California wine growers face declining demand, uproot vineyards amid financial losses

Harvest season has arrived across California wine country, but many growers are struggling to sell their grapes as shifting drinking habits have caused demand to plunge.

The ongoing decline is compelling some farmers to uproot vineyards that their families have cultivated for generations.

Wine sales have fallen by more than 20% over a five-year period, forcing down prices paid for grapes and prompting California growers to pull roughly a quarter of the state's total vineyards out of production.

Many growers are currently forced to decide whether to harvest at a financial loss, leave fruit on the vine, or replace their vineyards with crops in greater demand, such as almonds, walnuts, pistachios, and olives.

For third-generation grower Bill Berryhill, the downturn means another year of suffering financial losses and wasting hundreds of tons of healthy grapes.

"It’s just sickening," said Berryhill, who was standing in a vineyard of unsold merlot grapes.

"You raise a beautiful crop, and it’s really a nice vintage this year, and you drop it on the ground. It’s sad. All your work is just down the toilet."

Berryhill, who operates Berryhill Family Vineyards near Lodi in the San Joaquin Valley, said he cannot find buyers for grapes cultivated on 200 of his 500 acres (202 hectares).

He plans to remove 50 acres (20 hectares) of his vineyards once the harvest season comes to an end.

"I will lose money for sure. It’s just a matter of how much," Berryhill, 68, said. "This has been a big loser for three years now."

At its peak during the pandemic, California contained nearly 600,000 acres (242,811 hectares) of wine vineyards, but farmers have cleared or stopped actively cultivating wine grapes on approximately 25% of that land, according to Jeff Bitter, president of Allied Grape Growers, an organization representing roughly 500 farmers statewide.

This year, around half of California’s wine grape crop entered the harvest season without signed contracts with buyers, compared with typical years when 70 to 80% of the crop is secured under contract, Bitter said.

If they are lucky, growers are able to sell their uncontracted grapes at a loss to processors making concentrated syrup.

Even as farmers have removed or abandoned tens of thousands of vineyard acres throughout California in recent years, excessive quantities of grapes are still being produced, Bitter said.

"The market is just so depressed that it’s difficult to grow them profitably," he said. "Demand is not going up. It’s still continuing to decline."

Kyle Collins, a Lodi-based operations manager with Allied Grape Growers, recently evaluated mature grapes in a petite verdot vineyard in Lodi, which stands as one of California’s most productive wine regions.

"Unfortunately, we do not have a buyer for these grapes," Collins said. "That’s unfortunately a reality for not just this vineyard but a lot of us around here."

Beyond causing direct damage to vineyards, the drop in sales has negatively affected local businesses and agricultural workers, he said.

"That’s not getting into the pockets of the people doing the field labor, the farmworkers," Collins said. "It does have a trickle effect in the economy."

The crisis marks a dramatic shift for California's wine industry, which accounts for more than 80% of all U.S. wine production due to its unique geographical features and Mediterranean climate. For decades, the state's wine sector expanded steadily as American consumers, particularly baby boomers, cultivated a preference for cabernet, zinfandel, chardonnay, and other varieties.

Renowned wine regions such as Napa and Sonoma Valley produced premium vintages, while the Central Valley focused on growing grapes for less expensive commercial labels.

Wine sales reached their peak during the pandemic in 2021, when social gatherings were restricted and restaurants were closed, prompting people to stock up on wine and drink more at home.

However, over the past five years, wine sales have experienced a sharp drop, and industry expectations point toward further declines this year.

In the U.S., sales of wine cases decreased 23% from 427 million in 2020 down to 329 million in 2025, while total wine expenditure fell 22% from $94 billion to $74 billion, according to First Citizens Bank, formerly Silicon Valley Bank, which produces an annual State of the Wine Industry Report.

California cannot export its excess supply because global wine consumption is falling and domestic production costs are higher than in countries like Argentina and Australia, Bitter said. In 2025, worldwide wine consumption fell 2.7% compared with 2024 and was down 14% relative to 2018, with steep declines observed across Europe and China, according to the International Organization of Vine and Wine.

A range of factors is driving the contraction in wine sales. Baby boomers are aging out of the buying market, while younger consumers are drinking less alcohol due to health and financial considerations. At the same time, wine faces competition from craft beer, liquor, canned cocktails, and cannabis.

"The kids just aren’t drinking as much," Berryhill said. "And it’s not just wine, it’s whiskey and beer and everything. And then you’ve also got the competition with all the seltzers."

International tariffs have further reduced export market opportunities, particularly to Canada, which had served as the single largest foreign buyer of American wine.

"The next step in the healing process is not only balancing supply and demand, but now actually figuring out what it is that the other consumers want," said Rob McMillan, chief wine strategist at First Citizens Bank.

Industry representatives hope the market will reach a bottom soon. In the meantime, growers are forced to absorb heavy losses while trying to hold on.

Berryhill, whose grandfather began cultivating grapes nearly 100 years ago, does not intend to abandon wine growing even though it is costing him money.

"I love growing grapes. It’s in the blood," Berryhill said. "Because I love them, I can weather this and I’ll fight through it."