California Wineries Are Selling Out or Closing Up: Will Your Favorite Remain Open in 2027?
Winery Margins Are Tanking From Low Visitation And Sales: It’s A Recipe For Discounts Liquidating Unsold Wine
Could your business or workplace withstand 25%* decline in sales? How about another 10-12% decrease since January 2025. How many people would be laid off? How many employee hours would be cut? This is the state of California wine making today.
It’s getting messier and uglier for winemakers as Americans cut back on wine & spirits consumption according to SOVOS and WineBusiness.com’s recent 2025 Direct-to-Consumer Wine Shipping Mid-Year Report.
Healthier, wealthier and wiser seems to be the mood of wine lovers.
This pressure will force more price discounting, more non-disclosure wines (private label) in the marketplace along with winery closures. It will certainly lead to more retail discount wine sold without your favorite winery label attached.
How will your favorites weather this storm? The pain of profit pressure on wineries continues in 2025.
| Winery DTC Sales By Year Jan-June 2018 – 3 million cases 2019 – 3.1m cases 2020 – 4.1m cases 2021 – 4m cases 2022 – 3.7m cases 2023 – 3.4m cases 2024 – 3.1m cases 2025 – 2.7m cases SOVOS WineBusiness.com |
Direct to Consumer (DTC), a large source of revenue for winery sales, are at their lowest level since 2018 when 3 million cases of wine sold the first half of the year. Current wine sales are 1.4 million cases lower than 2020, the peak year. That’s 16,800,000 bottles of unsold wine, yearly.
And while the price of an average estate bottle of wine is up 8% to $52.68, the total value of those sales are down 6% to $1.7 billion according to WineBusiness.com.
All this leaves some pained and strained growers and winemakers wondering if they’ll survive until their 2026-27 vintage.
Monterey’s largest grape grower, Valley Farm Management, just announced they’re closing business at the end of 2025. For 51 years they’ve propagated wine grape on upward of 3,000 Monterey acres for wineries like Cru Winery and others. This is 7% of the region’s grape acerage. Jason Smith attributed the situation to supply and demand imbalance. According to the 2nd generation owner, KSBW News reports the decision is based upon selling only 50% of his grape crop as they prepare for their 2025 harvest.
“It’s really simple, supply and demand, economics, there are many other factors, but bottom line, we have more grapes than we have demand for wine bottles,” Smith said on KSBW News.
This oversupply of wine grape means plenty of unsold wine juice is sloshing around the state of California looking for a home. Plenty of wine will show up in Non-disclosure bottles of wine along with more and more discounted grocery store vino. Grocery Outlet is one of the most recent entrants with their Second Cheapest Wine (Sauvignon Blanc, Pinot Noir, Cabernet Sauvignon) selling at $5.
The excess estate wines will be sold in the $20-$30 range with new branding, new names and a reference to the estate appellation (AVA). Wines from Napa and Sonoma are showing up in stores and online outlets.
One of the more interesting online outlets is WineAccess.com where they clearly articulate the wines’ origin while touting the winemaker’s bona fides. Of course no estate nor winemaker names grace these bottles. Some of these breezy and hip descriptions are written just like estate wine tasting notes.
| ‘The excess estate wines will be sold in the $20-$30 range with new branding, new names and a reference to the estate appellation (AVA). Wines from Napa and Sonoma are showing up in stores and online outlets.’ |
A $20 Cabernet Sauvignon – “The winemaker behind the 2023 Dust to Glory is a fixture in the Napa firmament—one of the most respected grape wranglers out there. They’re known for a demanding approach and an obsession with quality, as well as a no-BS attitude honed over decades. We didn’t even need an NDA: As they told us “I trust you…and also if you say where you got this juice, no one in this valley will ever sell you a barrel again.” We’re not even going to tell you how much their Cabs sell for—it might be too much of a clue—but this is one helluva deal.”
A $30 Cabernet Sauvignon – “We had to sign TWO NDAs to land one of the most scorching Cabernet deals we’ve done this decade. From the family whose name is synonymous with cult Cabernet, the 2023 Radio Silence Cabernet Sauvignon Atlas Peak hails from one of the top sites in one of Napa Valley’s hottest AVAs—and bursts with the burly character that you expect from triple-digit mountain Cabernets. Considering that the source winery’s Cabs cost between $150–$250, we’d have taken a lifelong vow of silence to score this price.”
| Wine Varietals Losing Steam In The First Half Cabernet Sauv -10% Chardonnay -11% Pinot Noir -8% Other Reds -8% Blends -6% SOVOS WineBusiness.com |
By region, Napa sales sank 12% in the first half of 2025, Sonoma slid 11% and the rest of California sagged 12%. Interestingly in the Central Coast where we live, sales slumped just 6%.
We project crumbling profits will show up several ways:
1-Diminishing pickup party perks, think fewer bands, food and entertainment.
2-Bankrupt wineries, closing wineries or new opportunistic owners.
3-Fewer tasting perks when you visit your winery.
4-Weekday closures, tasting rooms open only Friday, Saturday and Sunday.
5-Dynamic pricing for tastings, Buy One Get One (BOGO) promotions or the return of complimentary tastings. Well, one can hope.
6-Pricing Rollbacks will continue. Stay on the lookout for 1/2 price mixed cases, private label and non-disclosure bottles of wine at discount.
Signs of the pain abound here in wine country with for sale signs and piles of grape vine ripped from the ground. Villa San Juliette in Paso Robles was available to purchase at $14 million. It sold during auction for $8.8 million. Gallo Wines is shuttering wine facilities. Last July they announced the closure of a 300,000 square-foot winery. Gallo purchased this property, the former Courtside Cellars, north of Paso Robles in 2012 .
Another Paso Robles winemaker (who created very nice bubbly) sold his property in 2023 shared his thoughts. Musing about the industry’s pain, he told us, “I feel like I slid out under the closing garage door just in time,” since he sold at the industry’s peak value.
We think many winemakers wish they slid out the closing door beside him. There is great, well priced wine out there in the marketplace.
Good, well priced wine awaits you. Go find it.
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.
(*2023-2024 sale declines as per WineBusiness.com)
