Blast of the summer wine: English producers benefit from warmer climate
The renaissance of English wine shows no sign of stopping in 2024 as increasing temperatures create better growing conditions in the south of the country.
Turnover at the biggest producers of English wine has risen by 15 per cent in the last year and nearly three-fold in the past five years, according to accountancy group UHY Hacker Young.
More reliable weather and crop yields as a result of global warming has attracted capital into the sector from high profile (and deep-pocketed) investors like Michael Spencer and Nigel Wray, who both own stakes in Chapel Down.
The growth opportunities from this funding have allowed UK producers to expand operations: Last week, Chapel Down announced it had received permission for a £32m development in Cantebury, including a new winery.
Investment has been party driven by a “desire to diversify production away from areas where crop yields are being damaged by climate change”, James Simmonds, Partner at UHY Hacker Young, said.
“Traditional European vineyards are experiencing much hotter climates, with France in particular experiencing milder winters with sudden frosts that are killing off grape growth,” he added.
Global wine production fell by 9.6 per cent in 2023 year on year, according to the International Organisation of Vine and Wine (OIV).
The number of UK vineyards, in comparison, has boomed: it exceeded 1,000 for the first time last year, according to the Food Standards Agency. The number of bottles produced shot up to 22m bottles in 2023, from 13m in 2018.
The largest wine producers in England include Chapel Down, Denbies and Nyetimber.
Liquid holidays
It is notoriously difficult for wine producers to turn a profit. Many producers have turned to wine tourism as a lucrative side business: it is an “increasingly popular” way to boost turnover, Simmonds said.
“Some vineyards target younger audiences by offering customers hotel stays or even seasonal events that are catered to families as well as wine drinkers,” he added.
Gusbourne wines, for example, offers a overnight ‘wine experience‘ in partnership with a boutique hotel.
Denbies and Chapel Down, too, both offer high-end restaurants on site.
Wine tourism accounts for 25 per cent of wineries’ total income, according to a WineGB 2024 survey, with a 55 per cent increase in visitor numbers since 2022.
A flagging fine wine market
The impressive boost in turnover for English wine producers comes amid a struggling fine wine market: all major measures at fine wine marketplace Lix-ex recorded declines during the first half of 2024.
While trade volumes remained steady, trade value was down. Buyers and sellers are “still wondering where the bottom might lie,” Liv-ex said.
The index of the top 100 fine wines fell by 3.4 per cent, the company said, continuing the downward trend that started towards the end of 2022. It ended the first half of the year down 17.9 per cent from its September 2022 peak.