THE DUNNIGAN HILLS. The Kelsey Bench. Fiddletown. Edna Valley. Lodi.<\/p>\n
These disparate California regions would seem to have little in common, other than their rural ambience and dependence on agriculture. But they all share an unenviable quality: they\u2019re in deep economic trouble.<\/p>\n
That\u2019s because their primary crop \u2014 wine grapes \u2014 are not in high demand. In fact, grape prices have become so low for these and other California wine-producing regions that many vineyards have been abandoned.<\/p>\n
\u201cThe pain is not evenly distributed, but there aren\u2019t any regions that are doing great,\u201d said Erik McLaughlin, the CEO of Metis Mergers & Acquisitions, an advisory firm that specializes in the wine industry. \u201cThe problems are focused more on the value end rather than the premium side of the market, but the entire industry is affected.\u201d<\/p>\n
Twenty-five years ago, it seemed you couldn\u2019t go wrong planting winegrapes. Demand for California wine was booming, outstripping the supply from esteemed and long-established viticultural regions such as Napa and Sonoma counties. The San Joaquin Valley took up much of the slack, producing bulk wines that could either be blended into higher quality wines from other regions, or bottled in jugs as low-priced \u201cplonk.\u201d<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/BCN-20260512-ERIKMCLAUGHLIN-01.jpg\")
Walking with a grower in an unidentified California vineyard in October 2018, Erik McLaughlin, left, is the CEO of Metis Mergers and Acquisitions, an advisory firm specializing in the wine industry. (Metis Mergers and Acquisitions via Bay City News)<\/p>\n
But churning out wines made from cheap, unremarkable Central Valley grapes didn\u2019t cut it with the evolving wine-drinking public. As their knowledge, sophistication and bank accounts grew, wine consumers began to demand better wines from specific growing areas, or \u201cappellations.\u201d That\u2019s because different regions produce wine grapes with varying characteristics. This \u201cterroir\u201d is a major marketing point for wine.<\/p>\n
For aspiring winegrape growers and vintners, that was a problem. Land in Napa and Sonoma was prohibitively expensive. Many of them came to the same conclusion: if they couldn\u2019t plant grapes or make wines in known and respected viticultural areas, their wisest alternative was lobbying for recognition of alternative \u2014 and affordable \u2014 areas.<\/p>\n
Joining the AVA club<\/p>\n
The process is straightforward enough: growers send petitions to the Alcohol and Tobacco Tax and Trade Bureau, an agency under the U.S. Department of the Treasury. Petitions are granted once government reviewers determine the candidate region has sufficiently unique geographic, climatic and soil characteristics to qualify for approval.<\/p>\n
Vintners could then print the name of their \u201cAmerican Viticultural Area\u201d (AVA) on their wine labels; and typically, growers in these newly recognized appellations could expect a bump in the prices they charged for their grapes.<\/p>\n
That worked for many years, particularly given the stratospheric prices that developed for grapes and wines from the hallowed Napa and Sonoma Valleys. Wines from Lake, Amador, San Luis Obispo, Yolo and Monterey Counties didn\u2019t have the cachet of Napa and Sonoma vintages, but many were good \u2014 even very good \u2014 and they were a lot cheaper.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/LNM-20260513-ANDREWADAMS-01.jpg\")
Andrew Adams is the editor of Wine Analytics Report in Sonoma. Adams sees a \u201cstructural reset\u201d in the wine industry as Baby Boomers\u2019 wine consumption has declined and many younger people are not drinking at all. \u201cNone of the playbooks that worked over the past 20 years are working now,\u201d
he said. (Wine Business Analytics via Bay City News)<\/p>\n
But that all began to change a few years ago. Simply put, Americans started drinking less. And of all alcoholic beverages, wine arguably took the hardest hit.<\/p>\n
\u201cBaby Boomers drove the growth of the wine industry,\u201d said Andrew Adams, the editor of Wine Analytics Report. \u201cNow they\u2019re drinking less. Younger generations also aren\u2019t drinking as much [as younger people in the past], particularly wine. I think we\u2019re seeing a structural reset in the wine industry. None of the playbooks that worked over the past 20 years are working now.\u201d<\/p>\n
The downturn is affecting vineyardists more than winemakers at this point, said McLaughlin.<\/p>\n
\u201cSome winemakers are sitting on three-year inventories,\u201d McLaughlin said, \u201cbut they can address that to some extent by buying less fruit, making less wine, and discounting their wine in inventory until they reach equilibrium. But that means the demand for grapes is deaccelerating even more rapidly than the demand for wine, and that really hurts the growers. They have to sell a crop every year.\u201d<\/p>\n
Or not sell a crop. McLaughlin observes a 5% decrease in a winery\u2019s sales can translate to a 20% to 40% reduction in grape intake.<\/p>\n
\u201cThat\u2019s why you\u2019re seeing so much vineyard removal, even in Sonoma and Napa,\u201d said McLaughlin.<\/p>\n
The price of too much variety<\/p>\n
And if grape demand is weak in the Mecca of California wine, it\u2019s far worse in the once-popular \u201cvalue\u201d appellations. Recovering from the collapse may not be impossible, said Jeff Bitter, the President of Allied Grape Growers, a grower-owned winegrape marketing association, but it will likely require a dramatic reversal from past marketing strategies \u2014 and perhaps lowered expectations.<\/p>\n
\u201cIn the Eighties and Nineties, the proliferation of AVAs was largely driven by wineries and growers wanting to differentiate and promote themselves,\u201d Bitter said. \u201cThey wanted to emphasize their uniqueness, they felt they needed to stand out from all their competitors.\u201d<\/p>\n
But that push for differentiation also had a certain alienating effect for consumers \u2014 particularly as interest in drinking waned.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/BCN-20260512-JEFFBITTER-01.jpg\")
Jeff Bitter, the president of Allied Grape Growers, stands in a vineyard near Fresno in October 2025. The effort of wineries to differentiate themselves contributed to a \u201cconfusing and intimidating\u201d market for consumers, leading to decreased demand for lesser known appellations, he said. (Allied Grape Growers via Bay City News)<\/p>\n
\u201cSometimes there can be too much differentiation,\u201d said Bitter. \u201cIt can be confusing and intimidating. The boom in AVAs went hand-in-hand with the concept of wine as craft, wine as an artisanal calling \u2014 but it could also be paralyzing for the consumer. Too much choice can be as discouraging as too little. In that scenario, the highly recognizable appellations like Napa and Sonoma are going to dominate.\u201d<\/p>\n
Now, with wine consumption dramatically ebbing, growers in the newer and lesser-known appellations are finding there\u2019s no home for their grapes.<\/p>\n
\u201cThe wineries just need less fruit,\u201d said Christian Miller, the director of research for the Wine Market Council, a market research firm that concentrates on U.S. wine consumption trends.<\/p>\n
\u201cThere\u2019s an oversupply of winegrapes from all regions,\u201d Miller said. \u201cConsolidation in the industry is another factor. You have these big conglomerates like Constellation buying up wineries and labels all over the state. That gives them immense power in setting grape prices \u2014 even for Napa and Sonoma. And even if they do buy fruit from other appellations, the price is liable to be too low for growers there to turn much or any profit.\u201d<\/p>\n
The current trends don\u2019t necessarily reflect poorly on the quality of the fruit from \u201calternative\u201d appellations. Lake County produces some spectacular cabernet sauvignons. The Edna Valley in San Luis Obispo County remains highly regarded for its rich, full-flavored chardonnays. And Lodi has become known as a prime region for zinfandel \u2014 not that its hard-won reputation is much comfort to growers there these days. Along with drinking less wine generally, consumers are spurning some varietals that were once sought after \u2014 zinfandel among them.<\/p>\n
\u201cI feel bad for Lodi, because they did everything right \u2014 marketing, matching varietals with their area, promoting sustainability \u2014 and they\u2019re still struggling.\u201d<\/p>\n
Christian Miller, Wine Market Council<\/p>\n
\u201cI feel bad for Lodi,\u201d Miller said, \u201cbecause they did everything right \u2014 marketing, matching varietals with their area, promoting sustainability \u2014 and they\u2019re still struggling. Zinfandel was once extremely popular, but over the years it gained a reputation for high alcohol content. Then it started getting squeezed out by red blends from established labels \u2014 proprietary, high-quality red wines blended from different varietals that had the same sensory attraction of Zinfandel, coupled with real brand muscle.\u201d<\/p>\n
Surviving on other crops<\/p>\n
Growers in some appellations may be able to find alternatives to wine grapes \u2014 but that\u2019s more an exception than a rule.<\/p>\n
\u201cMonterey County has a major oversupply of grapes, but it\u2019s also a prime region for vegetables, so some growers there might be able to make a successful transition,\u201d said Adams, \u201cbut other regions don\u2019t have many options. Land is likely too expensive for [less valuable] alternative crops, and water can also be an issue. You\u2019re also liable to see development pressures in some of these areas as winegrapes come out, though California\u2019s land use policies are stringent, and that may be less of an issue here than in some other states.\u201d<\/p>\n
As noted, some growers are getting out of the game entirely, abandoning or tearing out their plantings. Others are \u201cmothballing\u201d their vineyards by reducing irrigation and cultivation, eliminating fertilizers, pruning minimally and forgoing harvests. Such vineyards can be brought back into full production relatively easily if prices improve.<\/p>\n
But that\u2019s a big if.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/BCN-20260512-SONOVINEYARD-02.jpg\")
An abandoned zinfandel vineyard in Sonoma Valley on Thursday, May 8, 2026. (Glen Martin via Bay City News)<\/p>\n
\u201cI don\u2019t think it\u2019s the end of everything,\u201d said McLaughlin, \u201cbut I\u2019m not sure it\u2019s just cyclical \u2014 that we eventually get back to where we were at the peak. This feels more like a secular change.\u201d<\/p>\n
In other words, we\u2019re likely to end up with a smaller wine industry, one in which grape supplies and the number of wineries reflect the smaller pool of wine drinkers. We\u2019re also likely to see less emphasis on AVAs as a marketing strategy, said Bitter.<\/p>\n
\u201cWith all the consolidation among both wineries and distributors, there\u2019s been a major push for simplifying, even commoditizing, wine,\u201d Bitter said. \u201cThat\u2019s especially true for the lower end \u2014 under $20 a bottle. The big conglomerates have a lot of labels, and they\u2019re not interested in promoting the unique attributes of one AVA or another.<\/p>\n
\u201cThey\u2019re focused on brands. They\u2019re letting people build a brand, put the sweat equity into promoting it, and then they buy it and run with it as far as they can. Once a brand fizzles, they bring the next one up. The homogenous products \u2014 \u2018California\u2019 wines instead of wines from specific AVAs \u2014 dominate.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"THE DUNNIGAN HILLS. The Kelsey Bench. Fiddletown. Edna Valley. Lodi. These disparate California regions would seem to have…\n","protected":false},"author":2,"featured_media":318634,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[1955,133066,50708,133067,133068,387,133069,7,1369,9,8,133070,512,4617,58033,3003,133071,383,133072,53337,93,4306,133073,116490,133074,57766,5706,858,13576,133075,6035,3628,133076,6754,44216,133077,11158,61052,11270],"class_list":["post-318633","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-agriculture","tag-alcohol-industry","tag-amador-county","tag-american-viticultural-areas","tag-ava","tag-business","tag-cabernet-sauvignon","tag-california","tag-california-agriculture","tag-california-headlines","tag-california-news","tag-california-wine-industry","tag-central-valley","tag-chardonnay","tag-constellation-brands","tag-consumers","tag-dunnigan-hills","tag-economy","tag-edna-valley","tag-farming","tag-featured","tag-featured-news","tag-fiddletown","tag-grape-growers","tag-kelsey-bench","tag-lake-county","tag-lodi","tag-monterey-county","tag-napa-valley","tag-rural-economy","tag-san-luis-obispo-county","tag-sonoma-county","tag-sonoma-valley","tag-trends","tag-vineyards","tag-wine-consumption","tag-wine-grapes","tag-wineries","tag-zinfandel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/318633","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=318633"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/318633\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/318634"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=318633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=318633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=318633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}