California Wine’s No Good, Very Bad Month

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As sunny California is still reeling from having to accept that the Philadelphia Eagles are conclusively, unarguably the greatest team in the NFL at the moment, even more bad news has hit the state’s wine industry—and, by extension, the USA’s wine industry (which California production volume dominates almost as much as the Birds dominated the Kansas City Chiefs in Superbowl LIX).

Silver Oak’s Twomey abruptly shuttered two of its tasting rooms, while nearly fifty-year-old winery Newton announced that it was closing down permanently. All of this comes in the wake of a global demand lull for wine at nearly every price-point. Just as it went for KC after its ill-fated pick-6 throw against the Eagles in the most recent Superbowl, things just got worse for CA wine from there.

Decanter has just reported on the Unified Wine & Grape Symposium’s State of the Industry address, and there are some tidbits in that presentation that look nearly as grim as KC’s total production of just 23 yards against the Eagles’ defense in the first half of the Superbowl (and no, I am NOT going to let up on the SB references).

During the address, Allied’s President Jeff Bitter gave the sobering assessment that California’s vineyards are over-planted versus wine demand by as much as 50,000 acres (20,000 hectares, or about 78 square miles). OUCH.

But wait, it gets even worse. Worse than Philly’s perfectly-executed “dagger” touchdown that put them up 33-0 during Superbowl LIX (which, if I have not made it clear yet, the Eagles won in commanding fashion, utterly devastating their opponent).

From Decanter:

Bitter acknowledged that if 20,000 ha were indeed removed last year, it would not have single-handedly corrected the market, as total US wine shipments declined by 4.2% in 2024, according to Wine Business Analytics… ‘We’re in a situation where we’re over-planted for the market capacity that we have, and the end-of-the-line result is that some people have to get out of the business,’ said Bitter… ‘We need to address the issues related to the demand side of the business, as we can only correct ourselves into balance for so long.’

The wine industry in the USA has utterly failed to prepare for the market headwinds of a changing consumer base that we predicted and that we could see coming for almost a decade. Real business will close, real people will lose there jobs and will suffer, and the saddest part is that much of it could have been prevented.

The industry, alas, has no one to blame but itself.

Cheers!