California's famed Napa Valley is in the grip of a severe economic downturn, with wineries closing facilities and laying off workers as Americans drink less wine. Industry leaders describe the situation as a 'perfect storm' of falling demand, changing demographics, and trade disruptions.
Natalie Collins, president of the California Association of Winegrape Growers, called it 'probably the worst downturn the industry in California has ever seen.' The crisis stems from a mismatch of supply and demand: pandemic-era booze consumption led to overproduction, but a shift toward healthier lifestyles and the rise of Generation Z have cut wine sales.
Since the start of 2025, five major producers have announced closures or layoffs. Gallo, the world's largest wine producer, is shutting its Ranch Winery in Napa Valley, cutting 93 jobs. Jackson Family Wines closed its Carneros Hills Winery in Sonoma, affecting 13 roles. Foley Family Wines and Constellation have also closed facilities, with Constellation reportedly laying off 200 workers.
Smaller vineyards are struggling too. Prestigious independent labels Ernest and Margins have stopped making wine entirely. The Boisset Collection closed two tasting rooms in Napa and Yountville. Many small producers are not required to report job losses, so the true scale may be worse.
The downturn is compounded by President Donald Trump's tariffs, foreign boycotts—particularly from Canada—and the lingering effects of wildfires and climate change. 'We are getting hit by a million different things at once,' Collins said. U.S. wine sales fell 1.6% in dollar terms in 2025 compared to 2024.
