Climate Change Is Coming for the $3.6 Billion Cognac Business

Since at least the 15th century, the gentle hills of the Cognac region in southwestern France have been planted with the Ugni Blanc vine, which yields an acidic, yellowish-white grape. Every autumn the fruit is picked, dumped into vats, mashed, and turned into an insipid wine that few would have any interest in drinking. Instead, the wine is boiled and distilled into a liquor called brouillis. After a second distillation, the liquid is poured into barrels made of oak from nearby forests, to emerge anywhere from 2 to 200 years later as the brandy known globally as cognac.

Climate change threatens all that. Warmer summers and longer growing seasons mean the grapes get sweeter and less acidic on the vine, which dramatically changes the character of the wine, and thus the cognac it makes. Earlier harvests can mitigate the damage, but a single superhot stretch of summer weather can ruin a vintage, endangering what has grown into a $3.6 billion-a-year business for distilling giants Pernod Ricard, LVMH, and Rémy Cointreau, and scores of smaller houses. And European Union provenance laws mean producers can’t simply move to higher—and cooler—ground outside the region and still call the harvest cognac. “What we’ve been doing for centuries will no longer be possible 50 years from now,” says Pierre Joncourt, director of operations at Martell Cognac, founded in 1715 and today owned by Pernod Ricard SA. “We need to adapt.”