Nearly half (45%) of all businesses in the global wine sector are grappling with a labor shortage, according to studies conducted by the Geisenheim University for the "ProWein Business Report 2022" in 2021 and 2022.
Vineyard seasonal work most affected
Especially in the wine production segment, wineries (55%) felt the pinch the most, with smaller vineyards (48%) and cooperatives (47%) slightly less affected. Seasonal areas (63%) and the cellaring and bottling sections (51%) were particularly short-staffed. Labor shortages were less of an issue in distribution (25%), and there was hardly any staff deficit at the executive level (4%), which ties back to the typical structure of family-run businesses.
Restrictions due to COVID-19 hindered seasonal workers from entering countries like New Zealand. Birth rate declines in many countries resulted in fewer students seeking seasonal jobs. Additionally, working conditions for seasonal workers remain unattractive in countries like Germany, despite increased minimum wages. Beyond seasonal workers, wine producers often lack truck and forklift drivers, as these roles find more attractive job offers in other industries.
Shortage more pronounced in hospitality than in retail
Among sales channels, the hospitality sector (90%) and restaurants (66%) reported significant labor shortages. This can largely be attributed to COVID-induced closures, during which employees had to transition to other industries, finding more appealing work conditions and family-friendly schedules.
Importers, distributors, exporters, and specialized wine retailers are less affected. Typically, they have regular working hours, and the seasonal fluctuations are less pronounced, leading to long-term contracts. No comment was made on the grocery retail sector. However, insiders report a significant skills shortage after benefitting from industry switchers during the pandemic. Some attribute this shortage to the retailers' cost-cutting policies.
Impact on companies and employees
The most significant impact of the labor shortage was on the remaining employees, who had to work overtime (57%). 36% of businesses reported being hindered in growth and exploring new business opportunities. A quarter of businesses (About a third in the case of vineyards and hotels) were forced to outsource some operations, which decreased profit margins.
Possible solutions for the wine industry
46% of businesses expanded their search efforts. A third tried improving working conditions, though this was hampered by the increased workload. 25% raised salaries, but given the economic conditions, some faced limitations. Every fifth business attempted to address the shortage through more mechanization and digitization.
Looking ahead, 57% see increased mechanization as part of the solution. 71% believe that other sectors will remain more attractive, further exacerbating the wine industry's shortage. 54% anticipate relying on foreign labor in the future. Half of the respondents see the industry's low profitability as a barrier to attracting workers, for instance, by offering higher wages. However, 51% view wine's cultural significance as a potential draw for workers. A "green" image and sustainability were also mentioned as attractors. VM
