In addition to ongoing supply chain tensions, the global wine industry now faces seasonal labor shortages with higher wages. Tensions are especially high in regions that rely on international workforces, some of whom are unable to travel due to pandemic-related restrictions.
From January 2021 onwards until now, rates for contracted seasonal workers in New Zealand increased by 22% per vine, including Managed In Quarantine (MIQ) costs associated with the risk that activities like pruning may not be done in time.
“Each year, the wine industry draws on a substantial seasonal workforce to supplement our permanent workforce, and these skilled seasonal workers play a vital role in enabling the industry to meet the critical seasonal work peaks,” says Philip Gregan, CEO of New Zealand Winegrowers, the national organization for New Zealand’s grape and wine industry.
“The government announcement that RSE [Recognized Seasonal Employer] workers from Samoa, Tonga and Vanuatu can travel to New Zealand quarantine-free has provided some assurance for the industry to meet the coming seasonal tasks.”
Still, the availability of seasonal workers is a concern. To mitigate it, some New Zealand wineries have increased their number of full-time employees, with hourly rates 10% higher than the newly increased minimum wage of $16 an hour, even though, historically, there are more seasonal than year-round staff needs.
“New Zealand has certainly had labor challenges in the last few years with the impact of Covid-19 on travel restrictions and in general supply of international seasonal workers,” says Rob Cameron, Invivo cofounder and winemaker. “The viticulture sector has been extremely proactive in retaining seasonal workers to stay in New Zealand during this period through increases in wages and accommodation but obviously this does have a… effect.”
Smaller growers are especially affected by the evolving situation, as they tend to have less sway with labor contracting companies. In West Auckland, New Zealand, some struggled to complete pruning after a few wet days in September disrupted contractor schedules.
Other wine businesses create permanent roles to cover vineyard and winery tasks, rather than rely on seasonal workers at pruning or harvest. According to the 2021 Strategic Pays survey, updated in October 2021, recruitment for permanent staff remains active.
“There will always be the requirement to take on additional seasonal staff for our industry’s peak roles for a period of six to eight weeks, which cannot be absorbed by the permanent staff,” says Gregan. “We are working closely with the Ministry for Primary Industries and other government departments, to highlight careers available in the industry, and to ensure the New Zealand wine industry is an attractive option for Kiwis looking for training or career changes.”
However, vacancies cannot be filled by New Zealanders alone, given the tight employment market in many regions. “Hence, we continue to work with our regions, government and stakeholders to ensure that they are aware of these issues, and the impact labor shortages will have on our members and supporting industries if they are not able to attract the workforce they need,” says Gregan.
Additionally, there is more vineyard land being developed to accommodate rising global demands for New Zealand wine. From 2020 to 2021, vineyards increased by 1,262 hectares, or roughly 3,118 acres, and industry members expect that number to rise in 2022 and beyond. This presents an ongoing problem for employers facing staff shortages.
“Unless the government relaxes its stance on immigration, we will be in the same situation next year,” says Erica Crawford, founder of New Zealand-based Loveblock Wines.
Tensions are especially high in regions that rely on international workforces, some of whom are unable to travel due to pandemic-related restrictions.
Mechanization of vineyard processes can help since it dramatically lessens the number of workers needed. Wineries worldwide are experimenting with robotic pruning and software to identify disease, estimate yields, irrigate fields and more.
“The human pruner makes the important cutting decisions like which canes to keep,” says Crawford. “The machine then does the hard work: stripping. Human hands then wrap the canes down.”
As producers embrace technology, however, new challenges arise. Crawford worries about the loss of “human touch” and vine individuality in New Zealand. “We are a smaller estate and will try to stay with human hands as long as possible,” she says. “I believe we should address each vine thoughtfully. I suspect reality will force us to reconsider that position.”
Cameron agrees. “There is a risk that, with more technology-reliant viticulture, that more sensitive varieties and trickier sites may prove to be less favorable as investments in the coming years due to labor supply and a gap in mechanical management ability,” he says.
Alessandro Lunelli, CEO of Tenute Lunelli that has three wineries in Italy, spread across Trentino, Tuscany and Umbria, says that vineyard work in parts of Italy is more technological than it used to be as well. As a result, employers have to either invest in more training for workers or match the skillsets of available laborers with their own needs.
“The labor shortage may be because of protectionist politics, or it may be because of a lack of training or a mismatch of expertise,” says Lunelli. “Today, a vineyard worker who drives a tractor has to know how to use a tablet computer and a global positioning system. Pruning requires tremendous skill. Therefore we must invest in technology and training.”
Prateek Srivastava, CEO and cofounder of Terraview, a Spain-based operating system for the wine industry, believes that the biggest driver of labor challenges for the global wine industry is climate. Over the last few years, unpredictable weather that has made working conditions harder for workers, he says.
“From working in the fields to working in city jobs like retail or even mining, where either the working conditions are less hard or the pay is five times better,” he says. “Additionally, a large set of labor which used to traditionally work in the wine industry is ageing and the younger lot is overlooking working in wineries, creating a consistent supply obsolescence.”
California’s $43 billion wine business is also grappling with these issues. In recent years, it has endured wildfires, droughts, pest infestations, pandemic restrictions, labor shortages and more.
Stephanie J. Honig, Head of International Sales at Honig Vineyard and Winery in Napa, believes that the industry should either pay higher wages or work to mechanize operations in order to limit the number of employees needed. “People need to make a living wage, have health benefits for their families and a sustainable lifestyle,” she says.
Several California wineries hire contractors to battle the labor shortage issue. They do admit that with the outsourcing, the cost of picking definitely shoots up. “Everything is costing more—labor, grapes, glass, barrels, foils, etc.—and harvesting grapes is no different,” says Honig.
Mexico’s wine industry has been feeling the effects of these compounded issues as well. Château Camou, a winery in the country’s Guadalupe region, had to hire contractors to pick fruit since the harvest came on very suddenly, says Cofounder and CEO Fernando Favela. The winery was forced to hire contractors to harvest grapes, which Favela estimates raised the company’s harvest expenses 2–3%.
While the availability of seasonal laborers has always been a concern for agricultural businesses, ever since the pandemic started, forced seclusion and lack of mobility have wreaked havoc on wine businesses that depend heavily on migrant workers, says Favela.
“There is currently a dangerous shortage of low-cost labor for those tasks that require mainly skilled hand labor such as pruning during the harvest season,” he says. “With the threat of another wave of the pandemic at this moment, this problem will only get worse.”
Like in New Zealand, some Mexican wine companies have started to train locals and raise salaries for workers. Those changes may result in “raising the price of wine in the near future,” says Favela. “Coupled with climate change in 2021, it has all just made it a shorter year.”
Château Camou has only adjusted its number of full-time employees for inflation. “Mexico exports labor, so our problem is different here,” he says.
According to Srivastava, increasing full-time employees can be a short-term solution because it also elevates production costs, dropping margins in an already competitive economic environment.
The wine industry will always require some human labor, Srivastava says, but technology can alleviate labor costs in such a mercurial environment.
“The mission should be to build and provide tools for the labor to get three to four times more efficient,” says Srivastava. “We have to start accepting that the wine business will now operate with only one third of labor being available at two to three times the cost.”
Last Updated: May 8, 2023
