Wine industry faces another difficult year in 2026
The US wine industry may not improve for another two years, according to a recent analysis by Silicon Valley Bank, released on Jan. 15.
The US wine industry will not bottom out until 2027-2028, the report concludes. Sales must first improve, reducing wholesalers’ wine oversupply before the industry can recover. The wine industry decline should flatten slightly in 2026, according to the report.
“I expect that we’ll still have negative results for the year, but there will be some improvements,” Rob McMillan, executive vice president and founder of the wine division at Silicon Valley Bank, said during a virtual panel.
Wine sales, which peaked in 2020 during the pandemic, are expected to total $73 billion or 1.62 percent less than in 2025. That represents 322 million cases of 9 liters in volume, 2 percent less than in 2025.
The industry will not take off as it has in the past after it bottoms out, McMillan said. Alcohol consumption is not going up, and younger consumers are drinking less alcohol across multiple categories.
Grape growers continue to struggle to find contracts in spite of vineyards being pulled and a short 2025 harvest. More acreage needs to be pulled statewide, observers have said repeatedly. About 40,000 acres were pulled over the past year, according to the California Association of Winegrape Growers.
California’s 2025 harvest is estimated to total below 2.2 million ton. In 2018, a record 4.28 million tons of grapes were crushed statewide.
In Napa, about 20 percent of vineyards went unharvested in 2025, according to Allied Grape Growers. More than 3,100 acres of local vineyards were removed between October 2024 and August.
“The best we can say is the light harvest won’t make the situation worse,” the Silicon Valley Bank report observed.
The industry expects more wineries, vineyards and brands to change hands at discounted prices.
Sellers need to recalibrate their expectations, said Kristin Marchesi, managing director at Metis Mergers and Acquisition, who spoke at Silicon Valley Bank’s virtual panel.
Sellers may expect to be able to offer a 10 to 15-percent discount to sell. In reality, owners in well-respected American Viticultural Areas need to consider a 20 to 25 percent discount. The others may reach deals at 40 to 50 percent less than in 2021.
“If you’re trying to maximize your exit value, then maybe you should wait, but we don’t know what you’re waiting for,” Marchesi said, adding that owners who do not want to sell must invest in their business “towards profitability.”
The best thing wineries can do is work on their business, she said. Buyers are looking for “asset-light brands” that may not include real estate, she added.
The most powerful exit may be winding the brand down and selling the assets or finding someone locally who loves the winery and wants to carry it on, she said.
In any case, McMillan urges his customers to have their financial records in order.
In the meantime, premium wines are expected to continue to sell better than lower-priced wines. Still, this category is not immune to consumer habits. Wineries must have new “paths to promote and sell wine,” according to the report.
Premium wineries will continue to face weaker wine club retention, inflation, a slowdown in affluent consumer spending and shifting priorities.
Rombauer Vineyards tries to focus on the consumer and generate fans, said Matthew Owings, vice president and general manager at Rombauer Vineyards, who also took part in the Silicon Valley Bank panel.
They do it by offering “great wine,” a “personal touch” and creating a “personal connection” with consumers, Owings said.
Another panelist, Janie Brooks Heuck, managing director at Brooks Wine in Amity, Oregon, said Brooks constantly reinvents events. She sends an email about news from the winery to keep people engaged.
Silicon Valley Bank’s state of the US wine industry is available at: https://bit.ly/49JDZhJ
