After learning about biodynamic and organic methods, and Ivo's presentation, I could not imagine drinking anything else. This was how grapes should be grown. This was how wine should be made. However, even as I was emotionally sold on the concept, the hard numbers from the reading kept jumping back at me. Although conformity to biodynamic practices increased operational costs by at least 20%, wineries could only increase prices by about 11%. Being known as organic had such a negative influence on price that most wineries do not have it on their labels, even as they continue to use organic methods. Given the poor economic case for making biodynamic or organic wine, it just boggled my mind that wineries would continue such practices.
We spoke briefly about this paradox in class. The general consensus was that biodynamic and organic methods preserved the quality of the land and would appeal to long-term investors, particularly family businesses. However, while the argument made sense, discussion was brief and we did not seem to have more than anecdotal evidence and clear justification. In the Long Run, we are all dead, so why live with poor unit economics today?
I was curious and found this study on the Californian wine industry. According to the report, whether a vineyard was simply family-owned or not was not a significant predictor of its sustainable practices. The most important predictor was if the vineyard was family-owned and its owners intended to pass the vineyard on to their heirs. The older the vineyard, the more pronounced the effect. The hope and possibility of inter-generational transfer appears to indeed activate our willingness to make sacrifices in short run profitability so that our children and our children's children can continue to reap the benefits from healthy land.
In the Long Run we are all dead, but our children live on! If only more people felt this way in other sectors.
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