Strategy and company management

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When impacts of climate change or other threats affects the health of the wine estate, of the vine grower or another wine value chain company different none technical levers can be mobilized to improve the economical result of the company while suffering from for instance variying or lowering yield.

In contrast to more strategic or transformational changes these types of options can be seen as marginal or incremental adaptations. Indeed these measures are the same as those that can be thought of when the company needs to be optimized to secure its resilience.

These levers are :

- reducing costs even though this lever might already been examined and might not offer further margins of improvements. Reducing inputs might affect productivity level at certain thresholds and should be examined carefully

- improving prices while continuing to develop the quality of their vines or wines and associate the marketing efforts to recognize the quality progress

- increasing other types of revenues: resorting to off-farm revenues (oenotourism for instance) or contracting for special programs (Payment for environmental services) or candidating for subsidies (agro-environmental measures)

- resorting to various risk management strategies.

Among standard risk management options are contracting or extending the areas covered by insurance policies. An important diversity of insurance policies exist and these differ according countries : per crop or per farm insurance, multi risk or specific risks (e.g. hail or multirisk in France); index based insurance etc..

Other risk management strategies are self-insurance (being able to set aside a certain capital in case of bad harvest/year).

At policy or sectorial level strategies such as the "compensation volume" in France "volume de compensation individuel" are options to put aside some extra volume produced in year N to cover the risk of lesser volumes in a later year.

[to be completed]

Author : Nina Graveline


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