Wine producers in Canada’s two biggest markets say they are increasingly concerned as climate change and changing drinking trends hurt the industry.
Miles Prodan, president and CEO of Wine Growers British Columbia, said climate change has fueled drought in the summer, flooding in the fall and freezing in the winter – a combination of weather factors that has cut B.C.’s grape output in half this year.
“We've been seeing a steady decline over the years, but really, this last year, a freeze event in December has been catastrophic and has resulted in a 50 per cent loss in crop this vintage in 2023,” he told BNNBloomberg.ca in a phone interview.
In December 2022, B.C.’s Okanagan region faced record low temperatures as it dipped to -30 degrees Celsius in some areas and left heavy snowfall in most of the province.
Wine Growers British Columbia estimates the damaged crops will result in the loss of 381 jobs in the sector and $133 million in lost revenue as 29 per cent of the province’s total acreage needed to be replanted.
“With this last hit from the freeze event, it's just made that that much more important for us to replace the grapes, but that takes a number of years to come on,” Prodan said.
“You can't replace everything all at once or you would have nothing. It takes anywhere from three to five years for those grapes to establish and actually produce grapes again for wine.”
PUSH FOR GOVERNMENT HELP
Prodan is pushing both the federal and provincial governments for help with a “replant program” designed to help growers restock their damaged crops.
In 2022, the federal government announced $166.2 million in funding over two years to “implement a program to help the Canadian wine industry adapt to ongoing and emerging challenges.”
CLIMATE CHANGE CHALLENGES GLOBAL INDUSTRY
Wine production declines due to extreme weather are not exclusive to British Columbia.
A report last week from the International Organization of Vine and Wine, found global wine production in 2023 is at its lowest in 60 years.
The report found adverse weather conditions in Europe, the U.S. and the top-growing countries in the Southern Hemisphere hurt production. The only country in Southern Hemisphere with above-average production is New Zealand.
“Once again, extreme climatic conditions - such as early frost, heavy rainfall, and drought have significantly impacted the output of the world vineyard,” the report said. “However, in a context where global consumption is declining and stocks are high in many regions of the world, the expected low production could bring equilibrium to the world market.”
ONTARIO WINERIES FACE WANING DEMAND
Meanwhile in Ontario, severe drought in August 2021, followed by a high volume of rain in the fall damaged the province’s 2022 vintage. The devastation prompted $8 million in disaster relief funding from the provincial and federal governments.
Aaron Dobbin, president and CEO of Wine Growers Ontario, said the Ontario crop has rebounded nicely since then, but the industry is facing another issue: waning demand.
“While the production has rebounded, consumer demand is down,” he told BNNBloomberg.ca. “We've seen consumer demand for Ontario wine down anywhere between five and eight per cent, depending on the channel. The grape tonnage has returned, but the demand for grapes is down.”
According to Wines in Niagara, there were upwards of 4,000 tonnes of grapes left on the vines to be sold as of mid-October, that run the risk of millions of dollars in losses if they go unsold.
This comes as a rise in “sober curious” Canadians has led to a boom in the non-alcoholic drink market. According to a June report from the Conference Board of Canada, the non-alcoholic drink sector contributed $5 billion to Canada’s economy in 2019, though the numbers include soft drinks and not just non-alcoholic versions of alcoholic beverages.
“We're seeing a decline in the quantity of wine being consumed, not just B.C. wine, but worldwide and certainly here in the province, there's been a decline in wine sales,” Prodan said.
CAUSE FOR OPTIMISM
Together, Ontario and B.C. represented 95 per cent of Canada’s wine production in 2015, according to the U.S. Department of Agriculture Foreign Agricultural Service.
Despite the challenges, Prodan doesn’t believe B.C.’s wine industry is dying.
“Mother Nature is Mother Nature and we'll do what we need to do, but that's really going to require some support to make sure that we are guarded well for what's coming down the pipe, which we know is increased and continual climate change events,” he said.
Earlier this year, Wine Growers Ontario released its vision for 2030, which includes a plan to expand the domestic wine consumption within Ontario, bringing it up to par with similar jurisdictions. By 2030, WGO hopes 20 per cent of wine consumed in Ontario comes from Ontario growers.
“With the right policies in place, we think our industry has lots of opportunity. Particularly, Ontario has a lot of opportunity for growth,” Dobbin said.
“If we can improve our market share, even with flat to declining sales … there's lots of room for us to improve our market share in Ontario, which would allow our industry to grow.”
Dobbin is asking provincial and federal governments to reduce the taxation rate on Ontario wines, which would help the industry with production and advertising.
Spokespeople for the federal, Ontario and British Columbia agriculture departments were not immediately available for comment.
Source - https://www.bnnbloomberg.ca
