By Jamie Martin
Wine spending in the United States reached a record level in 2025, exceeding $115 billion. Despite this growth in value, Americans are drinking less wine, continuing a multi‑year decline in consumption.
The 2026 BMO Wine Market Report explains that total wine market value rose by 3% in 2025, even as overall sales volume fell again. This trend shows that higher prices, rather than stronger demand, are driving market growth. As a result, wineries must work to attract consumers while also managing surplus inventory and tight finances.
California, which produces most of the nation’s wine, has reduced the amount of wine entering the market. Compared with a decade ago, California wine supply is down nearly 25%. Vineyard removals, smaller harvests, and a focus on avoiding oversupply have all contributed to this decline.
“What we’re seeing isn’t a pause — it’s a reset. Higher prices are keeping overall market value elevated, but they’re masking a structural slide in consumption: fewer people are drinking wine, and they’re doing it less often. At the same time, supply is shrinking, distribution is changing, and direct‑to‑consumer isn’t growing the way it once did,” said Adam Beak, Managing Director and Head of Wine & Spirits at BMO.
“Wineries that succeed in this next phase will be the ones that adapt how they price, package, and go to market, rather than waiting for consumers to come back on their own,” said Beak.
“The wine industry navigates a period of real adjustment. While higher prices have supported overall market value, many producers are facing ongoing pressure from softer demand, rising costs, and shifting distribution dynamics,” said Tony Sciarrino, Head, BMO Commercial Bank, U.S.
“As a commercial bank deeply embedded in the wine ecosystem, we’re seeing firsthand how important it is for businesses to adapt thoughtfully to these changes in order to remain resilient and competitive,” said Sciarrino.
Experts describe the situation as a turning point for the wine industry. While pricing has helped maintain revenue levels, fewer consumers are choosing wine, and competition from other beverages is increasing. Direct‑to‑consumer sales, once a strong growth area, have slowed as shipping costs rise, and buyers reduce discretionary spending.
Distribution systems are also changing. Many wineries report losing major distributors and are taking greater control of their own sales, using wholesalers more as delivery partners rather than primary growth drivers.
Consumer preferences continue to shift. In 2025, flavored wines gained popularity, while traditional sparkling wines lost volume. This shows that growth is becoming uneven across wine categories.
Even with these pressures, wineries remain cautiously hopeful. A majority expect the US wine industry to stabilize or recover within the next few years. The report suggests the future market will include fewer wineries, lower inventories, smaller harvests, and more innovation in pricing, packaging, and sales strategies as the industry adjusts to long‑term demand changes.
Photo Credit: pixabay-vinotecarium
Categories: National