Freixenet, the world’s leading sparkling wine producer, is facing challenges due to a prolonged period of drought in Catalonia. The region has been experiencing extreme water shortages for almost three years, leading to the death of 30-year-old vines and withered grapes in important wine-growing areas like Penedès near Barcelona, where Freixenet is located. This has severely impacted the production of their famous Cava sparkling wine, the Spanish answer to Champagne.
In response to the crisis, Freixenet has applied for short-time work in Spain, with plans to temporarily lay off almost 80 percent of its workforce in order to preserve jobs and navigate through the challenging situation. The company’s request is based on “force majeure” and aims to ensure the company’s operations. The drought has caused a significant decline in grape harvest, leading to a decrease in production capacity by 30 percent.
Despite facing difficulties, Henkell Freixenet, the group that Freixenet is part of, reported record revenues in 2023. Market shares grew in certain regions, although sales in North America and Asia declined. The grape shortage caused by the drought in Spain has impacted cava production, with expectations of a loss of around 80 million bottles of Cava sparkling wine compared to the previous year’s harvest.
The company is exploring ways to mitigate the impact of the drought on its operations and is making efforts to adapt to the changing conditions in the industry. Overall, Freixenet is working to navigate through this challenging period and ensure the sustainability of its operations in response to the ongoing drought crisis.