Wine Business Monthly Quotes Todd Friedman and Cody Gregg on Managing Catastrophic Risk in Wine Industry

Corporate attorneys Todd Friedman and Cody Gregg were quoted in Wine Business Monthly in an article titled “Catastrophic Risk Modeling: Consequences and Opportunities: Taking the proactive approach to wildfires, pandemics and unknown disruptions,” published June 2021. The article discusses the need to address “catastrophic risk management” in the wine industry to prepare for everything from pandemics to wildfires in the future.

In the past, managing risk for wineries and vineyards meant being prepared for issues such as vineyard heat stress, evolving OSHA regulation and ADA litigation. Current risk management entails making projections further into the future and focusing on the consequences of an event rather than the likelihood that it happens — many wineries have already done so in the past year with such actions as replacing lost revenue with proceeds from wine clubs, adjusting grape contracts, or dealing with smoke taint testing,

The events causing the biggest risks for wineries for the future, such as climate change and wildfires — and attendant smoke taint of grapes — will require insurers to create new language for risk modeling, though it may be difficult to assign metrics to the models. One example Friedman and Gregg note is the difficulty in developing a test to objectively measure smoke taint.

Friedman and Gregg point out that relationships between grape grower and winery govern much of how they do business, and they encourage personal interaction over confrontation in managing possibilities that are difficult to foresee. The bottom line, according to Friedman, is that “pointing fingers accomplishes nothing.”