Imported wine captured a near-record 34.5% of the U.S. market in 2025

Imported wine accounted for 34.5% of the U.S. wine market by volume in 2025, close to a record high, even as overall wine sales continued to fall in the first half of 2026, according to the fall 2026 edition of Winescape, a market report from American AgCredit that includes analysis by Terrain.

The report said the U.S. wine market showed a slower rate of decline in January through June, but not a clear recovery. Retail sales measured by NIQ fell 3% in dollar value and 4% in volume from the same period in 2025. That was better than the second half of 2025, when sales dropped 5% in value and 6% in volume, but Terrain said the improvement came mainly from a stronger first quarter and that the slowdown worsened again in the second quarter.

Distributor depletion data tracked by SipSource showed a similar pattern. Those sales fell 4% in value and 8% in volume in the first half of 2026 from a year earlier, compared with declines of 6% and 9% in the second half of 2025.

Chris Bitter, Terrain’s senior wine and grape analyst and the author of the report, said the market remained sharply divided by price. Brands priced below $15 kept losing ground, while wines priced at $15 and above posted slight gains in both value and volume in the first half of 2026. He said the luxury segment appeared to be stabilizing, although discounting seemed to be helping support case sales.

The report also found that white wines continued to perform better than reds, helped in part by Sauvignon Blanc, and that sparkling wine declined only slightly. Wine-based cocktails kept growing, but at a slower pace than before.

Direct-to-consumer sales from wineries were roughly flat in the first half of 2026, based on data from Community Benchmark and Enolytics, even as tasting room visits fell about 5% and wine club membership declined. Higher revenue per visitor partly offset the lower traffic. Another data set, from Sovos and Wine Business Analytics, showed a 15% decline in direct-to-consumer shipment volume, although Bitter said that measure likely overstated the weakness because it counted only shipped orders rather than all direct sales activity.

Exports remained weak as well. U.S. wine exports fell 14% in value and 13% in volume in the first half of 2026 from a year earlier. The report said second-quarter export comparisons were flattered by the severe drop in shipments to Canada in the spring of 2025, when Alberta and Saskatchewan had banned sales of American alcohol. Exports to Canada recovered somewhat after those restrictions were lifted, but remained about 80% below their level from two years earlier. Excluding Canada, U.S. wine exports still fell 8% in value and 9% in volume in the first half of 2026.

Terrain said it did not expect much improvement in wine sales in the second half of 2026. Its outlook for 2027 called for only a modest rebound if inflation eases and consumers regain room for discretionary spending. The report also warned that a decline in stock prices could hit higher-priced wine harder because those sales depend more on affluent buyers.

The import side of the market has become more important partly because domestic sales have kept shrinking. The United States imported the equivalent of 115 million 9-liter cases of wine in 2025, valued at nearly $6.2 billion, the report said. U.S. wineries exported fewer than 22 million cases, worth about $800 million. Imported wine’s share of U.S. consumption rose from 21% in 2000 to 29% in 2020 and then to 34.5% in 2025.

Terrain said that rise was not driven mainly by bulk wine, even though bulk imports have become a flash point inside the industry. Packaged imports represented about 29% of the U.S. market in 2025, while bulk imports represented about 6%. According to the report, all of the gain in import market share since 2020 came from packaged wine rather than bulk shipments.

Europe has been central to that shift. Over the 2021-2025 period, European wines accounted for about 80% of U.S. import value and nearly 65% of import volume. France and Italy alone made up more than 70% of value and more than half of volume. Terrain estimated that European wines now account for 22% of all wine consumed in the United States by volume.

The report said imports were especially strong in the categories where U.S. consumer demand has been more resilient. Foreign wines held 75% of the distributor market by value and 61% by volume in sparkling wine in 2025, according to SipSource data cited in the study. Imported wines also held 59% of value and 57% of volume in Sauvignon Blanc, and 46% of value and 36% of volume in Pinot Grigio and Pinot Gris. Their presence was far smaller in red wines overall, at 20% of value and 22% of volume.

Import penetration was also stronger in restaurants and bars than in retail outlets. Wines with a foreign appellation accounted for 44% of distributor sales value and 39% of volume in the on-premise channel, compared with 34% of value and 29% of volume in off-premise sales. The report noted that those figures do not fully capture all foreign wine in the market because U.S. labeling rules can allow some imported wine to be blended into bottles sold with an American appellation.

Terrain said the competitive pressure was no longer limited to the cheapest wines. Imported still wines represented 32% of volume in the $9 to $15.99 price tier and 26% in the $16 to $29.99 tier. Their share dropped to 17% for still wines priced at $30 and above. In sparkling wine, however, imports dominated the premium end, capturing nearly all sales in the $40-and-up tier.

Bitter said the core problem was cost competitiveness. The report argued that wine production costs in California have nearly doubled over the past decade, while the cost of importing bulk wine from Chile, Australia and New Zealand has changed little since 2017. As an example, the analysis estimated that imported Australian bulk Chardonnay could be delivered into a U.S. winery’s tanks for about $8.75 per 9-liter case equivalent, including freight and duties. Under the report’s assumptions, a California winery would have only $4.35 per case left to pay for grapes after processing costs if it wanted to match that price, or about $295 per ton. Bitter said that figure would not cover the cost of growing the grapes.

The report said that gap makes it difficult for U.S. producers to regain share in entry-level wines and that better opportunities are likely to be in popular-premium and premium segments, where domestic wineries can compete more on quality than price. Bitter suggested that growers and wineries focus on improving grape quality, lowering production costs where possible, and building stronger brands in categories such as fresh white wines and sparkling wines, where imports are strongest.

At the same time, the report said the U.S. grape market could get some relief from a short 2026 California harvest. Terrain described the crop as unusually early and potentially one of the smallest of the century after a spring heat wave accelerated vine development and caused fruit-set problems. Harvest in some regions was running two to five weeks ahead of normal, and yields in some areas were down by as much as 50%, though not across the state as a whole.

Even with the smaller crop, a large volume of fruit remained available without contracts because wineries were still carrying significant inventories of bulk wine and bottled wine from earlier vintages. Bitter said a third consecutive short harvest, together with vineyard removals and temporary pullbacks in production, could help work down those inventories and bring the grape market closer to balance in 2027.

Terrain said the chance to replace some imported wine with domestic production remains significant. Holding the total market size at its 2025 level, the report estimated that a 5-percentage-point gain in domestic market share would have meant 16.6 million more cases of U.S. wine sales. But it also said the substitution would not be automatic because consumers value different origins, imported wine is important to some American wineries, and foreign bulk wine can help smooth swings in domestic supply.