California Winery Bankruptcies, Closures & Grape Oversuppply Mean Discount Prices Coming Your Way: 5 Indicators
California wineries are struggling, sales are declining.
Direct to Consumer (estate on-site sales and club shipments) in California are declining. The central coast incurred the biggest deterioration, losing 14%. Around the country midyear case shipments stood at 3.1 million cases, down to 2019 sale levels (California accounts for 29% of these shipments.) And these declines are similar to retail channel sale declines.
What does this mean to you? Discounts. BOGOS. 50% off case sales. Lower prices.
Vintage Wine Estates is currently the best evidence of declining wine consumption. Vintage declared bankruptcy in July 2024. Their portfolio of 34 wine brands is for sale and bargain hunters like Vino.com, Delicato Wines, Adair Winery and Foley Wines are Stalking Horse bidders hunting these liquidating wineries.
So here comes your opportunity.
Once they’re purchased through bankruptcy court, there’s a whole lot of vino to be monetized and liquidated. Brands like Letitia, Layer Cake, Sonoma Coast Vineyards, Tamarack Cellars, Buried Cane Wines & Delectus Winery will come to market at liquidation discount pricing.
| ‘The discounts we expect to see are 40% to 50%. A 10% discount is not their final offer.’ |
If you are a fan of these wines keep your eyes open for specials and discounts. This is your opportunity to stock up on some good vino at a good price.
We’ve seen the same behavior with E.J. Gallo purchases. After being sold off winery warehouses are full of previous year vintages and they’re not gaining value. In fact these wine bottles & juice need to be monetized just like E.J. Gallo’s liquidation of Wildhorse, Hahn & Edna Valley wines after their closure.
We expect to see 40% to 50% discounts. A 10% discount is not their final offer. Keep an eye out for big discounts at your favorite wine emporium or direct email.
Another indicator of pain awaiting growers and vintners: too much unsold wine grape on the marketplace. Many winemakers purchase grape from growers and many of those growers contracts have been canceled: nobody wants the grape.
This chart from WineBusiness.com shows the imbalance of contract grape grower’s inventory. There is just too much grape available and they report one grape brokers saying, he’s working to sell everyone’s grape, but, “We’ve been dropping the prices to just cover their costs — it’s tough to do that — and still, no one’s biting.”
Another example of the decline is Trinchero Family Estates’ closing Terra d’Oro in California’s Gold Country. Their production facilities can produce 360,000 cases yearly. Trinchero is tight lipped about it’s closure but locals blame it on challenges selling wine to consumers and over supply of grapes. They point to consumers switching to beverages like Ready To Drink cocktails, marijuana, whiskey and hard cider beverages. Trinchero is the second largest family-owned wine company in the world with 48 winery labels and a 20 million case annual production. E.J. Gallo sells 80 million cases. And, as we reported earlier this month, E.J. Gallo closed Edna Valley Winery as of August 31.
As well, Alexander Valley’s Sbragia Winery, Sonoma’s Carlisle Winery and Napa’s Brendel Wines and Tarpon Cellars have closed. Twisted Oak Winery in the Sierra Foothills recently announced their closing at the end of September, closing up shop. Their wine is currently on 50% off sale.
Retail sales of wine are declining as well. Constellation Brands, one gargantuan adult beverage seller projects their spirits/wine division will decline 4-6% range through 2025 because, “Macroeconomic headwinds affecting consumers, particularly unemployment, and prolonged inventory destocking in wine and spirits markets.” They’re writing off $1.5 billion to $2.5 billion of Wine and Spirits goodwill impairment. These are big numbers.
Constellation adds in their corporate report, “In our Wine and Spirits Business, we are also taking incremental tactical pricing and marketing actions to support demand for our core brands.” This FTC reporting speak translates to……’We’re lowering prices.’
If you’re looking for discounted quality wine, keep your eyes open. One of our favorite wineries here in Paso proudly touts they rolled wine prices backwards to 2019 levels.
We’re sure more closures are to come. Deals are here now. More are coming .
Some notes on our wine ranking system.
Bill & Erin Hodge write about California Wine, the estates & winemakers producing them and educational information about Vino. Living in California Wine Country provides a front row seat to the places you want to visit the most here in the Golden State.
– -✰ means -What’s next on your list of wines
-✰ means -Not liking it too much
✰ means -We’ll drink this wine, especially if it’s hosted!
✰+ means -You’ve got our attention and we might buy this wine.
✰+ + means -We’re hooked and we’re going to buy this wine.
When you see -✰/✰+ with a slash, it means we disagree.
