{"id":155177,"date":"2026-01-29T17:40:09","date_gmt":"2026-01-29T17:40:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/155177\/"},"modified":"2026-01-29T17:40:09","modified_gmt":"2026-01-29T17:40:09","slug":"california-wine-business-confronts-hard-truth-on-supply-and-demand-at-sacramento-symposium","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/155177\/","title":{"rendered":"California wine business confronts hard truth on supply and demand at Sacramento symposium"},"content":{"rendered":"

The California wine industry is closer to balancing supply and demand<\/a> while still needing to adjust to changing consumer behaviors and global market pressures.<\/p>\n

That was the key message experts unpacked Wednesday before hundreds of industry professionals at the Unified Wine & Grape Symposium<\/a>\u00a0in Sacramento. They revealed sobering statistics about a continued oversupply of wine and grapes, and explored strategies to navigate what many consider the most challenging period in the industry\u2019s modern history.<\/p>\n

The panelists outlined three key requirements for market recovery: elimination of the wine inventory bubble, reduction of bearing acreage to sustainable levels, and stabilization of wine shipments to the marketplace.<\/p>\n

\u201cRecovery looks more likely in \u201927 or \u201928 to me than in \u201926,\u201d said Jeff Bitter, president of marketing Allied Grape Growers. That aligns with several industry forecasts<\/a> in the past two months. He suggested that while progress is being made on inventory and acreage reduction, the stabilization of consumer demand remains the biggest uncertainty.<\/p>\n

The symposium is the largest U.S. industry event, bringing together an estimated 9,800 professionals this year to the SAFE Credit Union Convention Center from Tuesday through Thursday.<\/p>\n

\"Liz<\/p>\n

Liz Thach, Ph.D., CEO of Wine Market Council, speaks at a news conference at the Unified Wine & Grape Symposium in Sacramento on Wednesday, Jan. 28, 2026. (Jeff Quackenbush \/ North Bay Business Journal)<\/p>\n

\"Jeff<\/p>\n

Jeff Bitter, president of Allied Grape Growers, speaks at a news conference at the Unified Wine & Grape Symposium in Sacramento on Wednesday, Jan. 28, 2026. (Jeff Quackenbush \/ North Bay Business Journal)<\/p>\n

\"Steve<\/p>\n

Steve Fredricks, president of Turrentine Brokerage, speaks at a news conference at the Unified Wine & Grape Symposium in Sacramento on Wednesday, Jan. 28, 2026. (Jeff Quackenbush \/ North Bay Business Journal)<\/p>\n

Show Caption<\/p>\n

1 of 3<\/p>\n

Liz Thach, Ph.D., CEO of Wine Market Council, speaks at a news conference at the Unified Wine & Grape Symposium in Sacramento on Wednesday, Jan. 28, 2026. (Jeff Quackenbush \/ North Bay Business Journal)<\/p>\n

Expand<\/a>
\nHow many grapes were picked?<\/p>\n

A common industry topic in the months after harvest is the size of the crop. The 2025 grape crush likely fell to historic lows, with estimates ranging from 2.2 million tons by Silicon Valley Bank<\/a>, to 2.25 million tons by Turrentine Brokerage<\/a> to 2.4 million tons by Ciatti Co.<\/a> and Allied Grape Growers. That range is well below the industry\u2019s long-term average and insufficient to meet current demand projections, unless further action is taken to curtail the number of tons crushed at wineries, the experts said.<\/p>\n

These estimates factored in a lot of unharvested grapes last season.<\/p>\n

Bitter said Allied Grape Growers\u2019 estimate includes 25% unharvested grapes statewide, with regional variations.<\/p>\n

\u201cI know areas that were 50% unharvested, and I know areas that had all their grapes harvested. The Central Valley, ironically, had most of the grapes harvested.\u201d<\/p>\n

That\u2019s because Central Valley growers largely had purchase contracts by season-end, while a number of growers in coastal areas had trouble selling all their fruit.<\/p>\n

But an industry already anxious about how much more inventory it may have going into 2026 will have to wait longer to find out. A first look at the government\u2019s crush tally, traditionally released in February, has been delayed until mid-March because of a new California law<\/a>. That change can affect industry planning and financing decisions for this season.<\/p>\n

Massive vineyard removals continue<\/p>\n

Bitter further detailed stark statistics about the industry\u2019s ongoing contraction in California, which produces over 80% of the wine sold in the U.S.<\/p>\n

\u201cThere\u2019s been a net loss of almost 40,000 acres in the last three years due to pull-outs that have been more aggressive than the newly bearing acres coming into production,\u201d Bitter said, extrapolating from data in the LandIQ wine grape acreage survey released in November, and other sources. The removals have accelerated dramatically, with 2024 and 2025 seeing an \u201cexplosion\u201d in vineyard removals compared with previous years.<\/p>\n

That survey found<\/a> that 8% of California vineyard acreage was removed in 2024-2025. While in the North Coast, the proportion was nearly 6% (7,550 acres), with the highest proportion (around 7%) in Napa and Lake counties.<\/p>\n

The trend shows no signs of slowing. Based on California vines removed between last harvest and year-end, Bitter estimated this year could see more than 40,000 acres removed statewide.<\/p>\n

These removals are being driven largely by economic necessity, Bitter said. In the Central Valley, some growers are switching to alternative crops like almonds, while coastal growers face fewer options for land conversion, according to Bitter and another speaker, Steve Fredricks, president of Novato-based Turrentine Brokerage.<\/p>\n

On the Central Coast, some growers have been turning to higher-value row crops such as strawberries and blueberries. But in the North Coast, fewer options are economically on par.<\/p>\n

That\u2019s leading to some vineyards being left to varying degrees untended, or \u201cmothballed<\/a>,\u201d rather than immediately removed.<\/p>\n

However, Bitter cautioned against the tactic of letting a vineyard sit without maintenance, with the expectation of returning to farm it in a season or two. The cost to get the vines back to commercial production later might be substantial. For younger vines, an option could be pruning them back to the trunks to make future training of shoots easier. But if the plants are nearing the end of their peak-output life, Bitter recommended pulling out the vines.<\/p>\n

Inventory bubble shows signs of improvement<\/p>\n

A critical factor constraining grape purchases has been a wine inventory bubble that built up during the pandemic years.<\/p>\n

That\u2019s making vintners cautious in signing grape contracts.<\/p>\n

\u201cWhat is potentially driving these purchase decisions is finished wine inventory. That is what buyers are looking at when they make the decision to go out and buy grapes today,\u201d Bitter said. \u201cHow much inventory do I have? Do I have too much? Do I want to add to it without a whole lot of thought about the fact that the inventory today, or the grapes today, is for inventory two or three years from now?\u201d<\/p>\n

Bitter pointed to federal data analyzed by BW 166 and the Gomberg Fredrikson Report showing that California wineries held over 20 months of inventory at year-end in both 2023 and 2024, well above the trend of 18-19 months in the 2010s.<\/p>\n

Despite the dramatic reduction in production, the industry still faces oversupply challenges. Bitter calculated that California needs around 3.2 million tons annually to meet current demand levels, assuming wine shipments stabilize at current levels of around 223 million cases.<\/p>\n

\u201cWe\u2019re probably somewhere between a quarter-million and 300,000 tons long currently, as we look forward,\u201d Bitter said, referring to the gap between production capacity and actual demand.<\/p>\n

The good news, which the Journal previously reported<\/a>, is that two consecutive small crushes have helped reduce this burden. Current estimates suggest inventory levels have dropped to about 19 months by the end of 2025, approaching the historical range.<\/p>\n

And that reduction in winery inventory is showing up in how much excess wine they are trying to sell to other producers.<\/p>\n

Fredericks, of Turrentine Brokerage, said the supply of excess California wine available for purchase in bulk has decreased significantly, but many traditional suppliers are either out of the market or operating with reduced volumes.<\/p>\n

This bulk market, commonly a relief valve for vintners who crushed more grapes than they needed or had unsold wine in tanks from previous vintages, has seen particular pressure in premium segments. Coastal regions are experiencing higher rates of unharvested grapes compared to the Central Valley, where growers have more alternative crop options.<\/p>\n

Mixed signals from consumers<\/p>\n

Liz Thach, Ph.D., CEO of Wine Market Council, presented consumer research revealing both challenges and opportunities. Wine consumption has declined, with health and wellness concerns playing an increasingly important role in consumer decisions.<\/p>\n

People are drinking less overall. Last year, only 29% of U.S. adults were drinking wine at least once every few months, down from 34% in the last survey, in 2023, and a level not seen since 1997, Thach said.<\/p>\n

Top responses for why they were cutting back was less alcohol consumption overall (53%), not as many \u201cwine-drinking occasions\u201d as before (25%), and perceived health effects (collectively 38%). To avoid wine being pushed further into being a beverage enjoyed on fewer special occasions, Thach said vintners should lean into the top occasion respondents associated with wine: romance (75%).<\/p>\n

Leading reasons why respondents didn\u2019t drink wine at all were preference for other alcohol beverages (39%) and didn\u2019t like the taste (35%).<\/p>\n

Wine Market Council is commissioning more research into that taste issue, looking into consumer taste preferences related to bitterness and astringency and how that affects consumption of wines ranging from bold reds to dry whites to sweet blends.<\/p>\n

The generational shift is key to the wine sales figures. Millennials are now the largest wine-drinking cohort, as boomers decline in consumption as they age. Gen Z, though younger and lighter in consumption, shows interest \u2014 particularly in sparkling and lighter styles.<\/p>\n

\u201cThey do like wine, they just drink it less frequently, and they drink it differently,\u201d Thach said.<\/p>\n

Less than one-third (32%) of young adults (Generation Z) cite health concerns as a primary reason for avoiding wine.<\/p>\n

But Thach pointed out widespread confusion and mistrust in the wine aisle. Nearly half of consumers surveyed believe wine is high in sugar, and 53% think sugar is added during production.<\/p>\n

\u201cPut it on the label,\u201d she urged. \u201cLet them know, if you did not add sugar, that there\u2019s no added sugar.\u201d<\/p>\n

Clear taste descriptors, smaller packaging formats (like cans and 187-milliliter half-bottles) and digital engagement reduce purchase-decision friction and invite trial. And vintners should be where wine drinkers are active on social platforms, including TikTok, where discovery increasingly happens, Thach said.<\/p>\n

However, certain segments show promise. White wines, particularly Sauvignon Blanc, have been one of the few categories to see growth, Thach noted. That\u2019s partly attributed to celebrity endorsements, namely by Taylor Swift of Sancerre, which recently sold out<\/a>. The research also identified opportunities in multicultural markets and alternative packaging formats.<\/p>\n

\u201cWe believe in the wine industry. We believe wine will win in the end and the next 8,000 years,\u201d Thach 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":"The California wine industry is closer to balancing supply and demand while still needing to adjust to changing…\n","protected":false},"author":2,"featured_media":155178,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8,7810,76141,44216,3945,49915],"class_list":["post-155177","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-headlines","tag-california-news","tag-inventory","tag-unified-wine-grape-symposium","tag-vineyards","tag-wine","tag-wine-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/155177","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=155177"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/155177\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/155178"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=155177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=155177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=155177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}