ProWein says U.S. wine stock has reached 18 months of supply

ProWein released a guide in mid-August that describes a U.S. wine market with less drinking, higher average bottle prices, heavy inventories and strong pressure from distributors and retailers on final shelf prices. The document, “The U.S. Wine Market: A ProWein Guide,” is dated July 2026 and was prepared by Robert Joseph with ProWein Düsseldorf and the agency Wineworlds Weinmarketing. It says the United States remains the world’s largest wine market by value and the fourth largest by volume, but that size now coexists with falling consumption and a growing dependence on more expensive bottles to sustain revenue.

The report, which cites sources including IWSR, the Alcohol and Tobacco Tax and Trade Bureau, the Wine Institute, Statista and the U.S. Census Bureau, says only about one-third of Americans drink wine at all. Per-capita consumption fell to 9.6 liters in 2024 from 11.35 liters in the middle of the last decade, while sales volume has been declining by about 2% a year. At the same time, the average bottle price rose to $12.50 in 2024 from $9.80 in 2019, an increase of 27%.

ProWein links that change to a shift away from supermarket bottles in the $8 to $10 range and toward what it calls “premium everyday” wines priced at $15 to $25. The guide lists Sonoma and Oregon Pinot Noir, Chianti Classico and Rioja Reserva as examples of wines benefiting from that move. That change, the report says, helps explain why the market is selling fewer bottles while still generating higher revenue in some segments.

The guide says the most immediate problem is oversupply. It estimates that by mid-2025 the market held roughly 4.6 billion bottles in stock, equal to about 18 months of supply, including around 1 billion bottles above what could be sold profitably. It also says a 90% collapse in Canada in 2025 could send another 190 million to 200 million bottles of U.S. wine back into the domestic market. Since 2023, the report adds, California has removed about 38,000 hectares of vineyard, close to 20% of its surface, without a subsidy program similar to those available in the European Union.

According to the guide, that excess wine is already showing up in discounting. It cites cases in which Napa Cabernet that would normally sell for around $100 was offered for $20 at Trader Joe’s. It also says distributors are cutting staff and taking on fewer new labels, which raises the difficulty for producers trying to enter or expand in the market.

The report breaks the market into a still wine segment worth 81.7% of total sales, including 44% for reds and 38% for whites, a sparkling segment worth 14% and a fortified segment worth 4.3%. Rosé is not listed as a separate block, but the study estimates annual growth of 8% to 10% for that category. About one-third of all wine consumed in the United States is imported.

By value, Italy leads U.S. wine imports with 32%, followed by France with 26% and Spain with 13%, according to the guide. Together, those three countries account for more than 70% of import value, placing Spain in third position. That ranking matters because the report argues that recognized European wines can benefit from a market where consumers are paying more in selected price bands even as overall volume falls.

The guide was written mainly to assess opportunities for German wines, but several of its findings point to space for other European suppliers as well. It says Germany accounts for only 2% to 3% of U.S. wine imports by value and between 0.7% and 1% of the total market. It estimates annual shipments of 36 million to 48 million bottles, mostly Riesling, sold at retail prices of $18 to $25, above the national average bottle price of $12.50. The report says the main obstacle for Germany is the persistent association of Riesling with sweet wine and recommends leading with dry styles.

A large part of the guide is devoted to the U.S. three-tier system, which it identifies as one of the main reasons imported wine becomes much more expensive by the time it reaches consumers. Under that structure, a producer or importer sells to a licensed distributor, which then sells to a retailer or restaurant. The guide says the system operates separately across 50 states, each with its own taxes, licenses and rules. It estimates normal distributor markups at 25% to 35% and says off-premise retail, including supermarkets, specialty stores and online sellers, accounts for 70% to 75% of sales, compared with 25% to 30% for restaurants, bars and hotels.

The report says the top three distributors, Southern Glazer’s, RNDC and Breakthru, control more than 60% of the U.S. wine market. Its pricing example shows a wine leaving a German cellar at €10 and reaching the U.S. shelf at about $39 after freight, import costs, distribution and retail markups. ProWein estimates that the chain adds 110% to 150% from landed cost to final shelf price, while taxes account for only about 8% of the retail price.

At the federal level, the guide says the excise tax on still wine up to 14% alcohol is about $0.20 a bottle, rising to $0.64 for sparkling wine. It says the standard import duty for still wine was about $0.05 a bottle when the report was prepared, while warning that tariff policy could change quickly under the U.S. administration. State-level differences add more complexity. The guide says excise taxes are relatively high in Kentucky, Alaska and Florida and much lower in California, Texas and Louisiana. Sales taxes range from 0% in states such as Oregon, New Hampshire and Montana to more than 10% elsewhere, with an average between 6% and 8%.

The document also points to direct-to-consumer shipping and e-commerce as important channels, although both require state permits and compliance. It says 47 states and the District of Columbia allow direct shipping, with license costs ranging from $50 to $500 and, in some cases, volume caps. U.S. wineries sell about 66 million bottles a year through direct shipping at an average price of $56 to $57 a bottle. That channel now accounts for about 7% of off-premise sales value, down from 12% in 2021. E-commerce, meanwhile, rose from 10% of wine sales in 2019 to 20% in 2021 and 27.5% in 2024. Wine.com, the report says, holds about 45% of online wine sales, with more than 17,000 stock keeping units and more than 200 German wines.

Consumer age and income remain central to demand. The guide says 38% of U.S. wine drinkers are 55 or older, 33% are between 35 and 54, and 28% are between 21 and 34. It argues that older consumers still drive much of the volume and premium purchasing, while younger adults drink less and pay closer attention to alcohol level, occasion and format. Households with incomes above $100,000 are described as the main frequent buyers and the core market for higher-priced bottles.

Geography also shapes strategy. The guide says California represents about 20% of the U.S. market and remains important for sommeliers, restaurants and specialty retail, despite its large local production. New York is the second-largest market and differs from most states because supermarkets cannot sell wine. Florida ranks third and is described as more price sensitive. Texas, the report says, is growing at roughly 5% a year, with Austin standing out for restaurant demand. Illinois, especially Chicago, and Massachusetts are also identified as relevant markets for imported premium wines.

The price structure described in the report helps explain why revenue is holding up better than volume. Bottles priced below $11 represent 52% of volume but only 25% of value. Wines in the $11 to $20 range account for 28% of volume and 30% of value, while those priced at $20 to $40 account for 13% of volume and 25% of value. Bottles sold for $40 to $80 represent 5% of volume and 12% of value, and those above $80 account for 2% of volume and 8% of value.

ProWein also identifies organic, biodynamic and lower-alcohol wines as growth areas. It values the U.S. organic and biodynamic market at about $1.21 billion and says it is expanding by 10% to 12% a year, with consumers willing to pay 15% to 25% more for those wines. It also points to lower-alcohol styles as a possible advantage for European producers, especially in categories where younger drinkers are reducing intake.

For foreign wineries seeking a foothold, the report recommends starting with an importer that already has direct-to-consumer capabilities, concentrating first on New York, California and Illinois, and later expanding to Texas, Florida, Massachusetts, Washington and Pennsylvania. It says the country’s more than 6,000 certified sommeliers remain key gatekeepers for wine lists and advises producers to rely on tastings, training and pairing dinners before considering a standalone U.S. direct-sales structure, a step it says generally makes sense only after annual sales rise above about 60,000 bottles.