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Ten percent of the world's wine production is lost every year due to natural disasters. This is estimated by the Karlsruhe-based technology company Risklayer, which has developed a global risk index for wine regions. Risklayer CEO James Daniell explained the innovative approach to Markus Blaser.

In the week after Easter 2021, many vineyards in Europe are on fire again: not only in Burgundy, but also in Tuscany, vintners are heating their vines with barrel fires to protect the tender buds and shoots from freezing. In fact, frost is very often the main cause of severe crop losses, closely followed by hail. Earthquakes and volcanic eruptions, heat and forest fires as well as storms, heavy rain and floods are other natural hazards that threaten viticulture worldwide.

The extent of these risks in a wine-growing region can be seen at a glance with the help of the Winerisk Index: If you click on the dot for Bolzano in South Tyrol on the interactive map, for example, two green glasses appear for earthquakes, five yellow glasses for frost and eight red glasses for hail. The traffic light colours stand for low, medium and high risk, the number of glasses for the different factors that influence the risk there. They are summarised in the overall index of risk for Bolzano wine: Nine red glasses. In this easy-to-understand way, Risklayer shows the risk for places in over 7,500 wine-growing regions in 131 countries.

35,000 disaster data worldwide

The company is a spin-off of the Karlsruhe Institute of Technology (KIT). This is where the international and interdisciplinary research project for the Winerisk Index started a few years ago under the leadership of the Australian geophysicist James Daniell together with climate researchers, seismologists, engineers and scientists from other disciplines. "We have now collected more than 35,000 historical and current disaster data in our CatDat database," explains the current Risklayer CEO. "From this, it was possible to deduce quite quickly which disasters had already caused damage in viticulture in the past. From this we were able to develop our own disaster models." The researchers linked these individual data with geographical data on wine regions and cultivated grape varieties as well as information on production, turnover and invested capital. From this, they worked out their risk index using complex calculation models.

Risklayer's risk model is based on three components: The starting point is the risk of damage to grapes and wine, but also to vineyards, plants and buildings. Globally, we are talking about hundreds of billions of euros in annual production and invested capital. How high a potential loss can be also depends on its exposure. It also depends on how exposed the assets are to certain hazards. The probability of catastrophes occurring at a location also plays an important role. Only by evaluating all these elements can the potential damage and thus the risk be estimated.

Many probabilities, risks and conditions

"The index itself is very rough," Daniell points out. "However, when we estimate the risk for an individual farm, we take into account many specific conditions and details that can also change from year to year and thus strongly influence the risk. Such detailed calculations cannot be made for the whole world, though."

The general assessment must therefore be adapted to the conditions of the respective location. It is clear, for example, that winegrowers on Etna, which will erupt again at a certain point in time, are directly exposed to the threat of the volcano. Conversely, however, grape varieties such as Nerello Mascalese thrive particularly well on the young soils of volcanic rock. This is why wines full of character, even unique, are produced there. So the dance of the volcano certainly holds opportunities - and not just dangers, against which, moreover, one can arm oneself. Because the big, all-destroying catastrophe happens very rarely, while smaller natural events often cause damage only because of a lack of prevention. "You can do quite a lot against minor damage," Daniell knows, "such as fixing steel tanks, barrels and bottles, but also the use of nets against hail are quite inexpensive. It just takes the necessary information to be able to make the right decision on how best to use 1,000 or 5,000 euros to do it."

Suggestions for better protection against crop risks

The risk assessment provided by Risklayer - for example in the form of the expected average damage per year - serves as a basis for the winemaker's decision: do I want to accept the risk as it is, take out protection or take out insurance? "In addition, we can make suggestions for better protection and compare the necessary costs with the damage risk. But we do not deal with the concrete implementation of protection concepts for wineries or cellars," Daniell specifies his approach.

According to Daniell, the costs of the risk assessment by Risklayer depend strongly on the analysis effort: "An approximate estimate based on our data can be obtained for less than 1,000 euros, the detailed analysis of the exact locations of vineyards and buildings for the portfolio of a globally active winery, for example, costs significantly more." However, Risklayer does not only work as a data service provider for customers, but is also active in research projects together with organisations of the wine regions. The goal: Risklayer wants to publish a new version of the Winerisk Index on an even better data basis by 2023.

Climate change, which Daniell considers a risk in its own right, poses a particular challenge: According to his forecast, the temperature in southern Italy and southern Spain could rise by an average of two to three degrees. "But it is by no means certain that viticulture will be impossible there in a few decades," Daniell says optimistically. "Policymakers can mitigate climate change, winemakers can benefit from new varieties and growing methods." In general, the climate models can only localise in very general terms where things will get worse for viticulture and where they will get better: "In Germany, conditions for viticulture will very likely improve. Although heavy rain and hail events will tend to increase, the number of frost days will decrease. In any case, German Riesling is not threatened with extinction." This risk assessment by James Daniell should please many wine lovers.

Markus Blaser works as a freelance journalist and historian in Florence. The Swiss wrote for "Merum" until 2016 and publishes about the economic, political, cultural and historical background of wine and olive oil in Italy.

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