California Wine Grape Glut Forces Growers to Rip Out Vineyards as Demand Plunges

California's wine country is facing a harvest unlike any in recent memory: too many grapes and too few buyers. Changing drinking habits have caused demand to plunge, forcing growers to leave fruit on the vine, sell at a loss, or tear out vineyards their families have tended for generations.

Wine sales have fallen more than 20% over the past five years, driving down grape prices and prompting California growers to take roughly a quarter of the state's vineyards out of production. Many now face a difficult choice: harvest at a loss, abandon the crop, or replace vines with more profitable crops such as almonds, walnuts, pistachios and olives.

"It's just sickening," said Bill Berryhill, a third-generation grower, standing among unsold merlot vines at his family's vineyard near Lodi in the San Joaquin Valley. "You raise a beautiful crop, and it's really a nice vintage this year, and you drop it on the ground. It's sad. All your work is just down the toilet."

Berryhill, 68, owns Berryhill Family Vineyards, where he farms 500 acres. He can't find buyers for grapes on 200 of those acres and plans to remove 50 acres once harvest ends. "I will lose money for sure. It's just a matter of how much," he said. "This has been a big loser for three years now."

At its pandemic-era peak, California had nearly 600,000 acres of vineyards. Farmers have since removed or stopped actively farming roughly 25% of that land, according to Jeff Bitter, president of Allied Grape Growers, which represents about 500 farmers statewide. This year, about half of California's wine grape crop entered harvest without buyer contracts, compared with 70% to 80% in a typical year, Bitter said. Growers lucky enough to find a buyer for uncontracted grapes often sell at a loss to producers who turn them into concentrated syrup, which barely covers production costs.

"The market is just so depressed that it's difficult to grow them profitably," Bitter said. "Demand is not going up. It's still continuing to decline."

The surplus extends well beyond one vineyard. Kyle Collins, a Lodi-based operations manager for Allied Grape Growers, recently inspected ripe petite verdot grapes in one of the region's vineyards. "Unfortunately, we do not have a buyer for these grapes," he said. "That's unfortunately a reality for not just this vineyard but a lot of us around here." The fallout extends to local economies, Collins said, reducing wages for field laborers and hurting businesses that depend on the harvest season.

The downturn marks a stark reversal for California, which produces more than 80% of U.S. wine thanks to its climate and geography. For decades the industry grew steadily as Americans developed a taste for cabernet, zinfandel and chardonnay, with Napa and Sonoma producing premium vintages while the Central Valley supplied grapes for less expensive labels. Sales peaked during the pandemic in 2021, when closed restaurants and restricted gatherings drove people to stock up on wine for home consumption.

Since then, the decline has been steep. U.S. wine case sales fell 23%, from 427 million in 2020 to 329 million in 2025, while total wine spending dropped 22%, from $94 billion to $74 billion, according to the First Citizens Bank State of the Wine Industry Report.

California can't simply export its way out of the glut. Global wine consumption fell 2.7% in 2025 compared with 2024, and 14% since 2018, with the steepest declines in Europe and China, according to the International Organization of Vine and Wine. Because U.S. production costs exceed those of exporters like Argentina and Australia, California struggles to compete abroad.

Several forces are driving the decline. Baby boomers, long the industry's core customers, are aging out of the market, while younger people are drinking less due to health and financial concerns. Wine also faces stiff competition from craft beer, spirits, canned cocktails and cannabis. Tariffs have further hurt exports, particularly to Canada, previously the largest foreign buyer of American wine.

"The kids just aren't drinking as much," Berryhill said. "And it's not just wine, it's whiskey and beer and everything. And then you've also got the competition with all the seltzers."

"The next step in the healing process is not only balancing supply and demand, but now actually figuring out what it is that the other consumers want," said Rob McMillan, chief wine strategist at First Citizens Bank.

The industry hopes the market will bottom out soon, but for now, growers like Berryhill are absorbing heavy losses to stay afloat. His grandfather started growing grapes nearly a century ago, and despite the mounting costs, Berryhill says he isn't ready to give up on wine.