The Glass Fire of 2020 devastated Newton Vineyard. One of Napa’s most picturesque wineries, Newton occupied a prime spot on Spring Mountain and was home to hillside vineyards as well as gorgeous English-style gardens and a striking winery. The flames killed most of the vines, destroyed the winery and took out the entire 2020 harvest.
Rebuilding the property was going to take several years and millions of dollars, but owner LVMH had plans to bring Newton back to life. Then last week, the company pulled the plug, announcing to wine club members that Newton was shutting down for good. (LVMH did not respond to requests for comment.)
The decision makes a lot of sense: LVMH owns other Napa properties, and the cost to restore Newton was going to be tremendous. Still, I suspect that if the fire had come 10 years earlier, LVMH wouldn’t hesitate to rebuild. Newton is both a victim of the flames and of the times.
U.S. wines sales have declined for four straight years, according to my colleagues at IMPACT Databank. The 2024 harvest was California’s smallest in 20 years, as growers left 100,000 tons of fruit unpicked, rotting on the vine. Tens of thousands of acres of vineyards are being pulled out. Industry analyst Rob McMillan calls it the biggest correction in 30 years in his latest annual “State of the Wine Industry” report for Silicon Valley Bank.
But let’s all take a deep breath. The next few years will not be easy for those who make their living growing grapes, making wine and bringing it to consumers. Still, there is plenty to be hopeful about, as well as plenty of work to be done. Wineries need to use this challenge as an opportunity.
Wine's Boom Has Been Fading for a Decade
The current tough times for wine are not exactly a surprise, but it’s been hard to really gauge the problem. No one wants to admit trouble is coming when American wine sales have had such a good run. And the pandemic obscured many problems.
In 2020, when we were locked away at home, U.S. wine sales grew 4.33 percent by volume, according to IMPACT. They’ve been falling ever since, including an estimated 2.4 percent decline in 2024. The pandemic created a surge of demand, then wreaked havoc with the supply chain. Wholesalers and retailers still have a backlog of inventory.
But as McMillan points out, IMPACT’s numbers show that wine sales have been slowing for a decade now. Growth was 5.19 percent in 2015, then less than 1 percent each year from 2016 to 2019. Retail sales of lower-priced wines began to decline around 2017. This was offset by sales of higher-priced bottles, but it was a warning sign. Now sales of wine at almost every price point are declining.
A Change in Wine Consumers
I would love to point a finger at the growing movement of neo-prohibitionists for the current dip in sales. They are not helping with their crusade to use cherry-picked data to claim that no level of drinking is safe, but their message really only started to gain traction with the general public post-pandemic.
In his analysis, McMillan points out that the last big correction in the wine market was in the 1980s. Yes, that was also the last time we saw vocal anti-alcohol groups. But the Reagan years were also a time of generational transition from the Greatest Generation to the Baby Boomers. When the Boomers entered their 30s and 40s, sales of wine began to surpass sales of spirits. Reports on wine’s heart health benefits accelerated that trend.
Now we’re in another generational transition: Boomers are getting older and retiring. Gen Xers drink wine, but are a much smaller group. Millennials are settling down and having kids, while Gen Zers are coming of age. Those two younger generations are not adopting wine in huge numbers. That’s the primary culprit in today's tough times.
[article-img-container][src=2025-02/mc_consumer-choices-drinks-022125_1600.jpg] [caption= Consumers have endless choices on store shelves these days—and this is just the beer section.] [credit= (Photo by Spencer Platt/Getty Images) ] [alt= Dozens of colorful beer cans on a store shelf.][end: article-img-container]
How Can Wine Stand Out?
I remember when I first got serious about wine. Bill Clinton was in the White House and, at the store near my university, my choices were mass-production beers and maybe one dusty six-pack of imported lager. The spirits aisle was populated by big-production names. The wine aisle was the only one with a lot of different options. Craft beer was just starting to pick up steam, the classic cocktail renaissance was years away, and George Clooney was a guy on that new E.R. show, not a Tequila tycoon.
Today, go into a store and young consumers have endless choices. Artisanal spirits, goses and sours in the beer aisle, hard seltzers, hard lemonades, hard teas, ready-to-drink cocktails, THC seltzers … or they can just opt for cannabis gummies washed down with a probiotic soda that claims to improve their gut health.
It’s hard for wine to win new consumers when it can’t even win their attention. And think about the things that make wine special: tradition, complexity and a special talent for pairing with food. How do you get that message across to a consumer looking at rainbow-colored cans of bubbly THC?
Turning Wine Around
McMillan ends his report on a hopeful note. “Wine is what younger consumers want. They just don’t know it. But wine’s characteristics fit the bill—green, plant-based, natural, minimal additives, no added sugars, often organic and more—all align with younger consumers’ values.”
He’s absolutely right. But wineries can’t wait for younger consumers to wake up and smell the Ribolla Gialla.
[article-img-container][src=2025-02/mc_vines-pulled-022125_1600.jpg] [caption= A pile of pulled vines waits to be burned in a Lodi field. California vineyard acreage is being reduced, but there’s no reason it can’t rise again.] [credit= (Photo by Gina Ferazzi / Los Angeles Times via Getty Images) ] [alt= A pile of dead vines in a Lodi field.][end: article-img-container]
Their challenge is to both lean into wine's strengths while also trying new ways to place their products in front of those consumers. There will always be a place for a bottle containing six glasses of wine best enjoyed with a group at a meal. But how often do younger consumers drink in that setting? Winemakers need to ask themselves, "How can I make sure younger consumers are seeing my wine? And how can I make it an option for more situations? How do I offer them wine that excites them and still stays true to wine’s roots?" Change isn't necessarily a bad thing: 400 years ago, the idea of selling wine in glass bottles was a novelty.
Here's another challenge—wineries need to be seriously asking themselves what price points make sense for these younger consumers, who do not have the same financial resources as Boomers. Are you meeting them where their wallets are?
The current correction will not last forever. I got an email from Angelo Gaja this morning and, as he often does, he energetically put things in perspective. “Noah, in Genesis, after surviving the flood and descending from the ark, first planted the vine so that wine could be enjoyed in company as sustenance and joy.” Wine is not going anywhere. This too shall pass.
The question is: What will wineries do to own the recovery?
For more wine industry news, visit Shanken News Daily.
