The wine industry is confronting a convergence of climate, economic and cultural pressures that are reshaping production and sales across the globe.
Sales decline and vine removal
U.S. wine sales have fallen more than 20% over the past 5 years, according to recent data. The decline has prompted some growers to uproot vines that can no longer be sold profitably.
Berryhill Family Vineyards owner Bill Berryhill described the situation as “sickening,” noting that a strong vintage this year will be discarded because of market weakness. He plans to cut vines on roughly 10% of his acreage after three consecutive loss-making years.
Daniel Berman, owner of Rincon Wine Group, called the downturn a “long overdue correction” after decades of expansion. He said such adjustments are “normal and healthy,” even though they are painful for producers.
Production cuts and financial strain
California, which supplies more than 80% of U.S. wine, saw its cultivated acreage drop to 510,000 acres for 2025, down from 590,000 acres, according to the USDA. The 2025 crush was the smallest since 1999.
Family-run winery Gundlach Bundschu, founded in 1858, filed for Chapter 11 bankruptcy after a costly land purchase in 2020. Larger producers such as Gallo and Constellation Brands announced layoffs earlier this year.
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Jeff Bitter, president of Allied Grape Growers, said the post-pandemic period has accelerated acreage reductions.
While the industry grapples with immediate financial stress, the underlying causes extend beyond domestic demand. Climate-related heat waves have already pushed French output toward a 70-year low, with 2026 forecasts at about 35 million hectoliters, roughly 14% below the five-year average.
Underlying drivers
Partner Filiberto Amati of Amati & Associates described the slowdown as both structural and cyclic. He noted that wine’s traditional consumption occasions offer limited growth avenues.
Amati highlighted two parallel challenges: climate change reducing yields and extending harvest windows, and geopolitical shocks raising transport and packaging costs. He cited higher oil prices and the loss of cheap glass bottle sources in China and Mexico as examples.
Competition from THC (tetrahydrocannabinol)- and CBD (cannabidiol)-infused drinks, functional beverages and non-alcoholic options is also diverting consumers. Berman added that younger buyers, facing tighter budgets, often view wine as a premium luxury above $25 per bottle.
