Risk management in wine industry: A review of the literature

Abstract

Wine industry is characterized by high added value, particularly for some segments. The quality of the final product is the result of the right combination of many variables which involve the choice of the suitable wine grape varieties to particular conditions of site location, soil, climate, landscape together with entrepreneurial right decisions in management. The globalization of the market with the increasing of competition among producers and the evidences of climate change, that has different effects on the vitivinicultural areas in the world, have led to the growth of frequency and intensity of risks that winegrowers have to cope with. Their behaviour and reactions in managing risky situations of different nature, often adopting instruments they are not familiar with, as insurance or derivatives, could result in relevant consequences on prices, costs of production, revenues and profits, in other words, on the value chain of the wine production. This paper aims to provide a general overview of the economic literature on risk management in the wine industry.