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The Lodi Winegrape Commission\u2019s Stuart Spencer walks past rows of shriveled grapes left on a vineyard in Lodi, Calif., on March 25, 2024. <\/p>\nWinery owner Stuart Spencer estimates that he left about 50 tons of grapes to rot on vines in Lodi, Calif., last fall, as harvesting and processing them would cost more than they were worth.<\/p>\n
\u201cWe\u2019re doing our best to keep our head above water,\u201d said Spencer, the owner of St. Amant Winery and executive director of the Lodi Winegrape Commission.<\/p>\n
Spencer blames a mix of factors: weak demand, a worsening grape oversupply crisis and an influx of cheap bulk imports flooding the market and collapsing California bulk wine prices. Tariffs have increased the costs of labels, capsules and corks and triggered a backlash from the biggest international consumer of Californian wines, Canada. <\/p>\n
Wineries of all sizes across California have started laying off workers and shutting down production facilities to cut costs.<\/p>\n
\u201cPeople [are] having to face their balance sheet,\u201d said wine industry consultant Dale Stratton, who spent more than 30 years in leadership roles across Gallo Wines and Constellation Brands. The two companies \u2014 among the largest U.S. wine producers \u2014 have announced sweeping layoffs recently.<\/p>\n
At the heart of the wine industry\u2019s crisis is a basic supply and demand problem: too many grapes and not enough buyers. <\/p>\n
Consumer demand is shrinking because boomers \u2014 the industry\u2019s biggest fans \u2014 are aging out of the wine market. Younger generations drink less alcohol in general and are less likely to choose wine. The wine industry has lost drinkers to premium beers and spirits. <\/p>\n
The Lodi Winegrape Commission\u2019s Stuart Spencer walks past rows of shriveled grapes left on a vineyard in Lodi, Calif., on March 25, 2024. <\/p>\n
(Gina Ferazzi\/Los Angeles Times)<\/p>\n
California wine giant Gallo, the maker of Barefoot wines and the largest supplier of wine in the U.S., notified the state last month that its plans to lay off<\/a> 93 people and close a facility in St. Helena. The same day, Santa Rosa-based Jackson Family Wines, best known for its Kendall-Jackson Chardonnay, notified the state that it would close its Carneros Hills Winery in April and lay off 13 workers.<\/p>\n Alcoholic beverage behemoth Constellation Brands on Feb. 3 notified the state of plans to lay off 212 workers at its Mission Bell Winery in Madera. The publicly traded company, which owns Robert Mondavi wines and Modelo and Corona beers, has set a goal of $200 million in cost savings by 2028 and is shifting away from wine to focus more on its growing beer business, its financial filings show<\/a>. Santa Rosa-headquartered Foley Family Wines & Spirits has also wound down operations at its Chalone Vineyard in Monterey and laid off the entire winemaking staff at Chalone, though it plans to keep producing the Chalone label wine enjoyed by Julia Child, the San Francisco Chronicle<\/a> reported. <\/p>\n It\u2019s harder to keep track of layoffs at small wineries. California law requires companies with more than 75 employees to give notice of impending layoffs. But small wineries are subject to the same economic pressures. <\/p>\n \u201cWe have had to let go more than a dozen people and removed hundreds of acres of vineyards,\u201d one Paso Robles winery said in a new report on U.S. wine exports from the Wine Institute, a trade group. \u201cWhat concerns us most is the uncertainty.\u201d<\/p>\n Winemaking in California traces its roots to the days of the Spanish missions, when Father Jun\u00edpero Serra cultivated European grapes for Communion and barter at Mission San Juan Capistrano<\/a>. <\/p>\n As the mission system was dismantled in the 1830s, European immigrants purchased swaths of land across the state \u2014 starting in Southern California<\/a> \u2014 and began producing wine commercially. The state\u2019s wine business prospered during the Gold Rush, which brought an influx of drinking men.<\/p>\n In 1920, Prohibition imposed a nationwide ban on producing, transporting and selling alcoholic beverages and decimated the American wine industry. A few wineries, including San Antonio Winery in Los Angeles, survived Prohibition by producing sacramental wines for the Catholic Church.<\/p>\n California\u2019s wine industry, which was rebuilt in the aftermath of World War II, shot to global prominence after the \u201cJudgment of Paris\u201d tasting in 1976, where French experts in a blind tasting ranked California wines above prestigious French bottles.<\/p>\n