the HES-SO//Hautes Ecole Spécialisée de Suisse occidentale and Romaine Christen for excellent data collection and research assistance.
Citation
Masset, P. and Weisskopf, J.-P. (2024), "From risk to reward: the strategic advantages of diversifying grape varietals", International Journal of Contemporary Hospitality Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJCHM-06-2023-0801
Publisher
:Emerald Publishing Limited
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