U.S. wine market volume fell 7% to 340 million cases, industry outlook says

The U.S. wine market kept shrinking in volume even as sales rose in dollar terms, adding to pressure on wineries and grape growers heading into 2027, according to a Farm Credit East industry outlook published Tuesday, November 3.

The report said total U.S. wine market value reached $115 billion in the 12 months through September, up 2% from a year earlier, while total volume fell 7% to 340 million 9-liter cases. It said the gap reflected higher prices rather than stronger demand and pointed to a broad pullback in wine consumption that is affecting both growers and producers across the country.

That matters beyond wineries alone. A sustained drop in wine demand can influence sales plans, pricing decisions and distribution strategies across the beverage business, especially for producers and exporters trying to position products in a weaker U.S. market.

Farm Credit East said 2027 is likely to be at least as difficult as the past year because of softer consumption and higher operating costs. The report, written by Andrew Adams of WineBusiness Monthly, said the market is not expected to return to pre-pandemic conditions and described the downturn as a structural change rather than a short-term dip.

The report said no U.S. wine region is fully insulated. It cited the 2026 California winegrape harvest as likely to be the smallest in decades, linking that outcome directly to lower wine consumption. It also pointed to new pressure from the near-collapse of the export market in Canada because of a trade dispute, a setback that it said has also hurt tourism. The North Country Chamber of Commerce reported that car crossings from the Montreal area at Champlain, New York, were running about 30% below 2024 levels for much of 2025.

The report argued that any future recovery depends first on market stability. It said supply and demand could move closer to balance by 2028 if demand steadies, leaving a smaller but more sustainable market. Until then, lower-priced wines remain a weak point.

According to NIQ data cited in the report, wines sold in 750-milliliter bottles priced between $8 and $11 fell 9% by value and 8% by volume in the 52 weeks ended September 5. Wines priced between $20 and $25 declined by less than 1% in both value and volume, but that tier represented less than 3% of the sales volume tracked by NIQ. Off-premise table wine volume fell across all price levels, with the sharpest drops at the low end.

The report said restaurants and other on-premise venues have held up better than retail stores. Farm Credit East cited bw166 data showing that on-premise sales of domestic table wine rose nearly 9% in value to more than $27 billion. NIQ, using a different measure, reported on-premise wine sales down 2.6% to $13.5 billion in the year ended August 8, compared with a 5% decline for off-premise table wine. Even with those differences in measurement, both datasets suggest on-premise demand is performing better than retail.

The outlook devoted particular attention to the Northeast, where producers face weaker sales but also some signs of resilience. It said the quality reputation of Northeastern wine has improved, especially in aromatic white wines, lighter-bodied reds such as Cabernet Franc, and sparkling wines, which it identified as among the few growth areas in the market.

Farm Credit East said more than a third of wineries in the region make Riesling and Cabernet Franc. It also cited bw166 data showing that direct-to-consumer shipments of Riesling from wineries east of the Rockies rose 6% by volume and 12% by value in 2025.

At the same time, many Northeastern wineries have moved up in price. In 2026, 26% of wineries in the region with listed prices had an average bottle price of $25 or more, up from 14% in 2020, according to the bw166 winery database. The share with average bottle prices below $15 fell to 10% from 16%. The number of wineries averaging $40 or more per bottle rose to 18 from 12 over the same period.

But the number of wineries is falling. The eight Northeast states had 757 wineries in 2026, down 4% from 2025, the report said. New York lost 20 wineries, while only Connecticut and New Jersey posted gains. Farm Credit East said all seven leading winery states east of the Rockies lost wineries in 2026, although each still remains above its 2016 total. Massachusetts has lost 15 wineries since 2020.

Weather added another layer of strain. The report said a warm spring pushed vines ahead of schedule before a freeze on April 20 and 21 caused damage in parts of the East. The U.S. Department of Agriculture issued emergency crop-insurance procedures for 13 states, including four in the Northeast. In a survey by the Garden State Wine Growers Association, the median New Jersey grower estimated vineyard damage at 75%. Some growers in the Finger Lakes expected yield losses of 15% to 30%, while Long Island reported average yields.

Direct-to-consumer shipping also weakened. Farm Credit East cited WineBusiness Analytics and Sovos ShipCompliant data showing total U.S. shipments through June were down 15% by volume and 4% by value from the start of the year. Wineries east of the Rockies did worse, with shipment value down 11% to $81.3 million and volume down 17% to 254,795 cases. Their average bottle price rose 6% to $26.58, still less than half the national average.

The report said shipment figures do not capture the full business model of many Eastern wineries because most of their wine is sold to visitors who take bottles home rather than having them shipped. In the 2026 WineBusiness Tasting Room Survey, wineries east of the Rockies said about 94% of tasting-room sales by value were carried out, not shipped, and club members picked up a median 90% of their wine. The median winery in the region reported flat tasting-room traffic in 2025 at about 10,500 visits, while average club membership grew 5%.

Even so, Farm Credit East said there is room to improve sales conversion. Eastern wineries charge a median of $16 for a basic tasting, compared with $25 for all survey respondents, and their median tasting-room purchase is $60, versus $90 overall. Clubs account for about one-fifth of Eastern direct-to-consumer sales, about half the broader industry share, and the median winery adds only 5% of visitors to its mailing list, compared with 20% overall.

Survey respondents said their biggest obstacles in 2026 were the economy, cited by 69%, weak interest from younger drinkers, cited by 44%, and a lack of tourism, cited by 42%. About two-thirds said social media and digital marketing were their most effective ways to reach new and younger consumers.

The report said the decline in wine consumption does not come from a single cause. It pointed to broad changes in how consumers spend their time and money, as well as specific factors such as the popularity of GLP-1 drugs that can reduce the desire to drink. It also said the industry was slow to adjust because many producers assumed younger consumers would eventually replace aging Baby Boomer drinkers at a similar pace.

Farm Credit East said the near-term market is likely to be smaller and supported by fewer wineries. For producers, that means more pressure to defend market share, raise productivity and justify higher prices. For the broader beverage sector, it may also mean a more competitive fight for consumer spending as wine loses volume and companies rethink where growth can still be found.