Wholesalers in the wine industry warn that prices could be rising soon. The Trump administration’s tariffs have impacted both importers of foreign wines and wineries at home dealing with higher operating costs.

America's wine industry is grappling with one of its most painful downturns in decades as younger consumers cut back on drinking and baby boomers age out of the market — reshaping alcohol habits nationwide.

The trend has contributed to more than $1 billion in lost U.S. wine revenue last year and a roughly 6 million-case drop in production, according to industry data and reports.

Across California in particular, major producers and family-run wineries are shuttering facilities, laying off workers and even ripping vineyards out of the ground amid oversupply and falling demand, the New York Post recently reported.

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Jackson Family Wines ceased production at its Carneros Hill facility in Sonoma in February, resulting in 13 layoffs, while E&J Gallo shuttered its Ranch Winery in St. Helena and cut nearly 100 jobs across Napa and Sonoma counties.

Mission Bell Winery in Madera is set to close March 31, laying off more than 200 employees — while smaller producers such as Subject to Change Wine Company and Valley Farm Management have shut their doors as well.

America's wine industry is facing a sharp downturn as consumption trends shift. (Justin Sullivan/Getty Images)

The crisis extends beyond individual closures. 

The weakest-performing wineries saw sales fall by about 10% in 2025, while the top-performing group still managed to grow, according to Silicon Valley Bank's 2026 State of the U.S. Wine Industry Report.

California's total vineyard footprint was estimated at 477,475 acres in 2025, according to the California Association of Winegrape Growers, down from about 600,000 acres in recent years, based on earlier state estimates.

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At least 20% of California's wine grape production from bearing vines was not harvested and crushed in 2025, Forbes reported in November.

"It's a bloodbath for all grape growers across California," Stuart Spencer, executive director of the Lodi Wine Grape Commission, told Forbes. "It is the worst market condition growers have seen in their lifetime."

Younger consumers and aging baby boomers are reshaping alcohol habits, contributing to reduced wine demand today. (iStock)

Shifting drinking habits are largely to blame.

Older wine enthusiasts are aging out of the market and are not being replaced at the same rate by millennials and Gen Z, experts say.

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"The mid-20s to late-30s demographic has historically been a very important dining and drinking segment," Andrew Principe, a James Beard-recognized restaurateur and co-owner of Pulcinella in New Orleans, told Fox News Digital. 

"A significant slowdown of alcohol consumption within this group has been noticeable."

Health and wellness trends are influencing Americans to drink less alcohol, which is affecting wine sales nationwide. (iStock)

Broader cultural shifts are also reshaping behavior, he said.

A recent Gallup poll shows the share of U.S. adults who drink alcohol has fallen to 54%, the lowest level in decades. It reflects growing health concerns about even moderate drinking.

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"Younger generations are prioritizing health and wellness," Principe said. He added that guests are dining out less frequently and often ordering fewer courses and fewer drinks.

"Someone who may have ordered an appetizer, entrée and several glasses of wine may now only have one," he said.

Some California growers are removing vineyards as oversupply weighs on the market. (Tony Avelar/Bloomberg via Getty Images)

Principe said there's "emerging evidence" that GLP-1 medications may reduce cravings for alcohol, though he believes the broader change is behavioral.

GLP-1 drugs can help reduce alcohol consumption and cravings, research has shown. Experts caution that more data is needed to determine the broader impact that weight-loss drugs are having on the alcohol industry.

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Babak Hafezi, an adjunct professor of international business at American University who has worked with wineries in California and on the East Coast, told Fox News Digital he's not seen scientific data proving GLP-1 drugs are materially impacting wine consumption.

"This is not an industry recession but rather a demographic shift," Hafezi said, pointing to generational changes, competition from hard seltzers and THC-infused beverages, and a general decline in alcohol consumption.

Wineries are turning to direct-to-consumer sales and tasting room experiences to stay afloat. (iStock)

In addition to environmental issues, economic pressure and inflation, the downturn is also tied to a post-pandemic correction, experts say.

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Wine sales surged during COVID-19 lockdowns before beginning to decline again, contributing to excess inventory, according to reports.

"As the owner of two restaurants and a cocktail bar, I had hoped for a 'Roaring Twenties' after COVID, but that hasn't been the case," Principe said. "Like many in hospitality, we've had to adjust our strategies around alcohol as consumer habits continue to evolve."

Wineries are closing facilities and cutting jobs amid declining wine sales. (George Rose/Getty Images)

Survival may hinge on how quickly producers adapt, experts say.

"Wineries that pivot and add other vehicles to deliver their wines will be the winners," Hafezi said, emphasizing direct-to-consumer sales, wine clubs and tasting-room experiences.

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Principe also remains cautiously hopeful.

"I'd like to think this is a pendulum that will eventually swing back," he said.

Deirdre Bardolf is a lifestyle writer with Fox News Digital.

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