poor weather late in the year compounded market problems<\/a>.<\/p>\n\u201cWe had grapes that were under contract, that didn\u2019t get delivered due to the rot in the late season rains, trouble ripening, getting that fruit to 24\u201325 Brix was tough this year, and we saw a lot of (grape purchase) cancellations,\u201d Klier said. Degrees Brix is a measurement of sugar content in fruit.<\/p>\n
Still, he reported more interest in Sonoma County Cab in 2025 compared with 2024, a tentative signal that demand could stabilize as the 2026 season approaches.<\/p>\n
Chardonnay\u2019s trajectory has been more abrupt.<\/p>\n
\u201cI didn\u2019t care where it was at in Sonoma County, you could find a home for that fruit in \u201924,\u201d Klier said. \u201c(20)25 kind of flipped the switch on us.\u201d<\/p>\n
While some Chardonnay lots found buyers, many did not.<\/p>\n
\u201cChardonnay in the state of California really lost its momentum in \u201925,\u201d he said. He held out hope that Sonoma County\u2019s reputation for Chardonnay would turn the market around a little bit for the white grape this year.<\/p>\n
Pinot Noir, however, absorbed the sharpest blow.<\/p>\n
\u201cI would estimate that Pinot Noir, out of all varietals, have the most grapes left on the vine in \u201925 in Sonoma County,\u201d Klier said.<\/p>\n
He attributed the downturn to a decade-long buildup of supply across multiple regions, including Oregon.<\/p>\n
Because of that, he urged growers with high-cost or lower-quality vineyard blocks to consider change.<\/p>\n
\u201cIf you can\u2019t find a way to mechanize that and save your farming cost, you might want to start thinking about a different varietal grafting,\u201d Klier said.<\/p>\n
Buyer caution and the inventory trap<\/p>\n
Cuneo described a market defined by risk aversion.<\/p>\n
\u201cIf there\u2019s any sort of ambiguity about how your sales are going to perform over the next 12 months, everybody is really being very risk-averse,\u201d he said, adding that inventory is \u201csitting out on the bulk market or sitting out on the vine.\u201d<\/p>\n
Compounding the issue, many wineries are holding on to 2022 and 2023 vintages rather than clearing them at a loss.<\/p>\n
\u201cThese are working with that inventory to use it in-house, because there\u2019s not really a viable financial option to move it on the bulk market,\u201d he said.<\/p>\n
Against this backdrop, the brokers urged growers to prioritize relationships and timing.<\/p>\n
\u201cBeing a good partner to your wine partners right now is your best and safest bet to stay in contract,\u201d Klier said. Flexibility on price or terms may be necessary, as is early engagement.<\/p>\n
\u201cList early, and list often,\u201d he said. \u201cThe contracts we see early in the year are much better than the ones we see at the end of the year.\u201d<\/p>\n
Both brokers expressed cautious optimism that further vineyard acreage removals and disciplined winery production could bring balance by 2026 and recovery into 2027.<\/p>\n
\u201cWe do think that we bottomed out in \u201925,\u201d Klier said. The brokers say an aphorism circulating in the industry \u2014 \u201cSurvive in \u201825, fix in \u201826 and heaven in \u201827\u201d \u2014 could still prove true.<\/p>\n
Turrentine\u2019s view of a prolonged reset broadly aligns with a forecast released earlier this month by First Citizens Bank\u2019s Silicon Valley Bank wine division and an assessment by Ciatti Co. at the WIN Expo Trade Show & Conference last month.<\/p>\n
The SVB report said the U.S. wine sector remains in a multiyear demand correction, with the market expected to bottom out in 2027 or 2028 before returning to modest growth. Report author and division founder Rob McMillan cautioned that \u201cthis is not a cycle you can wait out.\u201d<\/p>\n
Wine within a contracting beverage landscape<\/p>\n
Moramarco, managing director of Sonoma-based BW 166 and Gomberg Fredrikson & Associates, highlighted how structural shifts extend well beyond vineyards.<\/p>\n
\u201cDomestic still wines are about 56% of all wine sales today,\u201d he said during his webinar Thursday. \u201cBack in 2018 they were 64%.\u201d The decline, he said, is being offset to a large degree by imported sparkling and flavored wines.<\/p>\n
Overall, shipments of domestic and imported still wines are projected to be down about 3%, with the sharpest pain in wines under $10. Higher-priced wines have fared better but remain under pressure.<\/p>\n
Using winery inventory data from the U.S. Trade & Tax Bureau and Bureau of Economic Analysis, he noted that in 2023, wineries held 20.3 months of inventory, compared to the average since 2003 of 18.3 months. While recent inventory figures suggest normalization, the path remains narrow, he said.<\/p>\n
Key metrics for California, which accounts for roughly 80% to 85% of U.S. winery inventory, illustrate the tension.<\/p>\n
The estimated 2025 crush of 2.25 million tons would be the lowest in over two and a half decades, he said. That tonnage resulted in an estimated 383 million gallons of wine, also the lowest in that period. Case exports, greatly impacted by the trade war with Canada, the top trading partner, are estimated at 15 million gallons, about half the annual trend.<\/p>\n
Yet year-end inventory for 2025 is estimated at 778 million gallons \u2014 only the second-lowest figure \u2014 yielding an estimated 18 months of inventory, slightly below the long-term average. Gallons per ton are estimated at 170, above the average of 165.<\/p>\n
Looking forward, Moramarco outlined three scenarios. If shipments remain flat and inventory returns to the historical average, the industry would need about 3.1 million tons of grapes annually \u2014 well below the 3.5 million\u20134 million ton peak seen six to eight years ago. If shipments decline 2% annually, grape needs would fall to about 2.75 million tons annually by 2030. A more bullish scenario would require 3.3 million\u20133.5 million tons, but Moramarco was skeptical.<\/p>\n
\u201cI\u2019m not certain we\u2019re going to see that again,\u201d he said.<\/p>\n
He also warned of near-term dislocations.<\/p>\n
\u201cA lot of growers, if they don\u2019t have contracts, they\u2019re not going to be able to get crop loans, and they aren\u2019t going to be able to farm,\u201d he said, raising the possibility of a paradoxical shortage if wineries need grapes later this season.<\/p>\n
Beer, cider and spirits: Parallel corrections<\/p>\n
Moramarco\u2019s analysis showed that wine\u2019s challenges are mirrored across the alcohol beverage spectrum. Beer shipments are projected to be down about 6% in 2025, with import beer \u2014 particularly from Mexico \u2014 seeing \u201ca significant decline.\u201d Cider, often ambiguously categorized, has experienced sharp swings, with domestic cider shipments showing a steep decline (down 41%) compared with 2024.<\/p>\n
Spirits, after years of expansion, are also expected to contract. Moramarco forecast \u201ctotal spirits down a couple percent,\u201d noting that ready-to-drink cocktails are flattening out after rapid growth. Imported tequila remains a relative bright spot, but overall the sector is returning to a \u201cnew normal.\u201d<\/p>\n
Consumer economics and health headwinds<\/p>\n
Underlying these trends are broader economic and social forces. Moramarco pointed to housing affordability as a key constraint.<\/p>\n
\u201cThe average house price has gone up about 250%, so even faster than the mean household income,\u201d he said, while new-car prices have risen roughly in line with income gains.<\/p>\n
The share of income required to buy an average house has climbed from about 28% to 36%, squeezing discretionary spending.<\/p>\n
Consumption patterns are also shifting. Weekly alcohol servings per legal-drinking-age adult have declined from about 15 in the early 1990s to about 13.5 in recent years. Health scrutiny is intensifying, including studies linking alcohol to disease.<\/p>\n
\u201cIf we don\u2019t want to see ourselves continuing to significantly decline, I think we have to get better at figuring out how to address these issues,\u201d Moramarco said.<\/p>\n
Can DTC bolster the fragile market?<\/p>\n
Vinoshipper\u2019s 2026 National Direct-to-Consumer Sales Report, released Jan. 16, provided a granular look at how wineries are navigating the present, based on survey data from 45 states and proprietary platform metrics.<\/p>\n
The overall DTC market in 2025 was described as \u201cflat, but fragile.\u201d Thirty-five percent of producers reported sales increases, with 5% indicating significant growth, while the largest share reported flat or declining results. Average order value dipped slightly to $136, down from $137 in 2024, marking the first decline since 2020. Price per liter, however, continued to rise to $37.55, reflecting premiumization even as customers purchased fewer bottles per order.<\/p>\n
Tasting rooms emerged as an even more important primary revenue driver for many wineries, particularly those producing under 1,000 cases. Wholesale distribution continued to decline in importance, while wine clubs and e-commerce gained strategic emphasis.<\/p>\n
\u201cClubs are generally the second-largest driver of sales, behind the tasting room,\u201d the report noted, and were \u201cthe key differentiator for wineries that reported their sales being up in 2025.\u201d<\/p>\n
The report stressed \u201cintentionality\u201d as a guiding principle.<\/p>\n
\u201c2026 is the year to operate with intention,\u201d it said.<\/p>\n
That means wineries must understand their own data, rather than chasing industry averages. Regulatory challenges loomed large in the report, with 70% of wineries saying regulations hinder growth. Technology investments \u2014 particularly point-of-sale systems and club management tools \u2014 were strongly correlated with better performance.<\/p>\n
During Vinoshipper\u2019s Jan. 16 webinar unpacking the report, executives echoed these themes. Taylor Harrison said roughly equal shares of wineries reporting gains, declines, and flat results. Premiumization remained a driver, even as units per order fell.<\/p>\n
\u201cThe wine that\u2019s being sold tends to be of a higher price,\u201d said Paul Swigger.<\/p>\n
Clubs and experiences have become more important with younger consumers and post-pandemic, they said.<\/p>\n
\u201cExclusive products saw a big increase,\u201d Swigger said, noting their role in club growth.<\/p>\n
Terra Jane Albee emphasized storytelling and differentiation.<\/p>\n
\u201cFind what makes your business unique and special and highlight it,\u201d she said.<\/p>\n
Jeff Quackenbush joined North Bay Business Journal in May 1999. He covers primarily wine, construction and real estate. Reach him at jeff@nbbj.news or 707-521-4256.<\/p>\n","protected":false},"excerpt":{"rendered":"California\u2019s wine industry has entered 2026 facing a convergence of pressures that few would have predicted a decade…\n","protected":false},"author":2,"featured_media":148670,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[1955,73744,7,9,8,73747,25955,73743,3938,3628,73745,44216,73746,3945,49915],"class_list":{"0":"post-148669","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-california","8":"tag-agriculture","9":"tag-bw-166","10":"tag-california","11":"tag-california-headlines","12":"tag-california-news","13":"tag-direct-to-consumer","14":"tag-grapes","15":"tag-jon-moramarco","16":"tag-napa-county","17":"tag-sonoma-county","18":"tag-turrentine-brokerage","19":"tag-vineyards","20":"tag-vinoshipper","21":"tag-wine","22":"tag-wine-business"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/148669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=148669"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/148669\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/148670"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=148669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=148669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=148669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}