California wine is in serious trouble. For 25 years, the industry boomed. Then it started to unravel.

[Auggie]

When (Megan Bell) released a new batch of wines in August, only three of her 19 distributors agreed to buy any. She was running $65,000 over budget on opening a tasting room in Santa Cruz. And she owed $80,000 to grape growers.

Sales in the second half of the year were the worst Bell had seen since starting her small business, Margins, eight years ago. “2023 was a disaster,” she said. And she knows she wasn’t the only winemaker feeling it: “If anybody’s not telling you that, they’re lying.”

The entire $55 billion California wine industry is, like the wine industry worldwide, experiencing an unprecedented downturn right now.

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.

Link (paywall): https://www.sfchronicle.com/food/wine/article/california-wine-industry-downturn-18711236.php

Highlights (from the link):

• Millennials and Gen Zers aren’t drinking as much alcohol as older generations.

• Hard seltzer and canned cocktails have stolen market share.

• Current medical consensus suggests that alcohol is unequivocally bad for human health.

• Beer and spirits sales are struggling, too.

• Many in the industry are predicting “a good-sized house cleaning,” -- Ian Brand, owner of I. Brand & Family Winery, Monterey County.

• “There’s too much competition” -- Steve Lohr, president and CEO of J. Lohr Vineyards, San Jose.

• This may simply be a market in need of a correction.

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Predictions:

Largest U.S. companies -- Constellation, Gallo, The Wine Group, maybe Trinchero, and Kendall Jackson -- are in a better place to survive because of their large portfolios, guerrilla marketing techniques, and strong distribution channels. So are smaller family-owned producers that have paid off and own their equipment, buildings, and vineyards.

There will be always be an international millionaire's market for the really high-end, rare stuff like Screaming Eagle and Opus One.

Prices of a lot of middle tier and life-style brands will drop as inventory needs to be cleared out.

Article focuses on producers, but grape growers are in the same boat.

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Quote (from the link): “Things feel really sad right now,” Bell said. “I’m looking at people who are like me eight years ago and thinking, you’re never going to make it.”

[SWBTATTReg]

1. Everybody is making wine. Everybody is making 'homemade' or 'unique' beers, the markets are downsizing too.

I wonder just how many brands are there now?

[callous taoboy]

2. I was drinking wine consistently throughout my late 40s/early 50s,

but have had to seriously scale back on all alcohol due to a health issue. Not only has my issue become manageable, but I have lost 25 pounds and feel way, way better.

[3Hotdogs]

3. I can't drink wine. I''m allergic to something in it. My breathing gets immediately compromised.

I can drink beer hard cider and whiskey. But no wine.

[quaint]

5. Sulphur in wine, YMMV.

If the bottle doesn't list sulphur, I can drink it but not afford it.
If the bottle says sulfur free, it isn't worth five bucks.
If the bottle lists the percentage of sulphur, just take me to emergency.

[IbogaProject]

6. Amino acids

I cant drink one sip of wine, otherwise hangover. I'm ok w sulphites. I've been told that amino acids after filtering and 'fining' are left behind and inflame some people's immune system.

[Auggie]

7. My breathing too. I think it's histamines.

[Doc Sportello]

4. I think cannabis plays a role as well

I quit drinking after switching to edibles. No smoke to affect the lungs and none of the negative effects that alcohol brings. I love the tastes of wine and beer but especially at may age, it's just not good for the body.

[Auggie]

8. I've been thinking of edibles

[Doc Sportello]

12. Just don't do a Maureen Dowd

When starting you just don't want to overdo like she did. Research and start off slow the first time. Then build up. Most dispensaries are very helpful with newbies. Edibles help with sleep, anxiety and they give me a more positive, grateful outlook - without hangovers or coughing. There's really nothing to be afraid of, except for the munchies which add weight.

[Auggie]

13. Thanks

[Probatim]

9. You might be right - I've found that any amount of alcohol ruins my sleep and part of the next day.

This change occurred in the last 3-4 years. Even though I'm physically active (running 15-18 miles a week), I can't process alcohol like I used to.

I can have a 10mg gummy, sleep like a baby (without waking up every hour or wetting the bed), and be ready for the next day. I have noticed I need to drink a bit more water when I have gummies, but I feel much better than if I had just one beer or cider.

[ZonkerHarris]

11. same

[ZonkerHarris]

10. as my wife and I travel around the state up and down PCH through the central coast we noticed

that for the last 10-12 years there has been a huge growth of vineyards everywhere from Santa Barbara to Cambria.
Ten years ago that's all we saw with new hillsides being planted with fresh young grape trees and now they're all maturing and producing fruit
I was wondering if there was going to be a glut because of all this production that I can literally see from my car as I drive along the highways

[NBachers]

14. I drove through the Santa Cruz Mountains and up the PCH today and saw some tempting wineries, but I'd never take a sip

and try to negotiate those winding curvy mountain roads. I've also noticed more plantings going up in previously un-vined locations.

[Mr.Bill]

15. Before last October I lived in Lake County, California

which borders Napa County on it's northern end. I lived there for over 30 years. When I moved there in '91, Lake county grew one third of the Pears in the US. Walnuts were our second largest crop.

Over the last 30 years, they have torn out orchards that have been there for many decades and planted wine grapevines by the millions. It seems they realized they can grow pretty much the same quality grapes as Napa on land that costs pennies on the dollar compared to Napa. Lake county is the home of Clear Lake, the largest natural lake in the state at 44,000 acres. Plenty of water available. The ground water is also plentiful and stayed strong even through the drought years.

A lot of people said it was a mistake to tear out a food crop that has done well for over a century for this fad called wine. It looks like maybe they were right. It was sad to see. Maybe soon Marijuana will be their big crop.

[Auggie]

16. "They" were following the money ... and I can't blame them

More money in quality wine grapes than pears. Thank you, free market.

I work with family farms in the Central Valley. They want to grow food staples, but wholesalers and retailer pay shit for it. There's more money in grapes and almonds. And they're easier to farm in most instances. Cannabis in the new darling.