California Wine Production Drops To 1999 Levels

22 Oct California Wine Production Drops To 1999 Levels

This year has seen the output of California wine drop 17.1% to 508.2 million gallons, the lowest since 1999, with U.S. production falling 15% to 647.7 million gallons, the lowest since 2004.

This represents the steepest single-year production collapse in over 30 years, surpassing the decline experienced during the Great Recession of 2005-2008, when volumes fell approximately 15.6% in California and 13.2% across the U.S.

Looking ahead, the future is steeped in uncertainty. Pending the trajectory, the U.S. wine industry could contract by $3 billion to $27 billion per year compared with the $106 billion value reported in 2024. For California, the loss is $5 billion to $24 billion per annum. Napa, whilst only producing approximately 4% of the state’s gallons, carries disproportionate weight in premium markets and could face 1-5 billion dollars in lost retail value each year.

If this was to eventuate, these contractions in the size of the market will inevitably reverberate through associated sectors such as growers, packaging, vineyard teams, logistics providers, taxes, local economies and more, as wine producers attempt to balance thin margins, weak demand and market volatility.

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