GREEN ISSUES – ORGANIC VINES – Eco Vines

Euromonitor’s Tom Joyce compares the ‘green credentials’ of the leading wine-producing countries

 As the organic food industry  reports strong yearly growth, organic wine is lagging behind. A lack of consumer awareness, combined with timidity on the part of the larger winemakers and retailers, has hampered progress. Nevertheless, production of organic wine in the Old World continues to grow as the search for higher margins heats up and producers endeavour to stand out in this highly competitive environment.

The amount of land dedicated to organic production in the Old World, particularly in Italy, Spain and France, is on the increase. According to the Spanish Ministry of Agriculture, Spain dedicated 15,990 hectares to the production of organic grapes in 2005, a 7% increase on 2004. In France, the three key provinces for organic wine production – Languedoc Roussillon, PACA (Provence-Alpes-Côte d’Azure) and Aquitaine – have seen organic vineyard area grow by 8%, 15% and 19% from 2004-05.

But even in these important nations organic vineyards account for a mere 1.5% of total vineyard space, according to Euromonitor International’s research. Italy is the current leader, with more than 30,000ha of organic vineyards representing over 3% of the total.

Despite the increase in organic vineyard area in countries like France, Spain and Italy, these national markets remain tiny, and the majority of production is destined for export markets. In France, an estimated 55% of organic wine is exported, with Germany the primary destination.

In the New World, the amount of land dedicated to organic wine production lags far behind, though California leads the pack. According to David Cox, managing director of Brown-Forman Wines, which owns California-based organic Bonterra Vineyards, the State possesses approximately 3,200ha of organic vineyards, 1.5% of California’s total vineyard area.

As for the rest of the New World, Cox says, “Chile is currently a hotbed for organic production and is growing at a rapid pace. In comparison, however, Australia and South Africa are experiencing considerably less activity.” Winemakers in South Africa continue to be deterred by the market’s miniscule sales potential, with organic wine sales accounting for approximately 1% of the country’s total still wine sales.

Despite organic winemakers’ efforts to tailgate the success of organic food, consumer demand remains niche, partly due to the lack of a readily perceivable health benefit, such as the protection against cell damage and blood clots offered by organic milk. “Many consumers still hold the belief that wine is a natural product and remain oblivious to the use of fertilisers and other chemicals,” says Cox. “There is a need to educate consumers about what it actually means to be organic.”

A further hindrance is the reticence of the larger retailers and on-trade establishments. In the UK, most supermarkets stock less than 10 organic wines, while restaurants customarily refuse to note the organic status of a wine for fear of implying an inferiority in other wines. Few consumers actively seek out an organic wine, making it imperative for producers to stress premium positioning over organic credentials. Organic wines are usually priced at a premium, but in some cases, despite being comparatively more labour-intensive, savings made from eschewing expensive pesticides, fertilisers and fungicides can render organic methods no more costly, thus making margins attractive.

If organic wine is to experience even remotely comparable growth, considerably greater investment from manufacturers in production and marketing is essential, including a concerted campaign to educate consumers about the benefits of organic wine.

© db January 2007

For more information about Euromonitor International’s Alcoholic Drinks research, please visit www.euromonitor.com/ Alcoholic_Drinks, or call Michael Jones on: +44 (0)20 7251 8024