.Growing Signs of Wine Industry Downturn

An interesting and somewhat contradictory thing is happening to the California wine industry right now: It’s starting to show signs of a downturn, even though Sonoma, Napa and Lake counties just had their most lucrative wine-grape harvest ever in 2023. In the Napa Valley alone, the latest crop reports show last year’s plentiful rains made for a 35% increase in “the gross value of its agricultural production,” the North Bay Business Journal reports — for a haul worth over $1.2 billion. But those numbers might not hold in future years, if recent market reports are any indication. Demand for wine — especially among younger people — has been plummeting over the past year, after a boom during the first couple years of the pandemic, according to an in-depth piece published earlier this month by the San Francisco Chronicle. (Apparently young people are finding other ways to numb their pain!) “The entire $55 billion California wine industry is, like the wine industry worldwide, experiencing an unprecedented downturn now,” the Chronicle reports. “No sector is immune — not the luxury tier, not the big conglomerates, not the upstart natural wines. Wine consumption fell 8.7% in 2023, according to leading industry analyst the Gomberg Fredrikson Report, a sobering reversal for an industry that had, for a quarter-century, taken annual growth for granted. This year could be the breaking point, with many industry figures predicting ‘a good-sized housecleaning,’ as put by Ian Brand, owner of I. Brand & Family Winery in Monterey County. ‘A lot of brands are dead, but they don’t even know it right now,’ echoed Michael Honig, president of Honig Vineyard & Winery in Napa Valley.” Under this doomsday cloud for the industry, vintners all over California are reportedly making the tough decision to rip out their vineyards. Meanwhile, a growing cohort of activists — including some in Sonoma County — are trying to protect historic, old-growth vines from the sweep. More from CBS: “Winemakers in Lodi, pulling vines from the ground, reflect an industry that has hit a pocket of uncertainty. After decades of steady growth, wine consumption has plateaued, or even started to decline by some measures. So, supply is up while demand is heading the other direction. And while industry giants in Napa may be slightly insulated from this, [Tom Davies, President of V. Sattui Winery in St. Helena] said, yes, the industry is changing. ‘We were blessed with people my age, drinking wine,’ Davies said of the possible generational divide. ‘They were really loyal. The Boomers discovered wine.’ He said younger drinkers may not be shifting towards wine like their parents. Something he thinks can and will happen. ‘I think that it is incumbent upon our industry, to learn how we talk to this new generation,’ Davis said.” In a somewhat dark turn for the traditionalists among us, the Business Journal reports that big wine brands are trying to win over Gen Z by pushing lighter, more low-cal wines — and food-and-bev marketing gurus are recommending winemakers explore more of the fun, fruity flavors that have helped the hard seltzer and vape industries win over the kids. Oh, lordy… (Source: SF Chronicle & CBS News & North Bay Business Journal & North Bay Business Journal & North Bay Business Journal & North Bay Biz & Barrel Ahead & Retail Wire & Progressive Grocer)