Summary: Though the wine industry has faced declining sales, surplus inventory and vineyard losses in recent years, several signs point to an improving marketplace. The removal of lower-quality vineyards has raised overall grape quality, while slower sales have allowed wines more time to mature in bottle. Consumers may benefit from better wines at lower prices, particularly from second-label offerings and recent cooler vintages. At the same time, pushback against high tasting room fees and shifting consumer habits are prompting wineries to adopt more competitive pricing and creative outreach.
NAPA VALLEY, Calif. — Amid the misery that has befallen the wine business in recent years are some encouraging signposts that provide some of the best news of recent years, which the industry really needs.
In talking with wine people about the current worldwide wine-sales decline, the phrase “silver lining” was used more than once — but this is no mere vague hope. In any bleak situation, something positive often lurks. But some of those positives may be invisible to folks who are hurting the most. Gloom usually rules, but a light is shining.
In this instance, the wine industry appears poised for a significant rebound as time begins to heal some of the scrapes and contusions. It may take another year or so, but indications are that the industry may recover sooner than many people say.
“Savvy consumers are in for a treat.” — Dan Berger
It is true, of course, that it’s easy to blame outside forces for much of the pessimism many wineries are exhibiting. These might include those who drink less because of the medical drawbacks of wine consumption, an entire generation reducing its interest in anything with alcohol and the rise of alternative beverages. And of course there are higher prices due to tariffs and other market forces.
Any analysis of where the problems came from is immaterial, but California wineries and importers combined decades ago to create a situation (raising prices too fast without any consumer education) that inevitably created problems. When the bubble burst, it affected everyone.
Decades ago, wineries were unique entities. They were small in number, but the lifestyle they theoretically offered (sybaritic, congenial, pastoral) was enticing, and it brought lots of people from other walks of life into the game with capital and visions of fiscal success.
Too soon most of them learned that winemaking was (a) expensive, (b) required hard work, (c) was fraught with nasty problems and (d) wasn’t as lucrative as they had heard.
But the industry is seductive, and for years the public was mesmerized by wine’s romance and was willing to pay more and more for wines that were high-scoring, packaged beautifully, marketed with aplomb and advertised as lifestyle-enhancing. Cheaper than a yacht or a McLaren, wine was many people’s tickets to ostentation. Fancy bottles were baubles. And many wineries knew it. So prices escalated.
During the headiest days of the late 1990s, a successful cabernet winemaker confided to me, “When I have a cab that I can’t sell, I just raise the price and tell people they can only buy two bottles of it. It works every time.”
With demand for many elite (i.e., high-scoring) wines rising rapidly, the industry simply became overheated. Prices rose faster than was logical. And most consumers didn’t fight back. As a result, production increased. But as inventories backed up in warehouses, discounting was required by the winery, the wholesaler or the retailer — or all three. And very few discounts were offered.
Two years ago a wine industry analyst told me, “This can’t keep going the way it is. Everyone is going to hit the wall.” He was right.
In 2024 and then again last year, analysts estimated that roughly 30% of the grapes grown in California specifically for wine were not picked because of no demand. Prices for wine grapes collapsed. Even some Napa growers lost money. Wineries saw inventories increase. Wholesalers struggled. Dozens of wine companies, from large to small, closed their doors. Tasting rooms closed.
So where is the good news?
Several factors must be assumed to understand why things are poised to get significantly better for many people, and it may still take another year or two before the shakeout has completed its renaissance. But one thing is certain: Savvy consumers are in for a treat.
Scenario One: Consumers will find that many wines today are better than they have been for several years, and for cogent reasons. Of the 40,000 acres in California that most industry experts say have already been removed, almost every grower who did so chose vines that were of lesser quality or that underproduced. Remaining vines were generally of better quality.
Scenario Two: With wine sales so slow, a lot of wine is sitting on store shelves for months longer than normal. In most cases, this allows the wines to improve in the bottle. Far too many wines have traditionally been released a lot sooner than they should have been to optimize quality. This includes white wines as well as reds. Most fine wines benefit from a little additional time.
Scenario Three: With roughly 30% of the wine grapes that were growing in 2025 ending up without a home, wineries were figuratively in the driver’s seat when it came to quality and price. With some extremely high-quality grapes available at weak spot prices that dropped and with wineries reducing how much wine they were producing, the quality of everything that was made available to producers was higher than average.
Scenario Four: We have already seen some sane pricing on “second-label” wines, many of which are better in quality than they have ever been.
Scenario Five: The 2023 and 2025 harvests were cool, a nice respite from some of the warmer vintages of the recent past such as 2022. Since consumers seem interested in lower alcohol levels, most of the 2023s and 2025s will deliver more appealing wines than were recently available.
Today’s word puzzle:
Challenge your vocabulary with this week’s mystery word. Submit your answer in the poll, and check the bottom of the page for the correct answer.
Other Factors:
Discounts: Since wine sales have been so slow, discounting figures to increase, and not only at the retail store. Wineries are already offering special wholesale pricing, and wholesalers are concerned about increasing inventories. Anecdotally, I hear that wholesale deals are being offered that should benefit consumers.
Tariffs: The president’s erratic tariff strategy (on/off/on, high/low) has left literally dozens of U.S. businesses in a state of limbo, not knowing what to charge for products they are importing or even if they should continue to offer such items. Imported wine has fallen under this scheme.
One importer I know said he was not only confused but angry about having to pay additional fees for products that he agreed to buy several months ago, well before the tariffs were even mentioned. “It’s ridiculous,” he said, “I don’t even know what to charge. And I can’t afford to absorb the tariffs. And my shipping costs are going up.”
However, even here there may well be more good news. Well-financed Costco Wholesale in Kirkland, Washington, and others are now suing the federal government for tariff refunds. Many wine importers are hoping to get back some of the money they paid out already.
Tasting Room Fees: Charges in most North Coast tasting rooms rose significantly since 2020 as a consequence of a “follow the leader” mentality. But starting about two years ago visitors on a budget rebelled against what they called outrageous pricing and began cutting back on visiting.
The Wine Searcher website reported this week that Napa Valley tasting rooms, which had an average fee of $266, has lost approximately 24% of their tasting-room revenue since 2023. And that is enormous since premium wine producers rely on direct-to-consumer sales for 80% of their revenue. That revenue drops significantly when tasting room visitors decline.
Moreover, it figures to get worse this summer as the word has been more widely disseminated that certain Wine Country areas are simply overblown in terms of fees, not to mention hotel rates, rental car fees and food/wine at quality restaurants.
Some savvy wineries have decided to fight the trend in creative ways. Sonoma County’s Kendall-Jackson and the affiliated La Crema brand begin offering complimentary mini tastings (three wines) with snacks between 2 p.m. and 6 p.m. every Thursday from Jan. 15 through the end of March.
I spoke with one industry analyst who cautioned that universal cutting of tasting-room fees might work temporarily, but he said it’s one thing to make tasting fees more reasonable briefly, but if fees go back up significantly, some consumers may get stung by the higher pricing if there’s no explanation for why the fees rose again.
The preceding analysis indicates that consumers will find better-quality wines at slightly lower prices for the foreseeable future. But since a lot of previously marginal consumers have turned their backs on wine and have switched to alternative beverages, not as many people will notice the improvement in quality and value.
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Dan Berger has been writing about wine since 1975.
Wine Discovery:
2023 Markham Vineyards Sauvignon Blanc, Napa Valley ($24, 10,850 cases)
The cooler 2023 vintage gave Markham a chance to get some of the bright sauvignon blanc from cool Oak Knoll down valley and blend it with warmer fruit to get a stylish and youthful white wine that has a scent of lime and a trace of passion fruit. There is lovely food compatibility based on a balanced structure. The mid-palate is rich if served cool; served colder it is crisper. As with many Napa Valley SBs, it should be better in two or three years — though, sadly, almost nobody ages sauvignon blanc. — Dan Berger Review
Made by Kimberlee Nicholls, an experienced Napa Valley winemaker, this stainless-steel fermented sauvignon blanc highlights a mix of fruit from cooler sites like Oak Knoll and warmer sites like Pope Valley. Aromas of kaffir lime leaf, lemon curd and tarragon lead into a bright palate with wet stone minerality and a clean, crisp finish. Juicy and textured, it holds 13.8% alcohol with 0.70 g/100 mL acidity, offering both richness and lift. Serve with goat cheese tart, Thai green curry or smoked salmon. — Tim Carl Review
Today’s Polls:
This Week's Word Challenge Reveal:
Correct Answer: E. Self‑breakdown of yeast cells
In winemaking, autolysis is the natural process by which yeast cells break themselves down after fermentation is complete. As wine rests on the lees (the spent yeast and other sediment), these cells gradually decompose and release compounds such as amino acids, polysaccharides and mannoproteins that can enhance texture, body and flavor complexity. Winemakers often encourage autolysis during sur lie aging of sparkling wines and some white wines to build creaminess, brioche‑like aromas and a richer mouthfeel.
The term “autolysis” comes from Greek roots: auto meaning “self” and lysis meaning “loosening” or “dissolution.” It was adopted into scientific language in the 19th century to describe cells digesting themselves with their own enzymes and later became a key concept in enology, where it refers specifically to yeast breakdown during aging and its impact on wine style.
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As a wine shop manager in Ohio I have yet to see any drop in California wine prices. In fact, just the opposite has happened. Wineries experiencing lower sales have increased prices to keep the revenues steady. Far Niente just implemented a 12% price increase! Far Niente!
What an excellent and informative article. I generally don’t drink alcohol but will make an exception and “taste” if my host has convinced me that it is an exceptional wine.