Jackson Family Wines Closes Carneros Hills Winery and Lays Off 13 Workers in Sonoma

The California wine industry is facing a difficult start to 2026, following a turbulent year in 2025. In less than two months, four of the largest wine producers in California and the United States have announced layoffs and closures. In January, Constellation Brands cut more than 200 jobs at its Mission Bell Winery in Madera. Boisset Collection closed two tasting rooms in Napa Valley. At the beginning of February, Foley Family Wine & Spirits shut down its historic Chalone production facility on the Central Coast. Gallo, the largest wine company in the U.S., is set to lay off 93 employees across several facilities due to closures and restructuring.

The latest development involves Jackson Family Wines, the sixth-largest wine company in the country. On February 12, Jackson Family Wines permanently closed its Carneros Hills Winery in Sonoma’s Carneros region, resulting in 13 layoffs. The company is best known for its Kendall-Jackson Chardonnay, one of the top-selling Chardonnays in the U.S. According to Wine Business, Jackson Family Wines produces about 6 million cases annually and owns 40 brands across both hemispheres, with more than 25 wineries located in California.

Sean Carroll, communications director for Jackson Family Wines, told the San Francisco Chronicle that Carneros Hills served as excess production capacity and was not tied to any specific brand. He explained that the facility had become underutilized and that operations were consolidated as a result. This mirrors statements from Gallo regarding their own recent closures and layoffs, which have been attributed to market dynamics, changing demand, and inventory levels.

These events are not isolated. Trinchero Family Wine & Spirits, the third-largest wine company in America, recently put two of its main vineyards up for sale. Treasury Wine Estates, ranked seventh among U.S. wine companies, suspended dividend payments after a significant reduction in its U.S. operations and a 17% drop in revenue over six months.

Industry reports commissioned by the California Association of Winegrape Growers show that between October 2024 and August 2025, more than 15,378 hectares of vineyards were removed across California—about 7% of the state’s total vineyard area. This leaves approximately 193,035 hectares still in production. The main reason cited is overproduction relative to current demand. Some experts believe that only about 166,000 hectares will be sustainable for future production, suggesting further reductions are likely.

Stuart Spencer, executive director of the Lodi Wine Grape Commission, described the situation as unprecedented for California grape growers. In an interview with The Drinks Business, he said these are the worst market conditions growers have ever experienced. Some veteran growers in their eighties told him they have never seen such a severe downturn before.

The challenges facing California’s wine industry reflect broader shifts in consumer preferences and global market pressures. Even major producers are not immune to these changes as they adjust operations to align with new realities in supply and demand. The ongoing consolidation and reduction of vineyard acreage signal a period of significant transition for one of America’s most iconic agricultural sectors.