US Wine market sees shift to lower-priced bottles as oversupply drives discounts

Recent sales data from the first quarter of 2025 indicate a shift in the U.S. wine market, with consumers increasingly opting for less expensive bottles, particularly in the Cabernet Sauvignon category. According to SipSource, both wine revenue and volume dropped by about 10 percent compared to the same period last year, but revenue fell 0.6 percent more than volume. This suggests that while people are still buying wine, they are spending less per bottle.

Dale Stratton, an analyst at SipSource, attributes this trend to several factors. White wines, which tend to be cheaper than reds, are outperforming their red counterparts. Sparkling wines priced above $20, excluding Prosecco, are struggling significantly. Most notably for high-end producers, premium wines are being sold at discounts. Stratton notes that for wines priced at $50 and above, sales volume actually increased by 3.3 percent from December through March, but revenue from these sales dropped by 5.4 percent. This means consumers are purchasing more high-end wines but at lower prices.

Stratton points to an oversupply issue as a key driver behind these discounts. In California, Cabernet Sauvignon is the most widely planted grape variety—double that of Pinot Noir and nearly six times more than Sauvignon Blanc. The glut has led to a situation where even prestigious Napa Valley Cabernets are now available at significant markdowns in discount stores and online retailers.

The impact of this oversupply is visible across the industry. In Napa Valley, billionaire Gaylon Lawrence Jr.'s acquisition of historic wineries such as Heitz Cellar, Stony Hill, and Burgess was followed by renovations and price hikes. However, these moves have not translated into sustained demand for high-priced bottles. The company has since closed one tasting room, reduced its planned production of high-end wines, and consolidated winemaking operations. Some of its once-premium offerings have even appeared on the shelves of discount chains like Grocery Outlet.

Despite these challenges, there remains a niche market for expensive wines. Stratton explains that while there are still buyers willing to pay $250 or more for a bottle, the number of wineries targeting this segment has grown dramatically—from about 25 to 150 in recent years—diluting demand for each producer.

Retailers are also noticing changes in consumer behavior. Frank Pagliaro, owner of FranksWine in Wilmington, Delaware, reports continued sales of $50-plus bottles but observes that the customer base is neither expanding nor getting younger. He notes that some customers attribute their reduced alcohol consumption to appetite-suppressing medications like Ozempic. Additionally, Gen Z consumers drink less wine than previous generations and show growing interest in alternatives such as cannabis-infused beverages.

Pagliaro says he still sees strong demand for high-end Burgundy and Sancerre as well as Napa Cabernet and Chardonnay over $50 per bottle. To attract younger buyers, he is experimenting with offerings like orange wine and pét-nat.

Stratton adds that while Bordeaux collectors remain loyal to their preferred region—though lackluster reviews for the 2024 vintage may dampen enthusiasm—most Cabernet drinkers are open to exploring options from California, Washington state, Australia, Chile, and Argentina. All these regions currently face oversupply issues and are eager to move inventory.

Looking ahead, potential tariffs on imported goods could affect pricing and availability later in the year. However, many importers have already increased shipments in anticipation of these changes, ensuring ample supply in the near term.

For now, consumers benefit from a buyer’s market with abundant deals on quality wines across all price points. The current environment offers opportunities for both seasoned collectors and casual drinkers to explore new labels without breaking the bank.