U.S. Wine Sales Edge Up as Industry Grapples With Shifting Consumer Habits

The U.S. wine industry is facing a period of uncertainty as it enters 2026, with many hoping the sector’s recent struggles are nearing an end. However, shifting consumer habits and economic pressures suggest that stability may remain elusive. Jon Moramarco, editor of the Gomberg Fredrickson Report and managing partner at market research firm bw166, addressed these challenges during a January 22 webinar. He noted that while some believe the industry is close to “hitting bottom,” the reality is more complex. The baseline for wine sales is likely to fluctuate in the coming years as wine competes with beer and spirits for a share of a stagnant market.

The industry’s efforts to rebalance supply and demand are beginning to show results. Moramarco explained that, despite incomplete data due to a 43-day federal government shutdown, rolling averages indicate that the 2025 grape crush and inventory levels are moving toward equilibrium. As of December, total U.S. wine market volume reached 366 million cases over the past year, a slight increase of 0.1% from the previous year. This growth was driven by domestic sparkling wines, which rose 33%, and flavored wines, up 24%. Still wines made up 205 million cases, or 56% of all sales—a decline from 64% in 2018 as consumer preferences have shifted.

Other beverage categories are also experiencing declines. Beer and spirits volumes dropped more than 6%, with beer at 1.9 billion cases and spirits at 31 million cases. Despite these volume decreases, off-premise spending on alcoholic beverages increased by 3.5% compared to last year, according to federal data.

Inventory levels are also improving. Moramarco reported that average year-end inventory for 2025 stands at about 18 months, down from 21.7 months in 2023. This figure varies by region and varietal but is close to the long-term average of 18.3 months. The estimated 2025 harvest is expected to be between 2.1 and 2.2 million tons. If market demand remains flat, California producers would need to harvest around 3.1 million tons annually to maintain balanced inventories in the future—a significant reduction from six to eight years ago.

However, several factors could disrupt this fragile balance. One concern is changing attitudes toward alcohol and health, but affordability is an even greater issue, especially among younger consumers. In 2025, the median U.S. household income reached $86,970—an increase of 178% since 1993—but this growth has not kept pace with rising living costs. Average home prices have climbed by 254%, along with corresponding increases in mortgage payments.

Wealth distribution has also shifted dramatically. Individuals over age 55 now hold 73% of all wealth in America, while Millennials and Gen Z together control just 10.7%. Although younger generations earn more than their parents did at the same age, they face higher expenses and greater financial insecurity: nearly half report feeling financially unstable, and more than half live paycheck to paycheck.

These economic pressures are affecting consumer behavior in ways that challenge traditional wine marketing strategies. Many younger Americans are delaying or forgoing milestones like homeownership or starting families due to financial constraints. While retailers such as Costco, Trader Joe’s, and Aldi have responded by offering lower-priced private label wines, these products often fall outside standard industry tracking systems.

Even as Millennials are projected to inherit $84 trillion from Baby Boomers over time, Moramarco cautioned that this wealth transfer will benefit only a small segment of already affluent individuals and will not address broader affordability issues facing most young consumers.

Moramarco concluded that while consumer incomes and spending have increased overall, much of this growth has favored older Americans whose habits shaped today’s retail environment—leaving younger consumers struggling to keep up. This generational divide could continue to weigh on both the wine industry and the wider economy as companies adapt to evolving market realities.