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Answering the Agroecological Transition Challenges in Viticulture: VitiREV Terradev PE Fund

23 April 2023

Transition Pathways of Agroecological Innovation

by Eric Gaillat & Théophile Pasquier and translated by Nathalie Parent Dumoulin, Founder, NEXT EDITION

The productivist agricultural system using numerous chemical inputs (pesticides and fertilizers) has led to several drawbacks, such as biodiversity loss, climate change, erosion and pollution of air and water.

Agroecology is an evolving approach to transforming existing agricultural production systems to make them more sustainable and environmentally friendly. This agroecological transition presents various challenges that contribute to sustaining and improving the resilience of farming models to climate and health hazards while meeting consumer demand.

As such, implementing agroecological practices helps preserve biodiversity by encouraging the presence of various animal and plant species, which contribute to pollination, pest regulation and soil fertility.

Limiting the use of chemical inputs also reduces health risks for farmers and consumers while improving soil and groundwater quality. In addition, by promoting crop diversification, farms are better prepared for the increased climatic hazards of recent years.

The improvement of soil quality and agricultural production, combined with the reduction of costs linked to the use of chemical inputs, should, in the medium term, promote the economic profitability of farms undertaking this transition.

These issues linked to the agroecological shift are particularly salient in the winegrowing sector, a national flagship that has shaped our territories and forged our culture, especially in the Nouvelle-Aquitaine region.

The VitiREV Terradev Fund Strategy

Although the agroecological transition creates value in the medium term, it automatically leads to a drop in yields and increased farm production costs as the model shifts. Moreover, the decrease in productivity linked to the cessation of chemical inputs is combined with more regular tillage, implying an increased use of labour and significant material investments. Also, the shifting of cultivation systems is carried out in a constrained time context, particularly in the compulsory duration of certifications such as the organic label (min. of 3 years, but 4 years on average).

Thus, winemakers must solve the tricky equation of meeting the growing consumer demands for more natural and high-quality viticulture while reducing production costs. Once completed, the agroecological transition generates levers of growth and the creation of economic value for the winegrowing estates and the investors at the initiative of this evolution.

The VitiREV Terradev PE fund aims to finance and accelerate this transition. Operated by Calao Finance, a management company licensed by the French Financial Markets Authority, this industry-oriented fund is part of the VitiREV program coordinated by the Nouvelle-Aquitaine Region, winner of the France 2030 “Territoires d’innovation” initial call for tenders and driven by the Banque des Territoires on behalf of the French government. VitiREV units 130 partners – winegrowing professionals and associations – around a shared objective of generalizing an environmentally-friendly winegrowing model.

The VitiREV Terradev fund is dedicated to financing the agroecological transition of Nouvelle-Aquitaine’s wine-producing farms. It aims to initiate or accelerate their shift to more sustainable agroecological viticulture.

This innovative fund combines a financial approach with social and environmental objectives, creating economic value while meeting the needs of the agroecological transition.

VitiREV Terradev Sustainability Criteria

As an alternative investment fund reserved for professional investors, the VitiREV Terradev PE fund has a distinctive approach, combining financial and societal objectives chosen by the fund managers. In addition, the supported winegrowing companies must comply with five sustainable development goals determined by the United Nations (SDG 3/6/12/13/15).

GOOD HEALTH AND WELL-BEING: To reduce the exposure of winegrowers and/or residents to pesticides while preserving the quality of the final product through traceability.

CLEAN WATER AND SANITATION: To reduce water consumption and improve wine effluent treatment.

RESPONSIBLE CONSUMPTION AND PRODUCTION: To reduce chemical inputs, use biomass better and improve recycling and waste treatment.

CLIMATE ACTION: To reduce the carbon footprint and vulnerability to climate change by using more resistant grape varieties.

LIFE ON LAND: To promote greater ecosystem biodiversity based on a pre-assessment of the conservation trends and status according to the established criteria.

Support for Winegrowers

Winegrowers supported by the VitiREV Terradev PE fund also benefit from the expertise of a network of professionals within the VitiREV program to set up or continue the agroecological transition process of their vineyard. They can also benefit from the latest viticultural technologies.

Paired with an enhanced promotion of the estate’s brand image or even a diversification of the existing distribution networks, the expertise provided aims to boost the marketing of the production. The VitiREV Terradev PE fund is also a financing tool contributing to the success of cross-generational transitions, a particularly topical issue within the industry.

Furthermore, by strengthening equity and consolidating the financial structure of the operation, the fund promotes and facilitates access to additional bank financing.

Introductory video of the VitiREV Terradev PE fund (in French): https://www.youtube.com/watch?v=QpqZAoodsGw 

Calao Finance 

The management team comprises private equity professionals with more than 12 years of experience in various fields of activity, adopting an investment and entrepreneurial approach. In addition, our organization has recently set up a secondary office in Bordeaux to facilitate sourcing and investment monitoring. Théophile Pasquier, our on-site account manager, is dedicated to managing the fund and monitoring its investments. The team will soon expand with the arrival of a second account manager to develop the fund further. 

Additionally, two renowned experts in the Nouvelle-Aquitaine region wine industry, Jean-Baptiste Bourotte and Bertrand Weisgerber, support our management team. Jean-Baptiste Bourotte, owner of four estates in the Nouvelle-Aquitaine region and a certified organic trading house active in exports, is a recognized passion driver of sustainable viticulture. He is a member of the Saint-Émilion Wine Council and a foreign trade advisor. Bertrand Weisgerber is an entrepreneur who has created numerous companies, notably in the Bordeaux region. As such, he developed the leading French software and mobile solutions dedicated to the wine and spirits industry (ID Systemes). He now devotes himself to the agroecological transition of his vineyard in Entre-deux-Mers (Château La Peyruche) in collaboration with the Syndicat professionnel des vignerons bio Nouvelle-Aquitaine.

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