Across the rolling fields and sun-baked hilltops of California‘s world-famous wine country, an economic crisis is unfolding.
You might not know it as you browse through bottles in your supermarket or liquor store. But amid changing demographics and a cultural shift towards healthier lifestyles, Americans are drinking less wine — with brutal consequences for winemakers.
The signs are visible throughout the Napa and Sonoma valleys: Pile upon pile of dead grapevines, ripped out of the ground and waiting to be burned; a huge production plant standing seemingly empty; a quaint upscale tasting salon locked and vacant, with a “we’ve moved!” notice by the door.
“I don’t want to be negative, but we are in probably the worst downturn the industry in California has ever seen,” Natalie Collins, president of the California Association of Winegrape Growers, told The Independent.
At its most basic, this is a simple mismatch of supply and demand. Soaring booze consumption during the pandemic led the U.S. wine industry — valued at around $323 billion last year — to jack up production and invest in extra facilities. Now that pattern has reversed, leaving many companies with more product than they can sell.
The reasons why we’re drinking less wine are more complicated. The displacement of hard-boozing baby boomers by cleaner-living Generation Z is one reason along with greater education about the effects of long-term drinking on our health.
President Donald Trump’s tariffs and consequent foreign boycotts, particularly in Canada, have also battered the industry’s bottom line — which was already threatened by wildfires and struggling to adjust to climate change.
“We see a lot of cyclical supply and demand. Every industry goes through it,” says Collins.
“But this one is really structural… we are getting hit by a million different things at once, and this really has been the perfect storm.”
And that storm has made landfall. Since the start of this year, five industry giants have announced they would shut down facilities or layoff workers.
Two prestigious independent vineyards — Ernest and Margins — said they would cease making wine entirely.
In the upper Napa Valley, near the tiny hamlet of Zinfandel, Gallo — the world’s biggest wine producer by volume, which owns Barefoot and Carlo Rossi — said it will permanently close its Ranch Winery production facility, laying off 56 workers there and another 37 staff elsewhere.
The company said it had “made the difficult decision” to slim down its operation amid “evolving consumer demand”. Gallo’s PR team declined to answer further questions about the decision from The Independent.
About 25 miles southwest in Sonoma County, Jackson Family Wines said it had closed its Carneros Hills Winery production plant. A spokesperson told The Independent that it served as an “overflow production capacity” and was “not tied to any specific brand.”
“The site had become underutilized, and we consolidated operations accordingly. Thirteen roles were impacted, which is always the hardest part of decisions like this,” the spokesperson said.
Foley Family Wines & Spirits closed a similar production site further down the coast in Soledad, Monterey County, laying off the entire winemaking staff. Wine, beer and spirits conglomerate Constellation, is reportedly shutting down its Mission Bell Winery plant in the Central Valley near Fresno, laying off roughly 200 people.
The Boisset Collection, a Franco-American winemaking empire known for its luxury events and flamboyantly-appointed tasting rooms, closed down two such parlors in the wine-country towns of Napa and Yountville.
Boisset, Foley, and Constellation did not respond to requests for comment.
And that’s the winemakers that have made headlines. Smaller vineyards and artisanal mom-and-pop winemakers, of which there are hundreds in California, are exempt from state job loss reporting regulations, meaning that the true scale of the situation may be much worse.
Modern winemaking spans a complex network of specialized providers. Dedicated grape growers sell fruit to production facilities like Carneros Hills, which in turn may rent out their equipment to order (known as “custom crush”). Some are owned by big companies which can absorb shocks; others are independent.
Today every part of that network is under stress. U.S. wine sales in 2025 declined by 1.6 percent in dollar terms compared to 2024, according to Silicon Valley Bank. Sonoma County Winegrowers, a trade association, estimates that roughly 30 percent of the county’s grapes went unsold last year.
Nor is the problem limited to Napa and Sonoma. “It’s New York and the Finger Lakes region. It’s Virginia. It’s all the regions in California,” Jessie Vallery, executive director of the Alexander Valley Winegrowers Association in Sonoma County and a 25-year wine industry veteran, told The Independent.
‘They grew too big, and planted too much’
For decades, wine was booming — particularly in California, which produced 87 percent of all U.S. wine in 2024, according to Wine Business Analytics.
According to Yount Mill Vineyards president Kendall Hoxsey-Onysko, whose family owns three wine labels and a custom crush facility, the famous 1976 “Judgement of Paris” — in which Napa wines beat French ones in a blind taste test — set off a gold rush that swelled the price of Napa County land to up to half a million dollars per acre at the extreme high end.
Soon many California wine regions had become tourist hubs, drawing visitors from around the world for tasting courses and tours. Napa specialized in high-end luxury wines, with collectors driving the price of some bottles to thousands of dollars, while neighboring Sonoma County earned a more laid-back reputation.
“It’s just taken over everything. There’s nothing but grapes in this entire valley,” Nick, a 51-year-old gardener in Zinfandel who grew up in Napa, told The Independent (he declined to give his last name).
“They used to grow all kinds of stuff up here. Wheat, and walnuts, and they’d have chickens… [people] made all that money in the dotcom thing in the Nineties, and a ton of that came up here.”
He adds that the area used to be more “working class”, until big companies “gobbled up” much of the local land to cash in on the boom.
“They grew too big, and planted too much,” Nick said.
By 2019, there were worrying trends in the market. But Covid-19 and its aftermath swamped everything, as stimulus checks plus the intense stress of surviving a global pandemic drove demand skyward.
“I mean, I saw it,” recalls Vallery. “My husband was working at a restaurant in 2021, and I was helping him bartend. And it was insanity how many people were piling into that place on a daily basis… everyone was drinking tons. I’d never seen anything like it, ever.”
The wine industry scrambled to meet this demand with new investments and expansions. Hoxsey-Onysko describes an “explosion” of new market entrants vying to establish their own labels.
Some labels even relied on others to grow the grapes, make the wine, and distribute it — contributing nothing but funding and branding. Or, as Nick puts it: “The vision. The story. Whatever.”
But as the pandemic receded, those long-term problems began to reassert themselves. Chief among them: the baby boomer generation who formed winemakers’ core clientele is gradually passing into history, and younger generations simply don’t drink as much.
There are many possible reasons. Millennials have less disposable income than boomers did because they’re having children later, Hoxsey-Onysko suggests. Gen Z value inclusivity and prefer to frequent places that offer alcohol-free options for their sober friends, Vallery says.
In general, Vallery adds, America is on a health kick. “People are noticing they should be eating less processed foods. They’re noticing they should be drinking less booze. They’re going outside more, and they’re not having meetings at bars.”
Natalie Collins also cites the rise of GLP-1 agonists such as Ozempic, which some studies suggest can lessen alcohol cravings, as well as a glut of cheap imports that U.S. winemakers often use in low-end blended wines.
And while an optimist might think that Trump’s tariffs would help, a recent report by The Los Angeles Times described how they have increased the price of components such as corks and labels. They’ve also helped spark a massive boycott of U.S. booze in Canada, the American wine industry’s biggest export market.
As of October 2025, U.S. wine exports had dropped by 30 percent versus the previous year due to “consumer backlash”, according to the Wine Institute, a trade group.
Meanwhile, with tourism down and economic gloom gathering, many people may be less able to afford the high price of transport, hotels, and days out in well-heeled destinations such as Napa.
‘What’s lost now might never come back’
From the cluttered front deck of Stephanie’s brightly-decorated trailer home in Sonoma County, vineyards are most of what’s visible for miles around.
The 23-year-old massage therapist lives with her family and several dogs just down the road from the Carneros Hills facility. It’s been a “struggle” for all of them, she said.
“In general, jobs have been really low,” Stephanie told The Independent (she declined to give her last name). “Sales have been down. At least my age, people I go out with, we’re not drinking much.” Why? “I’m not sure. Maybe we just started earlier, so we’re tired of it. It’s also expensive.”
Almost every job here depends on the wine industry in some way. Stephanie’s father, a winery foreman, has had to cut his hiring in half even as his own hours get reduced.
Stephanie also alleges that some workers haven’t received their proper pay — often undocumented people who fear being detained and deported if they complain.
Some vineyards are up for sale, while survivors are still struggling to shift unsold inventory.
That has led many growers to tear their vines out of the ground and leave their fields fallow. This is a natural part of the farming cycle, and is always necessary every two or three decades. But that so many farmers are doing so now speaks volumes, and Collins says more than 100,000 acres of vines have been removed over the past two years.
“Every business operation in this entire industry — even an industry supply company, somebody that does tractors — everyone is having to make very challenging decisions right now. Everyone is taking a hard look at what they’re able to cut,” said Collins.
The problem is global, she adds. “In Europe, you’re seeing a lot of governments actually pay wineries to either dump wine down the drain or to turn [their] alcohol into hand sanitizer,” she said.
“Any kind of opportunity to bring down the amount of bulk wine that is going unsold.”
As with vine replanting, many within the industry believe this crisis offers an opportunity for winemakers to reset their methods, experiment with new technology and take stock of their priorities.
“Wine has been around for 8,000 years; it’s not gonna go anywhere,” said Hoxsey-Onysko. “We’ve had 30-plus years of amazing growth in the wine industry. Everything has to go through cycles.”
At one of Boisset’s former tasting salons in the city of Napa, once known as Chateau Buena Vista, new operators have already moved in. “It seems like downtown is booming,” Madeline Nossiter, operations director at what is now the Flora Springs Wine Lounge, told The Independent.
Her team is working on lower-alcohol drinks and wine-based cocktails (plus posh chocolates) to attract and “educate” younger generations. “People are loving what we’re doing,” she said.
Collins, too, is ultimately optimistic. Still, she’s worried about what may be lost in a region where much of the economy is interwoven with grape vines — and where the up-front cost of planting a vineyard is so high that some fields won’t be repopulated.
“It’s not just the job loss,” she said. “It’s the contributions back to that county’s general plan. It’s the local taxes. We’re starting to see it in communities. I live in the [inland] Lodi region, that’s where my home is. And I see it in things like the local boys’ and girls’ club; in the local nonprofits; things that wineries and vineyards and growers used to contribute to.
“There’s a lot to lose right now, and a lot that, once lost, might not come back.”
Source: independent.co.uk