Constellation Brands, Fortune 500® company, is a leading international producer and marketer of beer, wine, and spirits with operations in the United States, Mexico, New Zealand, Italy, and Canada. The Company, which has dozens of premium wine brands in its portfolio, is one of the top wine producers in the world. In recent years, climate change has become a major consideration for wine producers such as Constellation Brands, impacting both existing winemaking operations, as well as the acquisition and development of new vineyards. Increasing temperatures primarily affect vine phenology, which includes everything from the onset of ripening and accumulation of sugars to acidity and secondary metabolites. Meanwhile, water deficits can impair photosynthesis, shoot growth, and grape size.
While Constellation Brands provides private data to and works with researchers to understand the impact of climate change on wine making, the Company provides limited public disclosures regarding its business initiatives to adapt to climate change. Its public initiatives are generally through the Company’s robust corporate sustainability practices. It’s California vineyards are all part of the California Sustainable Winegrowing Alliance, which is based on 227 best management practices and 58 prerequisites covering environmental practices and socially equitable business practices. This broad alliance helps ensure the long-term viability of California winemaking by improving the sustainability practices of existing winegrowers, while simultaneously limiting the expansion of both existing and new growers. With regards to climate change specifically, the Company’s initiatives around responsible water usage enable to company’s vineyards to better adapt to a changing climate.
Many additional potential opportunities exist in the short term to reduce the impact of climate change on existing winegrowing operations. A variety of strategies can be used in existing vineyards to reduce the impact of rising temperatures. Changing canopy management practices can provide additional shade to reduce sugars and increase acids, while strategic trellising can improve cooling. Meanwhile, the impact of increasing water deficits can be mitigated by converting high-risk vineyards to more draught-tolerant varietals such as Grenache, or improving erosion control. Changes on the wine production side can also mitigate what changes may have occurred in the growing phase. More alcohol-tolerant yeast strains can reduce higher sugar and alcohol levels during fermentation, while ultrafiltration or reverse osmosis can be used to reduce sugar levels.
Climate change also introduces new long-term opportunities for wine growers. Moderate increases in temperature generally leads to earlier harvest and better wine. However, drought conditions have the opposite effect. In Europe, these effects tend to be decoupled, yielding superior wines from already premium regions such as Bordeaux. Meanwhile, in California, higher temperatures generally occur in tandem with drought, resulting in mediocre vintages. Currently, Constellation Brands is concentrated in California and Italy, with much smaller presences in Washington State, Canada, Mexico, and New Zealand. Constellation Brands could diversify to cooler, wetter regions in the United States and Canada in anticipation of the increasing effects from climate change. Internationally, regions such as Italy may become inhospitable to wine production by 2050, while Southern England could become a premium producer in the same timeframe. The Company should consider acquiring or developing operations in regions that will benefit from climate change, and where climate patterns tend to decouple droughts from rising temperatures.
Many questions regarding the opportunities and risks remain outstanding. As premium winegrowing regions shift, and different varietals become more or less viable, how should Constellation Brands adjust consumer perceptions and demands through marketing? How could Constellation Brands attempt to manage the impact of climate change further up in the supply chain, particularly the production of oak barrels, a vital component of winemaking.
 Constellation Brands, “Sustainability” http://www.constellationcsr.com/sustainability/, accessed November 2017.
 Cornelis van Leeuwen and Philippe Darriet, “The Impact of Climate Change on Viticulture and Wine Quality.” Journal of Wine Economics, Volume 11, Number 1 (2016): 150–167, Wine-Economics, accessed November 2017.
 Brands, “Sustainability.”
 Benjamin I. Cook and Elizabeth M. Wolkovich, “Climate change decouples drought from early wine grape harvests in France.” Nature Climate Change, Volume 6 (July 2016): 715 – 720, accessed November 2017
 Michelle Renée Mozell and Liz Thach, “The Impact of Climate Change on the Global Wine Industry: Challenges & Solutions.” Wine Economics and Policy, Volume 3, Issue 2 (2004): 81 – 89, ScienceDirect, accessed November 2017.