California Grape Crush Plunges to 25-Year Low as Wine Glut Leaves 1.2 Million Tons Without Buyers

The U.S. wine and grape industry is facing a period of significant challenge, marked by declining sales, an oversupply of wine, and mounting financial pressure on grape growers. The downturn, which has persisted through 2025, is driven by long-term structural changes in consumer behavior and is made worse by economic factors such as inflation and low consumer confidence.

In California, the 2025 grape harvest became a crisis for many growers. Weak demand from wineries, who are struggling with their own excess inventories, led to unprofitable prices for grapes. Many growers were unable to find buyers for their fruit, resulting in hundreds of thousands of tons left unharvested. Industry experts estimate that the 2025 California grape crush will be less than 2.5 million tons, the smallest since the start of the century. This is a sharp drop from 2.9 million tons in 2024 and far below the mid-2010s average of 4 million tons.

This historically small harvest is seen as a necessary step to address the industry’s most urgent problem: a massive glut of unsold wine. By mid-2025, winery inventories were nearly 30% above what is considered ideal, amounting to about 84 million excess cases—enough to fill over 10,000 standard swimming pools. For grape growers, this surplus equates to roughly 1.2 million tons of grapes that have no immediate market.

To correct this imbalance, California growers have removed nearly 40,000 acres of vineyards between October 2024 and August 2025—a reduction of about 7.5% in total acreage. More removals are expected as growers without contracts or with unprofitable operations exit the market.

Sales data from the third quarter of 2025 show continued declines across all channels and price segments. Off-premise retail sales fell by 5% in both value and volume compared to the previous year. Depletions—sales from distributors to retailers—dropped even more sharply, down 7% in revenue and 10% in volume year-over-year. The market remains divided at the $15 price point: wines under $15 saw sales fall by 6%, while those priced at $15 or more performed better, with only a 1% decline in volume.

Direct-to-consumer (DtC) sales also weakened. Some data sources report a drop of over 20% in shipment volume year-over-year for the third quarter, while others suggest a smaller decline when including carry-out sales. Visitor numbers at West Coast wineries continued to fall throughout 2025.

Exports have been hit hard as well, especially due to Canadian provincial bans on American alcohol imports. Shipments abroad dropped by one-third in value and over 10% in volume during July and August compared to last year. Exports to Canada fell by an extraordinary 94%.

Economic conditions have added further strain. The University of Michigan’s Index of Consumer Sentiment dropped to near-record lows in November 2025, reflecting ongoing concerns about inflation and economic uncertainty following a recent government shutdown. Consumer prices rose by 3% year-over-year in the third quarter, while unemployment reached its highest level in four years at 4.4%. Although wage gains have outpaced inflation for some workers, consumers remain cautious about discretionary spending—including wine.

Looking ahead to 2026, industry analysts expect some improvement for grape growers as reduced inventories should lead wineries to increase grape purchases compared to this year’s historic low crush. However, wine sales are not expected to rebound quickly due to persistent structural issues such as changing consumer preferences and competition from other beverages.

The base-case scenario projects that if the crush remains around 2.4 million tons and wine sales continue to decline by about 3%, inventories will still be above ideal levels but much closer to balance than before. In more optimistic scenarios with smaller harvests or stable sales, wineries could even face shortages by mid-2026. Conversely, if harvests are larger or sales fall further than expected, oversupply could persist.

For wineries with reliable sales forecasts, experts advise securing grape contracts sooner rather than later as available supply may tighten before the next harvest. Growers with high-quality fruit are encouraged to continue operations if possible until there is more clarity in the market; those with less productive vineyards may need to consider alternative crops or land uses.

The consensus among industry observers is that the bottom may have been reached in 2025 for grape growers under most scenarios except the most pessimistic ones. However, all stakeholders are urged to remain flexible and closely monitor market developments as conditions evolve into next year.