Under the Hood: From Boom to Mature — Napa County Grapples With an Uncharted Future
By Tim Carl
Today’s Under the Hood Spotlight
Welcome to Under the Hood, our exclusive Saturday series for Napa Valley Features paid subscribers.
Today’s Under the Hood Article Summary: Napa County’s wine industry has entered a mature phase, with growth flattening and signs of long-term contraction emerging across consumer demand, pricing and retail access. At a recent joint meeting of supervisors and planning commissioners, industry experts presented data showing that even high-end Napa wines are no longer insulated from broader declines. While some leaders leaned on familiar marketing narratives, others acknowledged the need to adapt — shifting from expansion to stabilization and diversification. The article highlights that moving beyond denial and into acceptance is Napa’s best chance to build a durable, future-ready economy not solely reliant on wine.
Beyond today’s discussion, we’re also diving into the latest data from our readers’ polls and providing insights from our economic dashboard, covering local Napa Valley, U.S. and global markets.
“What We’re Reading” features excerpts from recent articles offering a range of perspectives on topics shaping our community and the wider world. A new section at the end, “Visuals That Caught Our Eye,” spotlights compelling charts and graphs that stood out this week.
“What We’re Reading”: Excerpts of the Day
"Stroud [identified as 19-year-old, William Stroud Jr., of Napa] was booked into the Napa County Department of Corrections for the following offenses: 664/187(a) PC- Attempted Murder, 186.22(a) PC- Participation in Criminal Street Gang, 186.22(b)(1) PC- Felony Offense for Benefit of Criminal Street Gang." – from Lieutenant Brett Muratori, in "Shooting Investigation- Arrest," City of Napa Police Department.
"There are some cool, fun little places here [Calistoga], but I wouldn’t necessarily call it a food destination right now. I think we’re going to change that.” – from Erik Anderson, in "Napa Valley will get two new restaurants from a French Laundry alum," San Francisco Chronicle.
“It’s more important than ever to reach new audiences and invite them to experience Napa Valley wines.” – from Shannon Muracchioli, in "Napa Valley Expands Its Reach to New Consumers Through Major Culinary and Global Sporting Events," Wine Industry Advisor.
“What hurts more is that this could've been avoided.” – from Jasmin Ricardo, in "REPORT: Six Men Killed In Napa County Van Crash Identified," Patch. Six farmworkers from Stockton were killed in a Napa County crash when their van struck a tree, leading to 13 felony charges — including six counts of murder — against the driver, Norberto Celerino, who had multiple prior DUI convictions.
“I am committed to working with allies of the hemp industry, including the Wine & Spirits Wholesalers of America, in this effort to urge House leadership to remove concerning language from the FY26 Ag-FDA Appropriations Bill—and any final FY26 appropriations legislation—that arbitrarily redefines legal hemp.” – from James Comer, in "WSWA, Hemp Industry Thought Leaders Host Successful Day of Advocacy on Capitol Hill," WSWA.
“Any deterioration in the labor market bears watching given growing labor-market weakness.” – from Eliza Winger, in "US Initial Jobless Claims Jump to Highest in Almost Four Years," Bloomberg.
"I think there is not a shred of evidence to believe that there’s any political bias in the data and there’s not a shred of evidence to believe the data are being manipulated in any way for any reason." – from Michael Strain, in "U.S. employers added 911,000 fewer jobs than first reported, new BLS data shows," The Washington Post.
“What’s going to save the planet is winning the A.I. arms race. We need power to do that and we need it now.” – from Doug Burgum, in "Climate ‘Ideology’ Hurts Prosperity, Top U.S. Officials Tell Europeans," The New York Times.
“Each one of these carbon majors is contributing to heatwaves, making them more intense and also making them more likely.” – from Yann Quilcaille, in "Heatwaves linked to carbon emissions from specific companies," Nature.
“Protecting kids online is a top priority for the Trump-Vance FTC, and so is fostering innovation in critical sectors of our economy.” – from Andrew Ferguson, in "Alphabet, Meta, OpenAI, xAI and Snap face FTC probe over AI chatbot safety for kids," CNBC.
“I’ve never cried more as a scientist than in the last six months.” – from Nicole Maphis, in "Scientists take on Trump: these researchers are fighting back," Nature.
From Boom to Mature: Napa County Grapples With an Uncharted Future
By Tim Carl
NAPA VALLEY, Calif. — At a rare joint session of Napa County supervisors and the planning commission on Sept. 9, the mood was cautious and unmistakably serious. The topic: the future of Napa Valley’s wine economy.
“This isn’t about policy today,” Supervisor Anne Cottrell said as she opened the meeting. “It’s a chance for us to learn.”
Well-Rehearsed Talking Points
Linda Reiff, CEO of Napa Valley Vintners, opened the session with lines honed over years.
“Ninety-five percent [of Napa Valley wineries] are family owned and operated,” she said. “In fact, we produce only 4% of California wine but obviously have a huge economic impact.”
Those figures sound reassuring, but they blur important realities. “Family-owned” in NVV’s telling includes global giants such as Gallo, Trinchero and Jackson Family. Napa might produce only a fraction of California’s wine, yet it holds about 28% of the state’s type 02 winery licenses — a volume of labels that waters down the exclusivity and narrow brand identity the “4%” claim is meant to project.
Reiff also pointed to $11.7 billion in economic activity in Napa County and $500 million in annual local taxes ($437 million in their report) as evidence that the industry remains the county’s central pillar. But with Napa County’s GDP in 2023 at $14.2. billion, those figures underscore something else: a community that has become heavily reliant on a single sector. And by the NVV’s own data, that sector has shifted from expansion to maturity — a stage defined not by renewed booms but by flat or declining growth.
That reality became clearer in the numbers that followed.
The Data Shock
Dale Stratton of Azur Associates outlined macroeconomic trends that show the wine industry slipping from growth into contraction. U.S. winery growth, which averaged more than 5% annually through 2020, has now flattened and turned negative. In 2024, the number of licensed wineries fell 1.5% nationwide, with California hit harder at 4.4%.
Total U.S. case volumes peaked in 2018 and have drifted downward ever since, a reversal after decades of steady growth.
Direct-to-consumer shipments, once a lifeline for Napa producers, have declined for three straight years.
Even the premium tier is no longer insulated. Bottles priced above $50 were essentially flat last year, and sales of $100-and-above wines — Napa’s strongest category — fell 3% for the first time in more than a decade.
Behind those headline numbers is a more sobering reality: The beverage alcohol “pie” is shrinking and fragmenting. The number of wine drinkers in the United States has held steady and even grown by their calculations (Note: Napa Valley Features has shown that the numbers of wine-preferring adults has actually decreased in recent years, see, “Under the Hood: As America Drinks Less, Napa Feels the Squeeze”), but even so they show that the wine-buying frequency has dropped sharply. Average annual purchase occasions fell from 12.1 in 2022 to 11.3 in 2023 and are projected to dip below 10.6 in 2024.
At the same time, the on-premise world has tilted away from wine. Since 2017, fine-dining establishments — historically the backbone for high-end bottles — have fallen 36%, while fast-casual and quick-service restaurants grew 60%. Casual dining is down 7%. In short, wine’s best showcase is contracting while fewer wine-friendly venues are expanding.
Retailers are also trimming their offerings. Liquor stores, groceries and mass merchandisers have all reduced wine SKUs (stock-keeping units, individual products), with dining and club stores cutting deepest. Stratton called it “a contraction across multiple points of access” — fewer opportunities for consumers to encounter and buy wine.
“We’re selling more wine but at dramatically lower prices,” he said. “That money comes straight out of the bottom line of family wineries.”
He added that headwinds extend beyond consumer demand. Inflation, rising interest rates and household debt have squeezed both wineries and buyers. On top of that, cultural pressures are mounting.
“We are in another period where there’s a lot of anti-alcohol voices out there,” Stratton said, pointing to the fight over federal dietary guidelines.
Craig Underhill, a longtime industry accountant, stripped the romance out of Napa’s luxury family winery image.
“This whole concept of every winery being a gold mine is a myth,” he said.
Breaking down a $100 bottle, he showed that after farming, production, sales, marketing, administration and reinvestment, what’s left is a single dollar.
A typical 5,000-case winery might gross $3.6 million — but clear only $36,000. Even at scale, Underhill said, average margins for small wineries run at about 3%, leaving little cushion when sales soften or costs rise.
Richard Mendelson, one of the country’s leading wine law experts, layered on the regulatory reality.
“We have concurrent state, federal and local jurisdiction,” he said. “You can’t just comply with one level. You have to comply with all of them.”
Every state imposes its own licensing, labeling and trade-practice rules — a patchwork rooted in Prohibition that still dictates how wine is sold. Navigating that complexity adds another layer of cost for wineries, especially small producers.
Michelle Novy, NVV’s in-house counsel, closed the session by pointing to the group’s role in both environmental leadership and philanthropy. She highlighted the Napa Green certification program as a model for sustainable winegrowing and noted that since 1981 NVV has raised more than $245 million in philanthropic fundraising. The beneficiaries are broad — hospitals, clinics, mental health programs, wildfire recovery — but the guiding interests and the way funds are distributed remain largely with vintner members. NVV is, at its core, a promotional body, and its philanthropy is closely tied to the health of its members.
And although Novy’s portion of the presentation underscored what appears to be a positive and unassailable aspect of the NVV’s mission, the limits of the model become clearer in a contracting economy. When times are strong, fundraising is easier and the system works smoothly. But when conditions tighten, the inherent challenge of having a promotional organization direct community-scale investments comes into focus. Projects launched with NVV funding can leave behind infrastructure and programs that require long-term support, and once NVV steps away, those costs often fall back on local institutions and taxpayers.
The tension between well-rehearsed talking points and the harder economic realities set the stage for a larger question: What happens when a boom cycle runs its course?
From Boom to Maturity
Every growth industry follows the same curve. It rises, peaks, declines and will eventually begin to level off. What happens after the peak is remarkably predictable. Communities first cycle through denial, blame and bargaining as they try to recapture past growth. But the ones that succeed go further, into acceptance — the phase that allows them to adapt and stabilize.
Think of it like a small-town football star. At home they played every position, scored all the points and everyone cheered. On the world stage, however, they discover they’re just another — albeit very good — player. The skills that made them great in the early days aren’t enough anymore. They can deny it, blame the competition or bargain for easier rules. Or they can accept reality — improve their existing talents, learn new skills, adapt to the level of play and focus on what might allow them to compete in a changed world.
These predictable stages have appeared everywhere: in steel, ski and spa towns, tobacco and gambling towns, and oil and coal country. They also appeared in Hollywood, where growth slowed decades ago. The industry never boomed again, but it adapted — first by going global, then by reinventing itself through streaming. That shift didn’t restore the past, but it built a new, durable plateau.
In Napa, the response to contraction has often looked like this:
Denial and Disbelief: More marketing will fix it. Spend more, talk louder, repeat the lines that worked in the boom years.
Blame: Outside forces are at fault — competitors using Napa’s name, regulators piling on rules, “anti-alcohol voices” injecting uncomfortable health data into the conversation.
Bargaining: Soften the Ag Preserve, ease winery approvals, allow exceptions. The hope is that more volume will offset declining demand, even when the economics show otherwise.
But Napa has the opportunity to move more quickly into acceptance and adaption — a phase that acknowledges maturity and with it the chance to focus on building something durable.
Acceptance and Adaption: Recognize that the boom years are gone and that attempts to re-create them through more marketing, weakened regulations or chasing volume over quality only erode the foundation. Acceptance means adapting to a changed environment, building new skills and investing in the future — high-value jobs, innovation and a diversity of sectors that can sustain the community beyond the boom.
From the Bench: Hints of Acceptance
Supervisor Amber Manfree captured the moment bluntly.
“This is a great time for creativity, innovation and for thinking hard about possible futures that don’t look like something we’ve seen before,” she said.
Dale Stratton, the NVV’s industry analyst whose data framed the discussion, reminded the room that the long run of expansion is over.
“The wine category has been on a tremendous growth, right?” he said. “If you think about a 20-year-plus growth rate, it’s fabulous, and we’re all very thankful for that. But we’re a mature category now. Our growth has plateaued, and for the medium and long term we’ll be a mature category. It is unlikely we’re going to experience great growth rates.”
Planning Commissioner Walter Brooks pressed the question others avoided.
“If Napa has shifted from decades of rapid growth into a mature industry, does that mean we’re stabilizing at the current level of wineries rather than expanding?” he asked. “And if so, how should we think about regulating growth in that kind of environment?”
Supervisor Liz Alessio added a note of urgency.
“We are also going to feel what is coming down the pike in terms of the challenges that we’re going to face,” she said. “I do think there is a tsunami of financial concern that is going to catch up with us, just based on what’s happening.”
These were notes of acceptance in a room otherwise leaning toward denial, blame and bargaining. They underscored why the meeting mattered: For perhaps the first time, supervisors and commissioners are beginning to acknowledge that another boom in Napa’s wine industry is unlikely to materialize and that flat or declining growth within the sector is likely to continue for the foreseeable future.
The Path Ahead
Reiff’s well-rehearsed talking points may still carry historic weight, but they no longer fit today’s reality. Stratton’s macro trends, Underhill’s bottle math and Mendelson’s regulatory labyrinth all point to the same conclusion: Napa’s wine-centered economy has entered maturity, and the old growth narrative no longer matches the facts on the ground.
The wine-boom years are over. That’s what the data show. Napa now has the opportunity to move into the acceptance phase of this predictable cycle — to adapt rather than deny, to focus on quality over quantity and to stabilize at a level that sustains the community.
If supervisors, commissioners and other local leaders could ask one question of every new project — How will this create or sustain well-paying jobs that allow individuals and families not just to survive but to thrive in Napa County, today and for generations to come? — then acceptance will have taken root. More than that, it would signal the courage to envision a future where families can once again flourish in Napa Valley, even as the industry that defined it settles into maturity.
What comes after acceptance is not despair but the chance to build something durable — an economy and community not solely defined by tourist counts or wine-brand registrations but by how many people can make a living here, how many families can thrive here and how many can build their future here at home.
When the Boom Ends
Communities built on a single growth industry often follow familiar cycles. After the peak, most move through denial, blame and bargaining in an effort to restore what’s gone. Few reach acceptance — but those that do adapt and stabilize, even if never at the level of the boom.
Spa towns, United States and Europe
Built fortunes in the 19th and early 20th centuries on the belief that mineral waters could heal. When science and fashion moved on, most never recovered. A few reinvented as wellness or convention centers, but the majority became relics.Catskills resorts, New York
Once packed with families and entertainers, these resorts collapsed as air travel shifted vacation patterns to Florida and abroad. Decades of decline followed. Only recently has there been modest reinvention through boutique hotels and outdoor tourism, though never at former scale.Las Vegas casinos, Nevada
Once dependent on gaming alone, Las Vegas saw its dominance eroded by tribal casinos and online betting. The city adapted by diversifying into entertainment, dining and conventions. Gambling no longer defines it, but the reinvention allowed stability on new terms.Hollywood
Growth slowed by the 1980s. The industry never boomed again, but it adapted — first by going global, then by reinventing itself through streaming. It found a new level, different from the past, but sustainable.Tobacco towns, Southeast United States
Consumption fell more than 40% between 1980 and 2020. Most towns doubled down on denial and lobbying. Few diversified. Many never recovered.Coal country, Appalachia
Coal jobs dropped from about 180,000 in 1985 to fewer than 40,000 today. Communities that blamed regulation instead of market change remain mired in decline.Steel towns, Midwest
Once booming, U.S. steel collapsed in the 1970s and 1980s. Pittsburgh lost nearly half its population. Only after decades of diversification into medicine, technology and higher education did the city stabilize — not at its old peak, but on a new plateau.
Lesson: Industries rarely bounce back once structural change sets in. Denial prolongs the pain. Acceptance — and the shift to adaptation, quality and diversification — offers a path to stability.
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Tim Carl is a Napa Valley-based photojournalist.
Today’s Polls
Recent Poll Results
In Tim Carl’s article "Under the Hood: Why Napa’s Demographics Point to Contraction, Not Growth," demographic and economic data revealed that Napa County’s current growth model is failing. The region’s population pyramid is top-heavy, with an aging population and few young families, while its wine-based economy is showing signs of long-term contraction. The data challenged the assumptions behind current demographic expansion efforts. Reader polls reflect concerns about Napa’s future, highlighting fears of economic stagnation, high housing costs and declining connections to the region. The results point to broad support for rethinking current strategies and recognizing the limitations of the county’s aging structure.