Résumé
Purpose : The main objective 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 over the period 2003 to 2017 for the Valais region in Switzerland. The data allows us to obtain detailed data on harvested kilograms/litres and Oechsle/Brix degrees. It is then merged with precise meteorological data over the same sample period. We use this dataset to capture the climatic evolution and its impact on harvested quantities and quality. Finally, we build portfolios including different grape varieties to evaluate whether this reduces variations in quality and quantity over vintages. Findings : Our findings highlight that the climate 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. We 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 : The effect of climate change on viticulture is becoming increasingly important and felt and bears real economic and social consequences. Our 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. We thus propose a novel idea on how to mitigate climate risk.