Why California’s Wine Industry Is Being Crushed

Winery proprietor Stuart Spencer estimates that he near astir 50 tons of grapes to rot connected vines successful Lodi, Calif., past fall, arsenic harvesting and processing them would costs much than they were worth.

“We’re doing our champion to support our caput supra water,” said Spencer, nan proprietor of St. Amant Winery and executive head of nan Lodi Winegrape Commission.

Spencer blames a operation of factors: anemic demand, a worsening grape oversupply situation and an influx of inexpensive bulk imports flooding nan marketplace and collapsing California bulk vino prices. Tariffs person accrued nan costs of labels, capsules and corks and triggered a backlash from nan biggest world user of Californian wines, Canada.

Wineries of each sizes crossed California person started laying disconnected workers and shutting down accumulation accommodation to trim costs.

“People [are] having to look their equilibrium sheet,” said vino manufacture advisor Dale Stratton, who spent much than 30 years successful activity roles crossed Gallo Wines and Constellation Brands. The 2 companies — among nan largest U.S. vino producers — person announced sweeping layoffs recently.

At nan bosom of nan vino industry’s situation is simply a basal proviso and request problem: excessively galore grapes and not capable buyers.

Consumer request is shrinking because boomers — nan industry’s biggest fans — are aging retired of nan vino market. Younger generations portion little intoxicant successful wide and are little apt to take wine. The vino manufacture has mislaid drinkers to premium beers and spirits.

The Lodi Winegrape Commission’s Stuart Spencer walks past rows of shriveled grapes near connected a vineyard successful Lodi, Calif., connected March 25, 2024.

(Gina Ferazzi/Los Angeles Times)

California vino elephantine Gallo, nan shaper of Barefoot wines and nan largest supplier of vino successful nan U.S., notified nan authorities past period that its plans to lay off 93 group and adjacent a installation successful St. Helena. The aforesaid day, Santa Rosa-based Jackson Family Wines, champion known for its Kendall-Jackson Chardonnay, notified nan authorities that it would adjacent its Carneros Hills Winery successful April and laic disconnected 13 workers.

Alcoholic beverage behemoth Constellation Brands connected Feb. 3 notified nan authorities of plans to laic disconnected 212 workers astatine its Mission Bell Winery successful Madera. The publically traded company, which owns Robert Mondavi wines and Modelo and Corona beers, has group a extremity of $200 cardinal successful costs savings by 2028 and is shifting distant from vino to attraction much connected its increasing brew business, its financial filings show. Santa Rosa-headquartered Foley Family Wines & Spirits has besides coiled down operations astatine its Chalone Vineyard successful Monterey and laid disconnected nan full winemaking unit astatine Chalone, though it plans to support producing nan Chalone explanation vino enjoyed by Julia Child, nan San Francisco Chronicle reported.

It’s harder to support way of layoffs astatine mini wineries. California rule requires companies pinch much than 75 labor to springiness announcement of impending layoffs. But mini wineries are taxable to nan aforesaid economical pressures.

“We person had to fto spell much than a twelve group and removed hundreds of acres of vineyards,” 1 Paso Robles winery said successful a caller study connected U.S. vino exports from nan Wine Institute, a waste and acquisition group. “What concerns america astir is nan uncertainty.”

Winemaking successful California traces its roots to nan days of nan Spanish missions, erstwhile Father Junípero Serra cultivated European grapes for Communion and barter astatine Mission San Juan Capistrano.

As nan ngo strategy was dismantled successful nan 1830s, European immigrants purchased swaths of onshore crossed nan authorities — starting successful Southern California — and began producing vino commercially. The state’s vino business prospered during nan Gold Rush, which brought an influx of drinking men.

In 1920, Prohibition imposed a nationwide prohibition connected producing, transporting and trading alcoholic beverages and decimated nan American vino industry. A fewer wineries, including San Antonio Winery successful Los Angeles, survived Prohibition by producing sacramental wines for nan Catholic Church.

California’s vino industry, which was rebuilt successful nan aftermath of World War II, changeable to world prominence aft nan “Judgment of Paris” tasting successful 1976, wherever French experts successful a unsighted tasting classed California wines supra prestigious French bottles.

In nan decades that followed, California wines saw tremendous maturation owed to nan efforts of influential vintners specified arsenic Robert Mondavi, whose trading savvy helped move vino into a dinnertime staple crossed America.

Even arsenic user request began to plateau successful 2017, wineries stayed successful description mode, planting much vineyards and adding facilities. The pandemic played a domiciled successful warping nan vino industry’s request expectations, according to Danny Brager, a beverage intoxicant manufacture master and erstwhile elder vice president of marketplace investigation patient Nielsen’s beverage intoxicant practice.

With group staying location alternatively of spending connected luxuries specified arsenic concerts and travel, intoxicant income went up for astir 2 years, Brager said.

The uptick didn’t last.

Since past year, vintners that dangle connected exports, stuck successful nan mediate of President Trump’s waste and acquisition war, person recovered themselves nan target of a Canadian boycott of American alcohol.

The boycott, a consequence to tariffs imposed connected Canadian equipment by Trump, has dealt a rustle to California’s vino industry.

The Wine Institute, which represents California wineries, said successful a caller study that U.S. vino exports totaled $805 cardinal successful 2025, down 35% from 2024.

Boycotts imposed by respective Canadian provinces since past March person “erased” astir $360 cardinal successful gross that nan U.S. vino manufacture would person different earned, according to nan report.

“Family vino companies are fighting to past — this is not hyperbole,” 1 Lodi winery said successful nan report.

The Wine Institute has called connected Canada to extremity nan boycotts, contending that they person forced U.S. vino companies to laic disconnected Canadian income reps and different labor while depriving nan Canadian authorities of millions successful taxation revenue.

“It’s clip for each progressive to make resolving this rumor a privilege earlier much businesses are permanently harmed,” Wine Institute Chief Executive Steve Gross said successful nan report.

Wineries person recovered a sympathetic receptor successful Rep. Mike Thompson (D-St. Helena), who successful December introduced a measure that would usage payer dollars to reimburse American vino producers for nan money they person mislaid because of tariffs. The Specialty Crop and Wine Producer Tariff Relief Act has bipartisan support but faces a steep climb.

“California’s cultivation and vino organization are cornerstones of our section economies, from family farms to world-class producers,” Thompson said successful a connection successful December. “Ensuring they tin upwind abrupt tariff hikes isn’t conscionable an economical necessity, it’s a committedness to protecting nan livelihoods that make our territory and organization special.”

One large contributor to nan grape oversupply situation is that ample winemakers are progressively opting to import cheaper overseas bulk wines from Chile and Australia and blend them pinch American wines. (Blends that incorporate up to 25% overseas vino tin still beryllium marketed arsenic “American” wines.)

The believe has wounded mini California wineries, which utilized to trust connected bulk income to move excess wine.

While Lodi winery proprietor Spencer has managed to debar layoffs, galore independent grape growers, including those successful Lodi, haven’t been arsenic fortunate, shedding farmworkers and managers.

“Everybody is being very cautious correct now and under-processing pinch nan anticipation of not knowing wherever nan marketplace is going to be,” Spencer said.

That cautiousness was yet what led him to make a reliable determination to harvest less vino grapes than usual. Last fall, he opted to time off tons of grapes to rot connected nan vine.

Not each wineries are emotion nan crush evenly. In fact, immoderate are thriving, said Andrew Jones, nan laminitis of Field Recordings, a mini winery successful Paso Robles that registered beardown maturation successful gross past year.

“I for illustration wherever we’re astatine successful nan marketplace correct now,” Jones said.

Jones believes its mini size — 14 labor pinch an mean property of 29 — has helped it enactment nimble arsenic large names successful nan vino manufacture effort to upwind nan storm. His winery grows astir 10% of nan grapes it crushes and buys nan remainder.

His main demographic is young professionals ages 21 to 50. Jones said his customers for illustration acid-driven achromatic wines and chillable, lower-alcohol reddish wines, possibly because they grew up successful nan “sour candy generation,” dissimilar babe boomers and Gen Xers, who grew up eating cocoa and person a different palate.

Jones besides sees an opportunity to waste much bag-in-box wines — cartons containing 3 liters of vino meant to beryllium stored successful nan fridge erstwhile opened. Because they are lightweight, they extremity up being overmuch cheaper to vessel than solid bottles, he said.

“There’s a ton of opportunity retired there,” Jones said. “There’s still a batch of younger vino drinkers retired location that want to portion cool, younger, fresher wines.”