Abstract
Background and goals Winegrape growers are expected to continue to face significant risks due to extreme weather events in many regions. The objective of this research was to develop a framework for evaluating the economic impacts of different strategies to manage risks associated with extreme heat in winegrape production.
Methods and key findings We developed a financial model to calculate the net present value of the flow of revenues and costs for establishing and producing winegrapes in California for selected risk management strategies. A survey was used to assess consumers’ willingness to accept wines that are produced in accordance with each management strategy. Overall, we found that in the presence of extreme heat events, economic returns to winegrape growers can improve with the selection of heat-tolerant cultivars and with the adoption of technologies designed to protect grapes from the sun.
Conclusion and significance Our research outlines the economic consequences of climate change adaptation strategies and sheds new light on the relative merits of different approaches. We also offer a framework that winegrape growers can use to evaluate a wide range of potential outcomes across new technologies, cultivars, and regions.
Introduction
Global average temperatures have risen by more than 1°C above pre-industrial levels (IPCC 2014). This warming trend has slowed the growth of agricultural productivity (Melillo et al. 2014, Ortiz-Bobea et al. 2021) and makes agriculture increasingly vulnerable to higher temperatures (Liang et al. 2017, Ortiz-Bobea et al. 2018). Consequently, there is a pressing need to better prepare producers of both annual and perennial crops for climate change. Climate volatility is disrupting winegrape production, bringing unpredictable challenges to grapegrowers worldwide through dramatic climate variability. Extreme temperatures, unpredictable rainfall, destructive hailstorms, declining groundwater quantity and quality, and rising soil salinity create significant year-to-year uncertainty in vine management. There is clearly a need to identify management practices that limit losses from extreme temperatures and other climate stressors in the winegrape industry. Additionally, researchers have been selecting and/or developing cultivars that are better suited to the changing climate, while also selecting for traits that are important to growers, processors, and consumers (Duchêne et al. 2010). However, the potential for widespread adoption of improved cultivars may be limited, given strong consumer and producer preferences for existing Vitis vinifera cultivars (Espinoza et al. 2018, Vecchio et al. 2022, Zuniga et al. 2024).
In many grapegrowing regions, extreme temperatures can lead to issues that reduce both yields and fruit quality. Prolonged heat waves can restrict berry growth, reducing vine yield. There is no standardized heat-stress analog to growing degree days or chilling hours that has been used to study the expected damage of heat on grape yields or quality, primarily because the thresholds differ for different processes (temperatures above 30°C lead to reduced photosynthesis, above 35°C leads to a degradation of phenolics, and above 40°C leads to cellular damage and sunburn risk). Fruit composition is affected by increased malic acid respiration and reduced sugar accumulation, as well as by degradation of anthocyanins, the pigments responsible for the red color of red wines (Bergqvist et al. 2001). Sunburn occurs in fruit when high temperatures are coupled with high light exposure, generating photooxidative damage (Chen et al. 2008), while berry shriveling can occur under high temperatures when water is limited (Deloire et al. 2021).
In this research, we focused our efforts on understanding the economic impacts of producer strategies for adapting to temperature extremes in winegrape production. We considered the changes in both costs and revenues in winegrape production for three adaptation strategies: i) adoption of infrastructure technologies that provide sunshade cover for the crop, ii) selection of new heat-tolerant cultivars, and iii) migration to a region with a more favorable climate. These strategies have been discussed by industry stakeholders (e.g., Avila 2023) as well as by viticulturists (e.g., van Leeuwen et al. 2024), economists (e.g., Ashenfelter and Storchmann 2016, Masset and Weisskopf 2024), and policy makers, yet the financial implications of adaptation approaches for growers are not well-documented. The consequences for these three climate adaptation strategies are expected to be more complicated for winegrape growers than for other perennial fruit growers: there are idiosyncrasies in the winegrape (and wine) market, whereby final consumers are more familiar with existing cultivars and existing production regions. Changes to cultivar, region, and/or typicity have the capacity to affect prices for final wine products and therefore, to affect prices and revenues for the winegrapes themselves. We considered these potential effects on prices in our analysis.
Materials and Methods
We developed a framework to assess the three adaptation strategies for Cabernet Sauvignon grapegrowers in Napa County, under a range of plausible climate scenarios. A net present value (NPV) framework was used to account for the flow of revenues and costs to produce 1 ha of winegrapes. We also developed a survey that was distributed to consumers to understand how the adaptation strategies might affect their willingness-to-pay (WTP) for the wines produced in each scenario.
The first strategy was the use of shade cloth as one type of infrastructure technology (in the existing region with the existing cultivar). Shade cloth is installed above the vine or on the south side of the canopy to protect the grapes from direct sunlight (Marigliano et al. 2022), resulting in a reduction in fruit temperature of ~3.5°C (Martínez-Lüscher et al. 2017). During excessive heat events, shade cloth can have an even greater impact. Cabernet Sauvignon clusters have been reported to reach temperatures as great as 58.0°C in untreated controls, while shade cloth has reduced the cluster temperature to 47.7°C (Marigliano et al. 2022). The per-hectare cost of sunshade equipment ranges widely depending on the style used and labor requirements needed for installation, and it has been reported that this technology can lead to improved fruit quality in the presence of extreme temperatures (Avila 2023). Some materials need to be maintained and replaced regularly (approximately every 6 yr) with this technology.
The second strategy was the selection of an alternative cultivar (in the same region, without the use of shade cloth) that has the capacity to withstand higher average summertime temperatures (Masset and Weisskopf 2024). The optimal average growing temperatures across various V. vinifera grape cultivars have been categorized based on their perception of quality (Jones et al. 2005). Grenache, Carignane, Zinfandel, and Nebbiolo are the cultivars with the greatest capacity to be produced in a warmer climate while meeting expectations for typicity (Jones et al. 2012). In our analysis below, we specifically examined the case of adopting Carignane grapes as a potential substitute for Cabernet Sauvignon grapes in Napa County. The number of days per year that had maximum temperatures exceeding 35°C in Napa County are outlined (Supplemental Figure 1), and the relationship between the number of days exceeding 35°C and yields for Cabernet Sauvignon (Supplemental Figure 2) and Carignane (Supplemental Figure 3) grapes is shown. These figures highlight how yields for Cabernet Sauvignon grapes have been much more responsive to extreme heat than the yields from Carignane grapes in Napa County.
The third strategy was migration to a new region (producing the same cultivar and using the existing technology). In this scenario, we specifically examined a shift from Napa County to Lake County in California, growing Cabernet Sauvignon grapes. Lake County is geographically proximate to Napa County; while grapegrowing was common in Lake County prior to prohibition, it has only returned to a significant level in the last 20 to 30 yr (Alkon 2004). The relationship between the number of days exceeding 35°C and yields for Cabernet Sauvignon in Lake County is shown (Supplemental Figure 4), indicating that Cabernet Sauvignon grape yields have also responded to extreme temperatures in Lake County, and that Lake County has had fewer extreme temperature events than Napa County.
We considered four temperature scenarios in the results presented here; those that we modeled are not directly tied to historical weather patterns in California but rather are used to illustrate a range of plausible temperature scenarios in the future. Of the four, the two less extreme scenarios (labeled as mild and modest) most closely resemble patterns that have occurred in California over the past 30 yr, as shown in Supplemental Figure 1. However, the most extreme scenario that we considered is within the range of outcomes predicted by climate change models (e.g., Dettinger 2005).
In the first scenario, we assumed that there were no temperature events that affected crop yields over the 30-yr period. In the second, we assumed extreme weather events that cumulatively caused a 40% decrease in yield in years 5, 10, 15, 20, 25, and 30 for Cabernet Sauvignon in Napa County; yields were reduced by 20% in the same years for the treatment that used the sunshade technology. The extreme temperature events in this scenario are also assumed to reduce marketable yields for Carignane in Napa County and Cabernet Sauvignon in Lake County by 10% in the same years. In the third scenario, we assumed that modest temperature events (every 5 yr) would reduce yields for Cabernet Sauvignon in Napa County by 25% and by only 5% in the treatment that uses the shade technology. In this scenario, we also assumed that yields would fall by 10% for Carignane in Napa County and by 10% for Cabernet Sauvignon in Lake County. In the final scenario, we assumed mild temperature events that reduced yields by 10% for Cabernet Sauvignon in Napa County, and by 5% for Carignane in Napa County, Cabernet Sauvignon in Lake County, and Cabernet Sauvignon grapes protected by sunshade in Napa County.
NPV analysis
The University of California Cooperative Extension has published several Cost of Production Studies that provide detailed examinations of the yields, prices (and therefore revenues), and costs for several winegrape cultivars in various regions within California. Information from two studies (McGourty et al. 2008, Kurtural et al. 2020) was used to evaluate the flow of revenues and costs to produce Cabernet Sauvignon grapes in Napa and Lake Counties, as well as Carignane grapes in Napa County. When considering the adaptation strategy that adopts sunshade technologies, we included additional cost details (establishment and maintenance costs) in our analysis. In our results below, we calculated the NPV for the stream of annual profits generated per hectare in each scenario,
where Ri represents the revenues per hectare (price per 1000 kg × 1000 kg per ha) in time period i, Ci represents the costs per hectare in time period i, r is the discount rate (set equal to 5% in our analysis), and n represents the total number of years that the vineyard will be used to produce winegrapes. The variable Initial Investment0 represents the up-front per-hectare costs that are required to establish a vineyard (including but not limited to the vines, trellis system, irrigation materials, and labor costs needed to set up a vineyard). Of the key parameters used in the NPV analysis, prices (and revenues per hectare, in the absence of extreme temperature events) are highest for Cabernet Sauvignon in Napa County; yields are highest for Carignane, which helps make up for the lower price per 1000 kg; and costs are lower for establishing and producing winegrapes in Lake County (Table 1).
Key parameters used to assess the economics of three strategies used for adapting winegrape production to temperature extremes.
Consumer survey
The revenue calculated in each scenario in the NPV analysis depends on yields and prices. Climate changes that lead to extreme temperature, precipitation, and/or other weather events will affect vine yields. We expected that adaptation strategies would have the capacity to affect winegrape prices, especially when the strategies alter the cultivars and/or the region of production. To better understand these potential changes in winegrape prices, we developed a survey with treatments designed to elicit consumer responses to each of our adaptation strategies; this was done with and without information to consumers that highlighted the benefits of a given adaptation strategy. The WTP information collected from the survey was subsequently used to calculate price premiums for each adaption strategy, and the price premiums were applied to the reported winegrape prices published for each cultivar in each region.
The survey was distributed via Prolific to 308 participants in the United States in early 2024, after obtaining IRB approval from our university. For data quality reasons, some observations were not included, resulting in 303 usable responses. The survey was comprised of three blocks (six scenarios), each including a control condition and a treatment for each management strategy (adoption, selection, and migration). In each case, the treatment provided additional text highlighting how the management strategy would reduce the stress from heat and improve the wine quality. The survey utilized a within-subject design where each participant was exposed to all three blocks in a randomized order. Participants were first presented with general information about the survey, including a slide about consent and a slide that encouraged sensible responses (via “cheap talk”). The second part of the survey asked the WTP questions in the three blocks, and the final part asked a series of questions about sociodemographic details and general purchase patterns. The survey ended with a question that served as a wine knowledge test. Additional details describing the survey are provided (Supplemental Material).
Survey respondents were split nearly equally between male and female, were well distributed across the U.S., and the majority graduated from college (Table 2). Respondents included predominantly primary shoppers who reported to care about environmental issues and read labels on food products. Although relatively young (75% under 40-yr-old; this demographic has been reported to consume less wine than older age groups), the respondents performed reasonably well on the wine knowledge quiz included at the end of the survey (63% identified the correct answer).
Summary statistics from the consumer survey regarding strategies used for adapting winegrape production to temperature extremes (n = 303).
The average WTP for each of the six presented wine labels is shown (Table 2). The price premiums that consumers reported to have for each treatment were 17% (shade cover [adoption]), 12% (new cultivar [selection]), and ~11% (migration). Research has shown that consumer interest in paying premiums for environmental attributes diminishes over time (Carlson and Jaenicke 2016); in our analysis, we therefore assumed that these price premiums would exist for the first 5 yr of full production (years 5 to 9), before then returning to normal prices after that time in the NPV calculations.
The labels (front and back) used in our survey for the main control scenario plus the shade technology treatment, the second control condition plus the cultivar selection treatment, and the migration treatment are shown (Supplemental Figures 5 to 7). In each case, the price premium associated with the treatment (relative to its base) can be determined and used to calculate the effect of the treatment on winegrape prices that were applied to prices in years 5 to 9.
Results and Discussion
The NPV for each scenario under different climate conditions is shown (Figures 1 to 4). We first considered the scenario with no extreme temperature events over the 30-yr period (Figure 1), then considered scenarios with severe, modest, and mild effects of temperature on production yields. For purposes of clarity and exposition, we only modeled the effects of excess heat on yield (which could include a decrease in the quantity harvested or a reduction in the volume of fruit at a given quality). Future work could consider the effects of extreme heat more directly on both fruit quality and yield (Keller 2023), and more sophisticated models could use historical weather data to predict future temperature patterns that include an empirical distribution on expected temperatures each year.
Net present value results across the six strategies examined, with no weather events affecting yields.
Net present value results across the six strategies examined, with extreme weather events affecting yields.
Net present value results across the six strategies examined, with moderate weather events affecting yields.
Net present value results across the six strategies examined, with mild weather events affecting yields.
The baseline NPV results over the 30-yr period across the six scenarios are shown (Figure 1); here we assumed that there are no significant temperature events that affect yields. As might be expected, the NPV is highest for the production of Cabernet Sauvignon in Napa County without the use of the shade technology (given the additional cost to establish and maintain the sunshade technology). Our analysis of the technology treatment always included the price premium calculated from the survey results; scenarios without this price premium would yield less NPV relative to producing Cabernet Sauvignon in Napa County, given the high cost of the sunshade technology. The baseline results also show that NPVs are lowest for the scenarios producing Cabernet Sauvignon in Lake County. Figure 2 shows the NPV results when we assumed a significant impact to yield from extreme temperature events in years 5, 10, 15, 20, 25, and 30. In this scenario, we see that the NPV is highest for the treatment that selected the heat-tolerant cultivar Carignane in treatment 2 (assuming a price premium once consumers are told that Carignane is better suited to higher temperatures in Napa County). The second highest NPV is for the treatment that uses the shade technology, which included an initial establishment cost of $74,100/ha and additional maintenance costs of $12,350/ha every 6 yr. In this treatment, we included estimated costs for a more advanced shade technology; modeling the effects from a less expensive shade system (or assuming smaller yield losses with the advanced system) would improve the relative economic outcome for this treatment.
Two additional scenarios with modest and then mild temperature events were examined (Figures 3 and 4); in these cases, we expected that the yield losses would be less than what was modeled and illustrated in Figure 2. In this scenario, it is the shade technology that yields the highest NPV. In Figure 4, we assumed much more mild temperature shocks every 5 yr, and in this case, the highest NPV is for the baseline control condition of growing Cabernet Sauvignon in Napa County; lower NPVs were generated by other scenarios that adopted the shade technology, selected the heat-tolerant cultivar, or migrated. The second highest NPV was for the treatment that adopted the sunshade cover technology (Figure 4).
Conclusion
Overall, our results indicate that consumers find place more important than cultivar (Figure 1). Once subjects were informed that choice of cultivar or region could be ways to adapt to climate change, the NPV increased in both treatments, but the “selection” of a new cultivar had a much larger response. This is due in part to the fact that the revenues for the Carignane treatment are higher, given the higher yields associated with Carignane. Findings here also showcase that the best adaptation strategy to extreme heat depends on the severity of the temperature event and the relative reductions in yields (illustrated here as the effect of extreme heat events on yields in years 5, 10, 15, 20, 25, and 30). In the case of mild temperature effects, the optimal response may be to not adjust (or remain with the status quo); for modest temperature events, the sunshade cover strategy may financially be the best; for extreme temperature events, the decision to adopt heat-tolerant cultivars may be the optimal financial strategy. It should be noted however that our results for the treatments consider the premiums that we calculated from our survey results; if these premiums are smaller (or non-existent) in the marketplace, it will dampen the treatment results shown here.
Our framework could also be augmented and adopted by industry stakeholders to consider their own production and financial parameters, and to better assess the economic impacts of strategies used to mitigate the effects of extreme weather events in their vineyards. Stakeholders can enter prices, yields, and costs that are most reflective of their conditions to evaluate their financial implications (across technologies, cultivars, and regions that are available to them). More generally, both the framework and the results presented here will help winegrape growers and other interested stakeholders to navigate the potential effects of extreme weather events. Although the focus of this research is on winegrape production and grower decision-making, our results also have important implications for others along the supply chain, including technology providers, plant breeders, agricultural land owners, agricultural lenders, policy makers, and wine consumers.
CRediT Authorship Contributions
BR: Supervision, Writing – Original Draft; BR, YC, AS, and JV: Writing – Review & Editing; BR and AS: Project Administration; BR, AS, and JV: Conceptualization; YC: Data Curation, Formal Analysis
Supplemental Data
The following supplemental materials are available for this article in the Supplemental tab above:
Supplemental Figure 1 Number of days per year above 35°C in Napa County (Napa State Hospital).
Supplemental Figure 2 Napa County extreme heat days and Cabernet Sauvignon yields. Grape crush values were calculated using the total crushed quantity from the USDA California Grape Crush Reports (https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Crush/Reports/) and the total land area from the USDA California Grape Acreage Reports (https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Acreage/). The red line in the graph shows the estimated trend across observations.
Supplemental Figure 3 Napa County extreme heat days and Carignane yields. Grape crush values were calculated using the total crushed quantity from the USDA California Grape Crush Reports (https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Crush/Reports/) and the total land area from the USDA California Grape Acreage Reports (https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Acreage/). The red line in the graph shows the estimated trend across observations.
Supplemental Figure 4 Lake County extreme heat days and Cabernet Sauvignon yields (Lyons Valley). Grape crush values were calculated using the total crushed quantity from the USDA California Grape Crush Reports (https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Crush/Reports/) and the total land area from the USDA California Grape Acreage Reports (https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Acreage/). The red line in the graph shows the estimated trend across observations.
Supplemental Figure 5 Front and back labels used for the technology adoption treatment.
Supplemental Figure 6 Front and back labels used for the cultivar selection treatment.
Supplemental Figure 7 Front and back labels used for the migration treatment.
Supplemental Material Additional details about the methodological approach and data of this study.
Data Availability
The data underlying this study are available on request from the corresponding author.
Footnotes
The authors thank Julian Alston, Florine Livat, and Karl Storchmann for feedback on an earlier version of this work, as well as participants at the 2025 Annual Meeting of the American Association of Wine Economists in San Luis Obispo, CA. We are also grateful for helpful suggestions from two anonymous Journal reviewers.
Rickard BJ, Chang YP, Susskind AM and Vanden Heuvel JE. 2026. Economics of winegrape adaptation: Technology adoption, cultivar selection, or migration. Am J Enol Vitic 77:0770012. DOI: 10.5344/ajev.2026.25043
By downloading and/or receiving this article, you agree to the Disclaimer of Warranties and Liability. If you do not agree to the Disclaimers, do not download and/or accept this article.
- Received September 2025.
- Accepted March 2026.
- Published online June 2026
This is an open access article distributed under the CC BY 4.0 license.
References
Vol 77 Issue 1
Jump to section
Related Articles
Cited By...
More from this TOC section
Similar Articles
